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Digital-only bridging lender Morpheus launches to market

  • 21/05/2024
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Digital-only bridging lender Morpheus launches to market
Morpheus, a bridging lender that hopes to “disrupt the market” with its digital-first proposition, has launched into the specialist lending space.

The lender was founded by CEO Matt Mawdesley (pictured, middle left), who was previously at Together as its head of strategy and innovation for over three years. He also has extensive experience in the technology and finance space, including previous employment at listed retail company AO and NatWest Group.

Lee Jones is co-founder and chief financial officer (CFO).

Mawdesley said specialist lending was typically “behind the curve” with technology because it was a complicated market, and because larger banks did not want to come into this space, there was not much “pushing of technical disruption in the market like we saw with the challenger banks in the high street banking space”.

He added: “A lot of these lenders have quite complex backbooks because of multiple products and quite complicated underwriting, with often extensive assets. The systems they utilise are legacy platforms.”

Mawdesley said this meant lenders build on top of existing technology platforms and “increased their architectural and technical debt continuously” which made it harder to “embrace more modern technologies. Most lenders will take years and tens of millions of pounds to catch up with what we have managed in a just few months at a fraction of the price.”

He said Morpheus had managed to build what he believed to be the first digital-only bridging proposition in the market, as the process was digital from the enquiry stage all the way through the drawdown of loans and signing of documentation’.

Mawdesley added: “Everything is paper-free; we can do a full end-to-end proposition completely digital. Zero need to print, scan, fax, email… We streamline the journey and still have a human doing the underwriting.”


Speedy underwriting 

Richard Lawton (pictured, middle right), formerly head of bridging at OSB, also works at the lender as director of operations.

Lawton, who has nearly three decades of experience in financial services, will oversee the underwriting team.

Mawdesley said Morpheus would look to substantially reduce the time to fund to within a week when the information is all available, which was significantly shorter than the market average of 58 days.

He said most of the time taken to underwrite was spent with the broker going back and forth with the lender to send additional information, on top of valuation and conveyancing requirements.  By reducing these old processes, injecting modern technologies and having sensible operating models, these can be substantially reduced.

The lender is also working alongside a specialist data and AI company to manage digital valuations, with other cases requiring a physical valuation being completed by a panel of valuers within days.

Mawdesley said: “We’ve built a platform to make all of that slick, streamlined and efficient with automated journeys, automated collection. We embed AI, digital valuations, digital biometric authentication, digital Know Your Customer [KYC] and anti-money laundering [AML] checks. All of it is geared towards getting the information securely and quickly into the hands of an underwriter to make a quick decision to facilitate the quick release of funds for customers.”

Lawton said the lender would still be underwriting the same information, just in a “quicker and more efficient manner”.

Morpheus will not progress a case to the underwriter until it is fully packaged with all the necessary information, Mawdesley said.

“What that means is Richard then picks up a full case, and his team pick up a full case, and they can start underwriting immediately,” he added.


Entering the bridging market

Morpheus has launched with a select panel of brokers initially and will later expand. The proposition will also be intermediary-only at first.  

Mawdesley said the number of brokers working with them could change in the short term, but the lender wanted its traffic to come through brokers first, and it would always work with advisers who “want to go on a tech journey with us”.  

Morpheus will also engage with brokers and receive feedback on its proposition.  

Mawdesley said the lender’s size and digital capability meant it could make adjustments quickly and implement changes more efficiently.  

“The brokers that we spoke to… are really keen for this because they’ve not seen any innovation disruption for years. They get equally frustrated with lenders as customers do. So, I think it feels that the response we’ve had is a bit of relief, but also this is really exciting,” Mawdesley said.  

The lender will provide loans of up to £750,000 up to 75% loan to value (LTV) on terms of up to 12 months. It will lend against residential, semi-commercial and commercial properties in England and Wales. Its rates start 0.89% with “standard fees and costs”, Mawdesley said.  

Mawdesley said as well as its digital ability, the people working for the lender were its “biggest asset”.  

This includes Steve Miller, former chief risk officer at Together, Roland Emmans, former head of growth lending at HSBC, and Tom Pirrie, chief information officer at Connells Group. 

He said: “In the bridging market, there’s so much human experience needed that you’ve got to have both. So, what we do is combine a really good technology product with some high-class experienced people across lots of different areas.” 

Mark Cunningham, CEO and co-founder of WhenFresh is also on the lender’s board, and they recently welcomed Ash Richardson as head of sales who spent time at RBS, NatWest and as a broker himself.   

Lawton said he would ensure the lender lent responsibly, adding: “The thing with bridging is it’s very easy to say yes.”  

His time at OSB was focused on building safe and scalable operational processes, and he would bring that attitude to Morpheus from day one. 

Mawdesley said he wanted the lender to scale up in a controlled way and not “just say yes to every deal, because that’s when things start to go wrong”.  

He added: “This market is ripe for disruption, and the customer and broker need to be at the heart of this. If we build the right proposition, focus on our customers and create a repeatable and scalable model, the growth will come.” 

He said he wanted Morpheus to be known for its consistency, its customer centric approach and as and a lender that genuinely improved the technology for their benefit. 

Mawdesley said there was room to expand its product range, but first it would “build a great bridging proposition, and then expand into other areas such as commercial term and buy to let”. 

He said the lender also wanted to focus on sub-£500,000 loans where the bulk of the volume sits, and also conversely receives the slowest time to fund. 

Outside of the technology, they have customers at the forefront of their thinking. Mawdesley was clear that they will always take a balanced and sensible approach, and that just because you can charge customers due to the unregulated nature, you shouldn’t necessarily. 

Matt added: “I’m really excited to get out there, show the market our proposition and start proving that there is a far better way for customers and brokers to access the specialist lending sector.” 


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