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Lloyds’ Dijkstra: ‘Brokers must consider how online could affect their entire business model’

  • 15/05/2018
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Lloyds’ Dijkstra: ‘Brokers must consider how online could affect their entire business model’
The digital revolution is coming to the homebuying process and mortgage advisers need to be prepared, according to Esther Dijkstra, director of strategic partnerships at Lloyds Banking Group.


Consumers will increasingly look to transact online when buying a home, and brokers need to consider how the change could affect their business models, Dijkstra said.

She told Mortgage Solutions: “The question is more when, and not if.”

And added: “A big question for brokers to reflect on is ‘where customer leads are coming from now, and could that change with things going more and more online’.”

Dijkstra acknowledged that “not much has happened yet” in terms of Open Banking but added that the mortgage industry should be paying close attention to see how customers react and engage.

In this digital age, advisers will need to consider their contact programmes with clients, especially in light of the types of business being written in the market.

Dijkstra said: “We have shifted in the last 18 months to retention – remortgages and product transfers are together a large part of the market.”

This means a contact strategy with customers is all the more important and advisers should look to telephony and proactive different ways to keep in touch, she added.


Developing open APIs

Halifax, part of Lloyds Bank, recently went live with an application programming interface (API) connection that pre-populates applications with the lender when select advisers use platform Smartr365.

The process has been a “learning curve” and taken a lot of effort to become operational, Dijkstra said.

At the same time, Dijkstra explained that Lloyds has learned from Open Banking and is now aiming to dovetail the two initiatives into a secure process, which advisers can use for a more seamless mortgage application.

There is no set timeframe for when Lloyds APIs will be widely available, but it will be up to advisers on how they adapt and use the technology, according to Dijkstra.

She said: “As a lender, we’re not going to say you have to deal with us in a certain way, because we don’t mind… It’s a broker call, how they want to use it, it’s their decision.”

Dijkstra added: “A lot of people think pre-population APIs have to be connected to a sourcing system, and that’s not the case…

“I think where we will end up as an industry is that different brokers will have different solutions.

“Some brokers will do it through sourcing systems, some will do it directly into their systems.”


The security risk


Fraud is a significant worry, and the security of users will need to be watertight before both open APIs and Open Banking within the mortgage process can be widely adopted, Dijkstra said.

She added: “What happens when it goes wrong? We need to think that through beforehand, particularly when you think of the mortgage space because those are big amounts.”

Nonetheless, the journey into Open Banking and open APIs has started at Lloyds and the possibilities for mortgages are not confined to pre-populating applications.

Dijkstra said: “We’re looking at more APIs, there are other ones –when you have the completion, the redemption, these could also go through API.”

She added: “This will be forever evolving…. It’s still relatively early days in terms of our first step.”

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