According to independent financial research company Defaqto, 8,968 mortgages were either brought to market or updated by providers between 1st April and the end of June this year. In addition, almost 600 mortgage products were removed from the market during this period.
This demonstrates the rapid pace of change in the banking sector, and the challenges facing providers in terms of keeping up with competitor activity.
Defaqto's analysis of all mortgages on the market has identified that a total of 414 new mortgages were launched within the three month period, and providers had made 8,554 changes to existing products, including amendments to their Loan-to-Values and interest rates.
In terms of specific mortgage products, Defaqto data shows that:
- 186 brand new fixed rate mortgages were introduced, there were 4,815 changes to existing fixed rate deals and 309 fixed rate products were removed from the market by lenders
- 80 standard tracker rate mortgages were launched, providers had made 1,687 changes to existing products and 108 of these mortgages were pulled by providers
- 99 buy-to-let mortgages were brought to market, with lenders making a total of 715 changes to existing products and removing 66 from the market
Given the speed of change in the mortgage market, lenders are faced with three key challenges:
- Keeping on top of what competitors are doing, and being aware of new launches or product changes as soon as they happen
- Being able to respond quickly to take advantage of opportunities or to counter threats
- Identifying how to make their mortgage product stand out from the competition and how they can cut through the noise of competing products to reach target consumers
As a result of these challenges, access to robust competitor intelligence is becoming increasingly important for providers within the banking sector to support the analysis required to develop and maintain competitive products.
Defaqto has launched a new web-based product research application - Defaqto Matrix - that provides firms with independent, whole of market competitor and market intelligence on the banking sector.
This will help providers understand where their products sit in relation to competitors', what features their products need to have in order to stand out and how to position them for maximum impact.
The application's key features include:
- Reports on product changes - enabling firms to see at a glance what new products have been launched or whether any features have changed in competitors' products
- Access to historical product data - allowing providers to assess how a particular sector or product type has changed over time
- The ability to compare the features of one product against another - facilitating analysis of a product's key strengths or weaknesses in relation to a competitor's
Brian Brown, Defaqto's Head of Consulting, said:
"Providers in the banking sector are facing a number of significant challenges, including rapidly changing and crowded product markets and consumers with increasingly complex and individualised needs.
"The pace of change within the banking sector is phenomenal, particularly when it comes to mortgages. Banks need to stay ahead of the competition to capture and retain market share. However, there are significant challenges involved in putting the right type of product together.
"Competitor intelligence is central to success within a rapidly changing market - knowing what's changed as soon as it happens, being able to respond quickly and understanding how to communicate a product's USP to really hit home with target consumers.
"Technology as an enabler to this process is becoming increasing critical. Defaqto Matrix provides access to independent, accurate and comprehensive financial product data. It is a key enabler to help firms stand out from their competitors and grasp opportunities head on."
