Fintech can boost bridging but brings fraud risks too – Hersch

From mortgage comparison sites and Open Banking to a complete digital mortgage experience, technology has helped streamline the entire mortgage process.

Automated processes and the associated time savings and reduced costs are undoubtedly good for both customers and brokers, but can the same technology help the bridging sector?

Bridging is traditionally seen as a product which requires human involvement with bespoke and tailor-made solutions.

So, it’s understandable there’s some debate about whether automated, algorithm-based advice delivered online without any human interaction can be a game-changer in the bridging sector.

On the plus side, brokers can benefit from technology at the research stage, when they will want to know and evaluate the products on offer for their clients’ particular circumstances.

Automated systems can also be used to keep all stakeholders informed during the loan application process through to completion.

But property investors will also crave the reassurance and confidence that comes with dealing with a professional and experienced human adviser.

Advisers themselves can use technology to improve performance, efficiency and profitability. Increased automation could also help during the underwriting process by speeding up the gathering of customer and property information, analysing and acting on that information.

Effective anti-fraud

The finance industry faces a tricky balancing act between implementing effective anti-fraud measures, while still offering a frictionless customer experience.

Criminals are increasingly using technology to commit fraud – by hijacking conveyancers’ email addresses or falsifying documents, for example.

But lenders and brokers can also use technology to put together an effective counter-fraud strategy. While algorithms can examine data and decide if an application is credible, we still need quality and experienced underwriters to cast an eye over all application data.

Future fintech innovations in the bridging sector may look to focus on speed.

Clients such as property investors often look to bridging lenders to provide funds faster than average.

Any fintech solution that can cut down the points at where an application may be held up or delayed will be welcomed by the industry.

Transparency is key too; so real-time tracking solutions which allow the client, broker and lender to see where an application is in the process will be useful too.

Digital mortgage deeds

Technology is already being used to verify identities.

For example, GOV.UK Verify is a secure way to prove who you are online.

The government-backed system partners with various companies such as Experian, the Post Office and Barclays to verify individuals’ identities without them having to show documents in person or wait for something to arrive in the post. The next step is for Verify to connect with the Land Registry so borrowers can sign their mortgage deed online.

Whatever kind of technology bridging companies opt to use, it’s vital to understand how people access the internet these days.

Sites and systems will need to be optimised for smartphone and tablets, and apps developed where necessary.