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Legal and General invests £3m in ‘no re-key’ mortgage submission technology Smartr365

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  • 31/07/2018
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Legal and General’s fintech business has made a £3m minority stake investment in Smartr365, the mortgage client relationship management, sourcing and application submission system.

The investment will be targeted at product development.

Smartr365 said the strong roadmap of delivery includes a raft of enhancements, including further Application Programming Interface (API) development, after the Halifax partnership in March.

L&G is the second investor in Smartr365 following £1m last November from venture capitalist and fund manager Fig, which has also invested in data verification software Mogo and EyeQuant, a website optimisation tool.

Developed by majority shareholder Conor Murphy, also director of London brokerage Capricorn Financial, Smartr365 is a software as a service (SaaS) company, which supplies systems to the UK mortgage intermediary market.

Smartr365 offers an online fact find, client relationship management and customer verification processes, which speed up the collection of data to condense the mortgage administration process from ‘weeks into hours’.

The system, which has users in the low hundreds, also offers a customer portal, which the firm said helps to build and cement long term engagement between advisers and their customers.

 

The business strategy

 

Smartr365 aims to make individual components available to other mortgage businesses and CRM providers, such as the data interface between lenders and brokers, including Lendrconnect, a mortgage application programming interface (API) software.

Smartr365 said LendrConnect, along with the other API connections and technologies within Smartr365, should make data entry a thing of the past for all licensing intermediaries.

Bernie Hickman, CEO, Legal & General Insurance said it had researched the market and that this ‘frictionless tech’ was the most advanced and complete solution available.

“In Conor, we also felt he had the same vision we had,” he added.

Hickman told Mortgage Solutions L&G is not ‘backing one platform’ but sees this as a strategic move to create partnerships in the market.

“API is one of the most obvious links between the broker interface and adviser and lender systems. Lendrconnect will be offered to other mortgage lending platforms and is the key way we see that we can work with the whole market” said Hickman.

L&G is in discussions with many other networks, and said it will bring its lender relationships to bear on the system’s development, and as part of the due diligence process, sat in and watched as Smartr365 did pitches to brokers to satisfy itself ahead of investment.

“This is a foundational investment, but its not the only one that we are working on,” added Hickman.

The insurance giant continues to fuel its strategic technology vision, after becoming a ‘significant shareholder’ in Salary Finance, a technology start up and lender to those with modest incomes in October last year.

Legal and General’s MD of Fintech, Nick Frankland will join the board of Smartr365 as a non-executive director alongside James King from Fig and Conor Murphy.

Frankland said: “We are huge supporters of the adviser market at Legal & General and recognise [brokers] are invaluable in helping people through the home financing process. But we also recognise that they have to work very hard managing the administration when they could be using technology to free up their time and help more customers.

“Within the fintech business in Legal & General we look for opportunities to help markets on the journey from analogue to digital, especially where the customer experience can be improved as well.”

Director Smartr365 Murphy launched the software in 2016 and said the strategy has always been a ‘platform play’ to host all the ‘best technology’ in one place.

The software brings together Twenty7Tec’s sourcing system, Hometrack’s software, Smartr365 and the Halifax Intermediaries’ API technology as other API integrations continue to be developed.

Murphy said in 12 month’s time the system, which already verifies address, identification and income, which is already fully operational, will be radically different.

Bringing in API links with the biggest lenders will be transformative for brokers, he said, making it worth the change from the analogue world to a full commitment to digital.

“I run a brokerage and the top six lenders give us 65% of our business, the top 16 around 85 to 90% – if you can say two-thirds of your business is end to end, it’s transformative. If brokers are running two different systems, it’s more of a hassle to run five per cent of your business through a second channel so brokers are likely to make more logical choices in the end,” he said.

Murphy said: “The Smartr365 platform takes the administrative heavy lifting away from advisers, typically condensing 10 hours of work down to just one hour and allowing the focus to be the provision of sound advice.”

Legal & General Mortgage Club facilitated £65bn of mortgages in 2017 through over 9,000 mortgage brokers.

 

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