Speaking at a Dock9 event in London last night he said this does not infer more lending via individual brokers but instead higher mortgage business volume through a new look intermediary channel.
“The new wave of digital brokers are likely to help increase the overall intermediary share of the market, picking up much of the vanilla world that would have previously gone direct,” he said.
“Large comparison sites – which have not really ventured into our world to date – and lenders utilising technology to drive their direct propositions, will have a big impact on the number of mortgage advisers left in the market in a few years time.”
He warned advisers that as technology makes much of the lending world more efficient, advisers that don’t embrace this change “run the risk of being left behind while others meet the needs of your customers”.
Bailey suggested the single best move for brokers right now is to add a chatbot to websites alongside a digital fact find that “guides your customer to you”.
As lenders gain access to data to drive streamlined processes, he said collaboration with other third-party software will transform the market within a couple of years.
“Once one provider achieves this kind of processing, it will snowball,” he added, quoting Amazon CEO Jeff Bezos: “Technology is not disruptive. Customer adoption is.”
The power of open banking
Maria Harris director of retail mortgages at Atom Bank, also attending, said consumers with complete control over their own data and who they share it with will be better positioned to vote with their feet.
She warned: “I think the assumption that [digital-only channels] will be for simple remortgage and product transfers is a dangerous one.”
Harris added: “Picture this. You’re sat at home on a Sunday evening indulging in some house surfing and you click on a house you like the look of. Your platform provider or the online agent’s third party provider pops up and asks if you’d like to know whether you can afford to buy this house.
“With a few clicks and minimal data input, the third party has called a credit agency, assessed your income and expenditure based on current account data, run you through the Decision in Principle engine of a number of lenders and presents you with options of which lenders you pass with and how much they would lend you.”
She added: “The product selection may be the more challenging part of the process, but I think it will be possible.”
Harris said this purely digital customer journey would work for first-time buyers and seasoned homeowners alike, particularly if they have never experienced a broker’s service.
“The shift will be driven, not by tenure or customer type, but by customer behaviour and choice,” said Harris.
Jeff Knight, director of marketing, specialist lender Foundation Homeloans said technology is both friend and foe for the broker.
“Pre-credit crunch, people said the internet would decimate market share for advisers and the opposite happened as brokers tightened their grip. However, brokers will lose market share on vanilla cases and product transfers but that will be offset by the rising specialist market.”
He added that no-one can hide from technology as it grows exponentially and advisers need to stay visible on internet search, because lenders are making sure they appear.
“What we don’t know is how long consumers will want to speak to advisers. The only way to find out is to keep asking them what they want.”