You are here: Home - News -

Finance firms say tech innovation hamstrung by regulatory costs

by:
  • 27/06/2017
  • 0
Finance firms say tech innovation hamstrung by regulatory costs
Research suggests UK firms continue to be hamstrung by the battery of regulatory changes as compliance is drawing resource and budgets away from the technology innovation the industry needs.

A report from the Council of Mortgage Lenders, which is one of six trade bodies to merge into UK Finance at the end of this week, suggests the pace of technology or regulatory change is also outpacing mortgage lenders’ ability to deliver it, which is cited as another roadblock to wholesale change for some.

‘Innovation is therefore easiest within a stable regulatory environment,’ concluded the report, Digital Change and Mortgage Borrowers.

Digital change is radically altering consumer expectations in the mortgage market and “raising the bar for what borrowers expect from their home buying and owning experience,” according to the research.

The FCA has set up Project Innovate and a sandbox, both of which are central to the development of innovation policy and RegTech and the Bank of England also has a FinTech Accelerator programme that works with firms to understand how new technologies can be applied to central banking.

The report had several recommendations to offer the industry:

Tailor digital change to achieve individual business strategies

View digital as an enabler, not an end in itself. Base business strategies on customer segments and the interpretation of regulations.

Consider the application of digital changes beyond the mortgage transaction itself.

Ensure the customer is central to your thinking

Continue to improve customer experiences and offer customers a mix of digital and human interactions. Keep abreast of changes beyond the mortgage industry and understand how they may impact customer expectations within it.

Overcome legacy challenges to change your technology at pace, and adapt your organisation quickly

Recognise how legacy technologies, thinking and cultures may be holding your organisation back. Become an agile business to deliver future changes at pace.

Use digital to improve operational efficiency

Continue to improve operations. Use new technologies to free colleagues to add greater value to the customer or to the business.

Keep regulator and risk appetites in mind.

Collaborate to keep pace

Understand what your company is good at and seek opportunities to work with third parties who can complement or enhance your existing capabilities or add new ones. Form a working group to bring together
trade associations, regulators and governing bodies to discuss and overcome industry challenges.

CML director general Paul Smee said: “This report highlights the enormous potential of technology in the mortgage market – a huge, process-driven industry with more than 11 million customers. It is already enhancing what lenders are able to offer their customers, as well as improving the efficiency of work behind the scenes. The pace of change will not slow, and firms will need to ensure that their plans for developing technology are underpinned by the clearest possible understanding of all the implications of digital change.”

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
  • RT @robjupp: Great day yesterday for donations to @MortSleepOut. With Gift Aid, we are now close to £17,000. It would be great to get to £2…

Read previous post:
Political uncertainty hits housing demand – NAEA

Only 3% of properties sold for more than the asking price in May, according to the latest figures from the...

Close