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Mortgage tech firms innovating through coronavirus as brokers turn digital

  • 15/05/2020
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Mortgage tech firms innovating through coronavirus as brokers turn digital
Lockdown has left mortgage tech companies busier than ever, as they fill the emerging demands of an industry turned on its head.


The coronavirus outbreak and social distancing restrictions knocked the property and mortgage market sideways.

But out of the disruption, brokers are transforming processes and finding tech solutions to streamline business.


Time to take stock of technology

In recent years, there has been a spate of companies offering solutions for home working, customer engagement, client bank management and faster case applications and submissions.

Take-up has slowly been filtering through to the market.

But the downtime enforced by Covid-19 has meant a rush of advisers are now exploring these services for the first time.

And many technology companies have reported an increased demand for products, as a result.

Conor Murphy, chief executive of Smartr365, said: “There has been a clear acceleration in the adoption of technology, from remote working tools, to CRM platforms and digital ID verification.

“We’ve seen growth in both engagement and sales figures as brokers embrace the technology available to support their business and clients through the lockdown.”


New tech here to stay

Many advisers are realising now is the time to make the digital changes that will keep them relevant with customers, not just now, but into the future.

Practices adopted at this time will continue after coronavirus, according to Mark Lofthouse, chief executive of Mortgage Brain.

He told Mortgage Solutions: “We have experienced an increase in demand for us to build new websites for advisers and sourcing plug-ins for those who have a website, which enables customers to self-service and then contact the adviser to progress.

“About 24 per cent of advisers don’t have a website, and the effect of coronavirus is that we’re seeing more advisers embrace the digital channel.”

And the brokers who are using this time to build their digital expertise will find themselves better placed to ride out the Covid crisis and come out in good shape.

Rameez Zafar, chief executive at Eligible, which offers software to manage client databases, said: “Many business owners and managers lived through 2008 and know in these types of markets you need to be decisive and embrace what’s changed.”

Maria Harris, financial services consultant and founder of Digital Cat Consultancy, said: “Now that we’re starting to see the first tentative lock-down exit plans, it feels like social distancing and reduced office-based working is going to be here in some format for the foreseeable future.

“For brokers and lenders to survive and find a way through the long-term impacts of Covid, embracing digital technology and being able to adapt quickly to new solutions and potentially a different shape of market is going to be key.”


Security barriers overcome

In the past, security concerns over technology have prevented wider adoption, with some areas of the market distrustful of wider digital services.

A constant stream of data hacks and the increase in fraudsters plays into these fears.

However, technology has fought back against these threats.

Harris continued: “The biggest industry barrier previously to using digital channels was security and managing risk, so we’ve seen a corresponding uptake in tools for electronic identity and verification, anti-money laundering etc, which has helped mitigate any concerns around impersonation or identity fraud.

“These solutions have been around for a while and some came directly from the Financial Conduct Authority (FCA) sandbox so it’s encouraging to see them now getting the traction and credit they deserve.”

For example United Trust Bank, of which Harris is a non-executive director, has recently extended the use of its facial recognition ID verification tool, removing the need for customers to meet face to face with solicitors to prove their identity.

The changes will ultimately benefit the customer who will stop having to perform the same checks multiple times, Harris added.


Innovation on steroids

Out of the current crisis, we can expect a spate of innovation and reinvention, as start-ups and innovators work to create solutions for the new normal.

Existing system providers have been rolling out new functionality and tweaking offerings to help better support the industry with working.

At the same time, banks, lenders and providers have been quickly working to improve desktop and automatic valuation models that don’t require physical visits to properties.

Ross Boyd, founder of mortgage comparison site Dashly, said:Times of economic disruption are almost always followed by innovation and businesses generally being more open to new models and technologies.

“We saw that after the global financial crisis when countless new platforms emerged, and it will almost certainly happen again this time round.

“In fact, we could see innovation on steroids such is the magnitude of the current economic crisis.”

He added: “What we’re also now seeing is larger, more established firms that previously hoped to build these tools in their own roadmaps becoming more open to working with smaller technology partners to utilise the technologies far more quickly.”


Tech firm mergers

James Tucker, chief executive of Twenty7Tec, said he has seen the current environment as an opportunity, with more time to work through and find solutions with his team, as they ask “what can we deliver on really quickly that will add value to the market at the moment?”.

The market will be forever changed by the Covid crisis, according to Tucker.

He said: “Processes and experiences that are not great from the customer point of view are going to be replaced by slicker tech with brokers who want to embrace that.

“There’s no way customers are going to want to fill-in papers, they are going to want to do it online.”

However, it could also be a time where a lot of consolidation of tech firms takes place, as some smaller firms struggle to access funding in the current climate.

Tucker said we could see some small firms potentially go out of business but added that Twenty7Tec is “very much in the market for acquiring businesses”.


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