Richard Howell

Bankhall

Technology can be a double-edged sword. While it is very useful for replicating and speeding up standardised procedures and processes, it may struggle with the complexities and challenges posed by some sectors and particularly the sub-prime market. However, online activity should be encouraged if it can be implemented effectively. BM Solutions has recently announced that it will only accept new business online so others are sure to follow if the initiative proves successful. But there will always be a need for the invaluable input that comes from brokers, particularly in the area of key facts illustrations (KFI).

At the same time, intense competition in the broking sector may see some brokers move to gain competitive advantage by utilising technology to enhance the service they provide to lenders. This is all well and good, providing we do not sacrifice attention to detail and client service on the altar of lead turnover. The trick with technology is to avoid throwing the baby out with the bath water.

Harry McGeough

Dunfermline Building Society

As an industry we still have some way to go before we all reach 100% online propositions and I am not even sure if it is what all lenders (or all borrowers) want to achieve.

In many ways, particularly for the intermediary sector, this could be seen as utopia with everything completed online, using electronic signatures and transferring funds via BACS – all done within a minimum timescale.

The immediate disadvantage is whether the various systems are sufficiently compatible or robust enough to ensure a 100% performance at all times – and would any of the suppliers wish to give such a guarantee? This is perhaps more applicable, and more of a concern, to major names like Alliance & Leicester, which transacts all of its intermediary business online. Add to this the complete lack of a real relationship between a broker and lender.

The major problem for all lenders in the foreseeable future is the ability to respond to both online and paper-based application processes and deliver the same quality of service to both types of borrower. After all, do clients care how their application is dealt with as long as it is handled expeditiously, accurately and at the right price?

The winners in the future will be those lenders who can respond appropriately to all of their broker contacts and those brokers who have a flexible approach to the future needs of their clients.

Mark Leaper

Vesta Packaging

The industry is still quite a distance away from 100% online propositions for all lenders, but as websites become more sophisticated, and brokers become more adept at using them, usage will increase.

As it stands, many advisers are able to use websites to source mortgages, make applications, produce KFIs, get access to mortgage calculators and obtain details of exclusive offers. On some websites brokers can view the progress of their various cases and obtain details of outstanding items. Many even link with an in-house sourcing application.

However, it has been the case in the past that in the non-conforming sector, some brokers have had trouble getting accurate information. Vesta and others have developed systems to deal with this situation, such as providing free access to a bespoke mortgage sourcing system interfaced with the credit bureau.

Mark Chilton

Purely Mortgages

While more and more lenders are moving to online decisioning and application submission we are still a long way away from a market with 100% online propositions.

Many lenders such as GMAC RFC, BM Solutions and Alliance & Leicester are now reaping the benefits of online-only trading with significant cost reductions, while many others are only paying lip service. However, an online agreement in principle is only of value to both the lender and the intermediary if it is fully credit scored and the decision is stood by. Only GMAC RFC offers a binding decision online but others, again led by BM and Alliance & Leicester, honour their virtual offers.

At the other end of the scale Abbey now appears to be completely re-underwriting cases despite providing an online decision, leading in part to the significant and well publicised administration problems it is suffering from.

The advantages of electronic trading are absolutely massive. The savings available to intermediaries in the vast majority of cases prevent them doing unnecessary work pursuing business that will ultimately fail. The administration savings and sheer efficiency from reducing dead rates from the application are the most visible sign of this. Lenders have woken up to the cost benefits to them, but their failure to drive a proper electronic base, which links to intermediaries’ systems, means they are only really concerned about their own cost savings and not those of the industry as a whole.

Mike Allison

Personal Touch Financial Services

Compared to what has been achieved in the protection market, the mortgage industry has a long way to go before online propositions become standard.

But, as with the protection market, there are two key considerations. First, to what extent is it worth it for brokers? Second, how easy is it to do business online?

The first question rests on whether providers are prepared to incentivise brokers to move online. Clearly, if a lender makes savings then it is only reasonable to pass some of these on to brokers.

The more important issue though is whether doing business online helps clients. It is easy for the provider to put the products on the shelves. But the real trick is how they help brokers sell to their clients. One way is to help brokers enhance client service, and BM World’s one-minute decision is a good example of this.

Perhaps the biggest deterrent to doing business online is the problem – perceived or otherwise – of linking to providers’ systems. Personal Touch’s solution has been to build Dashboard – a complete business process system that enables brokers to conduct all their mortgage and protection business online in a fully compliant manner.