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Coronavirus crisis has given equity release a ‘welcome nudge’ towards digital tech

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  • 06/05/2020
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Coronavirus crisis has given equity release a ‘welcome nudge’ towards digital tech
Legal & General Home Finance CEO Claire Singleton says the use of remote advice and digital technology during the coronavirus pandemic is likely to be a permanent shift for the equity release market.

Since the government announced its social distancing measures to stop the spread of Covid-19, Legal & General Home Finance (L&G) advisers have switched to giving remote advice to borrowers over the phone or by video links from their homes.

All customer service staff, except five essential workers, are also taking calls from their homes.

The firm now has a fully digital drawdown process for its existing borrowers and is using desktop valuations to assess new applications.

Singleton (pictured) said equity release borrowers were responding well to the changes and there was more appetite among clients to digitally sign documents rather than waiting to receive paperwork in the post.

Equity release advisers, providers and solicitors have all been forced to modernise and evolve their operations to keep the lifetime mortgage sector open for business during the coronavirus pandemic.

Face-to-face to mortgage and legal advice, once the bedrock of the equity release sector, has been replaced with video conferencing and phone calls.

The Equity Release Council has temporarily relaxed its requirement for borrowers to see a solicitor in person before they complete their loan. Instead solicitors can use a mixture of written and telephone or video advice. However, when the government relaxes its restrictions these measures will cease.

The changes put in place by providers and advice firms, however, are likely to remain said Singleton.

“The equity release sector has been given a welcome nudge into doing things digitally and I think it is unlikely firms will try and unpick all these processes after the lockdown restrictions are lifted.

“I think the technology advisers are using now like zoom, teams and skype, will stick around. It’s about giving customers choice to transact in a way that suits them.”

Transformation of customer process

L&G Home Finance’s chief risk office Sally Clayton said a positive to have emerged from the crisis was the transformation of the customer process, after the sector has been product-focused for so long.

But not all parts of the equity release process are digital. Families applying for new equity release mortgages still need to physically sign documents. Singleton does not think wet signatures for new loans will be replaced “anytime soon”.

The lockdown restrictions will also make firms re-evaluate their working practices, added Singleton.

“People will question whether they need to make that two-hour train journey for a client meeting or a board meeting because video conferencing is so effective.

“You can widen your talent pool too if staff can live anywhere in the country.”

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