In a report entitled Great Expectations: The Demanding Market for Credit, Equiniti Credit Services highlighted the importance of lenders linking into the increasingly digital lifestyles of borrowers.
The report stated: “Both millennials and generation-x are characterised by their digital fluency. Success with these groups, therefore, will also be demonstrated by lenders that prioritise a fully digitised service experience in their product and service design.
“Digital financial integration, mobile device support and instant query and response are all important factors to consider, and could make the difference between attracting and deterring customers in these groups,” it added.
According to the report new technologies like e-signatures and biometric authentication, will push digital engagement to the next level and make life faster, cheaper and more convenient for lenders and customers alike.
E-signatures are go
This view was supported by the Building Societies Association (BSA), which noted that the use of e-signatures was becoming more common place in the UK, with the government’s GOV.UK Verify e-signature service being particularly valuable.
BSA mortgage policy adviser Rob Thickett, explained that this worked by asking questions and comparing the answers against records held by mobile phone providers, HM Passport Office, The Driver and Vehicle Licensing Agency, or credit agencies.
“Different parts of the financial services industry are now looking into how this can be safely and securely incorporated into their processes in a way that meets our anti-money laundering obligations under the Proceeds of Crime Act 2002,” he said.
“On paper, the benefits of not using pen and paper as a way of signing documentation seem clear. It cuts down on the chances of a letter getting lost in the post and needing signatures to be witnessed. However, buying a home is not as simple as taking out a consumer credit loan or credit card.
“Multiple parties in a housing transaction, from the estate agent and mortgage intermediary to the lender, conveyancer and Land Registry are trying to verify the identity of the customer. To really benefit customers, any adoption of e-signatures will require coordination across the industry,” he added.
But Thickett was generally positive about the direction of travel. “There are signs of progress though,” he continued.
“A good example of this is HM Land Registry’s digital mortgage deed, which has been piloted with Coventry Building Society. When launched buyers will be able to use its Sign the Mortgage Deed service rather than having to sign a document using pen and paper.”
The research also highlighted changing attitudes among borrowers and the growing willingness to work with unknown brands.
Almost half (47%) of those questioned said they would be prepared to borrow from an unfamiliar lender. Equiniti Credit Services said that in the last five years only 26% had borrowed more than £1,000 from an alternative lender.
It believed, therefore, that attitudes to unfamiliar lenders were evolving, but had yet to manifest themselves as changes in borrowing behaviour.
The report commented: “We see this as a further warning for established lenders to ensure their propositions are ready for the challenge laid in front of them by newer lenders deploying technology and processes that are both agile and capable.”
Richard Carter, managing director of Equiniti Credit Services said: “Lenders that have the foresight to invest in moulding their products for different customer segments while using agile technology to enhance their operational efficiency stand to prosper the most.”
Equiniti Credit Services questioned 2,001 people for the report of which 52% were women and 48% were men. The age demographics analysed included 32% millennials, 34% generation-x and 34% baby boomers.