FR: What will be your focus over the next six months?
In my role I have the opportunity to meet entrepreneurs, investors, existing banks and building societies with a vision to bring new products and businesses to market. Many have identified a niche in the lending space and it is my job to formulate solutions to make their ideas a reality. Whether this is by way of bespoke servicing or software deployment, it is both rewarding and exciting, especially as they establish themselves as key entrants in the mortgage world.
As the regulatory landscape continues to change, my focus will inevitably be helping our clients to negotiate their way through this ever changing minefield. It is an exciting time for Vertex as more lenders recognise the value of outsourcing, especially since the introduction of MMR, to improve the customer experience and manage regulatory changes with minimal impact.
FR: How do you view the industry post-MMR and what challenges are lenders facing?
Lenders are under increasing pressure to demonstrate that the appropriate advice has been delivered to borrowers, and with this comes a number of challenges. Resource and skills management is a key factor, as lenders are required to offer a lengthier advice process to customers and advisers must hold the necessary mortgage qualifications. As a result, lenders are turning to outsourced service providers such as Vertex to access these skills and business process support. Lenders are also required to comply with greater reporting requirements and this is where we see technology as the solution. The right loan origination and administration systems can streamline the advice process, while ensuring the necessary reporting takes place.
One of the biggest challenges lenders will be facing during 2015 is complying with the EU Mortgage Credit Directive and the demands of this will no doubt create new technology and administration requirements.
FR: What are the hot topics in the industry at the moment and what do they mean to lenders?
The government’s Help to Buy scheme has helped many borrowers to enter the housing market and continues to be a subject of much discussion. Interest only loans and the management of sub-prime arrears have also been under the spotlight. With the introduction of Mortgage Market Review (MMR) regulations, a greater emphasis has been placed on delivering the appropriate level of advice and affordability checks. It is my view that any products that help new borrowers get into the owner occupied space are welcomed. They also help to reduce the vast differential that has been created by house prices increasing at an accelerated rate of 10.4 per cent in the year to October 2014 when compared to that of income, which rose by just 1.3 per cent in the year to September 2014. However, what is fundamental is that the necessary controls, procedures and advice are in place to protect these borrowers.
Our industry needs innovative products such as these to keep pace with the borrower’s requirements and the high standards they expect. As for our people and systems, Help to Buy and interest only do not represent any significant challenge because our customer teams are fully qualified to offer advice and our systems can support very diverse products and cater for their associated nuances.
FR: What single piece of advice would you share with lenders?
There are a number of essential elements for lenders to consider when expanding into new markets and for new start-ups to take on board but one area that is often overlooked is the origination journey from the end customer’s perspective or that of the broker.
A seamless, simple and clear origination journey is the key to a successful lending business regardless of whether that business will come from brokers or direct customer acquisition, and building significant volume with minimal cost, is essential to the lender’s survival. Brokers also need confidence that every application they put with a lender will be processed quickly and accurately with the broker fully informed of the latest position at every stage of the journey. This is as equally important whether the lender chooses to manage the application journey in-house or elects to outsource their business requirement. Consequently a lender must ensure that ample time and research is placed in their choice of supplier.
