In the Spotlight with Matt Andrews, Bluestone Mortgages

We spoke to Matt Andrews, Managing Director of Bluestone Mortgages, about robo-advice and the importance of relationships between brokers and lenders.

Related topics:  In The Spotlight
Rozi Jones
15th July 2016
Matt Andrews Bluestone
"If lenders, whether specialist, challenger or traditional, can provide lending products and options for these consumers, supply and demand will gradually balance out in what is currently a skewed market."

FR: How will technology affect the way advisers, lenders and clients do business?

Along with the insurance sector, the mortgage market has come under fire in recent years for failing to embrace digital innovation.  While progress in this area may have been slow thus far, this trend is set to change. Specialist lenders and challenger banks are bringing agile technology and refreshing the way they interact with customers, whilst many traditional businesses continue to struggle with outdated and unalterable legacy systems.

One area that is developing rapidly is automated advice or ‘robo-advice’. Compared to some other financial products, there are unique barriers to launching automated services in the mortgage market, but the FCA’s continuing consultations on how financial advice should be defined suggest that it is open to looking again at the rules in this area.

This kind of technology can certainly be useful for streamlining certain tasks, but it’s vital that we don’t allow these tools to remove the broker and advisers from the process. For a start, if customers go through purely automated processes, it could mean that they lose out.

Robo-advice and standardised, automated processes are likely to make things worse for people who fail to meet traditional lenders’ strict criteria checks, for example, such as the self-employed or those with damaged credit scores. It is these people who need tailored underwriting that will allow lenders to truly understand their situation and make informed, responsible decisions.

FR: Do you foresee the supply and demand issue getting worse? What more can be done to ensure that people continue to have access to the mortgage market?

I foresee a lending industry that is able to cater to the growing number of people who are currently unable to access credit. If lenders, whether specialist, challenger or traditional, can provide lending products and options for these consumers, supply and demand will gradually balance out in what is currently a skewed market.

Intelligent sourcing systems will be the key to achieving this goal, however. Many big players are at risk of losing reliable and credit-worthy borrowers because of their strict and outdated lending criteria. The UK workforce is increasingly moving to be a combination of contractors, self-employed workers and freelancers, so we must ensure that we can offer products to suit each financial circumstance. This is also true for those individuals who may be a good credit risk, but who have experienced a life event which has left a negative impact on their credit scores.

In order to cater for scenarios like these, a balance must be struck between automated systems and real-world experience and expertise. To ensure a consumer’s individual circumstances are taken into account, and lending decisions are made on a case by case basis, it’s vital that technology in the mortgage market does not replace the human touch completely.

FR: If you could see one headline about financial services in 2016, what would it be?

"Specialist lenders put more power in brokers’ hands". Collaboration between brokers and lenders will be key as appetite grows for new products in the mortgage market.

Brokers are the link between lenders like Bluestone and the consumers we help, which is why these relationships are so valuable; if lenders give brokers greater authority to make key decisions, it will make a huge difference to the consumer, since brokers are used to working closely with their clients on a day-to- day basis.

For all these reasons, specialist mortgage lenders have a responsibility to support brokers and make them more at ease with our products, and that begins with ensuring we are honest and transparent. Now is the time for lenders to empower brokers yet further, giving them better tools and information to help them in their job – and ensuring a smoother, faster and more certain application process for consumers. The human touch that intermediaries provide, paired with technology, can mean the difference between a loan being agreed or rejected for many potential borrowers.

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