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Advisers increasingly seeing opportunities for automated advice technology – Iress

  • 22/05/2019
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Advisers increasingly seeing opportunities for automated advice technology – Iress
Advisers and lenders are increasingly seeing the opportunities for technology to make the mortgage advice process more efficient.


However, according to research from Iress, there is still much scepticism about whether this will lead to fully automated advice and how much impact this could have on the market.

In its Intermediary Mortgage Survey Report 2019, the technology provider noted that 60 per cent of the advisers and three quarters of lenders who responded saw this as an area of opportunity.

But only three per cent of advisers said they would implement a fully automated advice offering and 13 per cent said they would possibly do so – both down slightly on last year.

The most common threat that 20 per cent of intermediaries believe robo-advice poses is that of customers receiving poor, inaccurate and wrong advice to meet their mortgage needs.

Meanwhile 12 per cent of intermediaries believe there is an increased risk of clients going direct to lenders, and 10 per cent felt it could increase cyber security, fraud and money laundering risks.

Iress principal consultant for lending Steve Carruthers (pictured) told Mortgage Solutions that at present there were still significant doubts about whether completely automated advice would ever fully take off.

“There’s different interpretations of the term,” he said.

“But it’s generally technology enabling the process to be more efficient. There’s a different sense from intermediaries if that is happening yet.”


Better lender updates and conveyancing

Other trends highlighted by the report included the repeated desire from brokers to reduce the need to call lenders.

Half of calls made to lenders were to obtain case updates as those provided on-line, by email and text message are not fully real-time and, based on intermediaries’ comments, are inaccurate or with insufficient detail.

Instead brokers wanted more regular and real time updates from lenders on cases and the desire for direct online chat facilities which would help reduce call volumes.

Related to this was the need for technology within the conveyancing process to improve and reduce the time taken to complete applications.

“There’s a lot of good technology in getting to offer but that isn’t the key to the door,” Carruthers said.

“Conveyancing is where everyone still sees huge opportunities and the digitistation of Land Registry can’t come soon enough.

“And there is a desire within lenders to work with conveyancers to improve the updates and communications generally,” he added.


APIs and Open Banking

Application programming interfaces (APIs) and Open Banking appear to be the technologies where lenders see the greatest short-term gains and are currently investing in these areas.

In last year’s survey, 44 per cent of lenders said APIs would open up opportunities and this year’s survey shows lenders investing in this technology, with a third of those surveyed now accepting, or in the process of implementing, applications via APIs into their intermediary online digital platforms.

And last year, six out of ten lenders saw Open Banking as beneficial to the mortgage process, compared to 96 per cent this year.

“Lenders believe that Open Banking technology will improve the mortgage application process for customers through the delivery of quicker, more accurate decisions, faster processing times and less requirement for documentation,” Iress said.

Carruthers continued: “From lenders, who you would expect to understand Open Banking, this is the year we have started to see it come to the fore.

“The biggest challenge is customer awareness.

“But lenders can see the benefits of Open Banking and those savvy brokers who understand it can see this will evolve moving forward,” he added.


Advisers will remain market dominant

Looking at the wider market, 59 per cent of lenders expect lending to remain level this year with 27 per cent expecting to see an increase.

However, there was a slight difference of opinion regarding how this would be shared between advisers and lenders.

While 54 per cent of intermediaries expected their market share to grow this year, only 27 per cent of lenders agreed, with 77 per cent expecting it to remain level – both views continue to indicate the major share of the market will remain with advisers.

The Association of Mortgage Intermediaries (AMI) chief executive Robert Sinclair, said: “It is clear from this year’s data that these developments will continue to accelerate over the next two years as consumer demand for quicker, smoother, more informed decisions and transactions are delivered into the property and mortgage markets.

“What will be critical is how well broker firms and lenders engage in investing in the emerging tech solutions in order to preserve their role at the heart of the transaction.

“Only by embracing these changes will the consumer trust the broker for help and advice,” he added.


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