We are still operating within a fragmented, isolated, cottage mortgage industry, but we are in a genuine watershed moment, with a real chance to change.
The need to change
When the UK’s mortgage industry took on its current form around 25 years ago, it was operating within an analogue and decentralised financial services sector, with little interconnectivity. At that time there was no need for anything different – a prospective homeowner would head down to their local high street bank or financial advisor, chat through the options in front of them, and jump into the mortgage process from there.
A lot is now different, even ignoring the upheaval we’ve been through since the start of 2020. Consumers expect fast, frictionless digital services; technology has advanced so that the financial services industry is now largely digital, and collaboration and connection between different areas of that industry have dramatically increased.
Yet the mortgage sector has been slow, even obstinate, in its approach to moving with the times. This must change, not only to give borrowers the best mortgage journey possible but for a broker-based industry to survive.
Seizing the opportunity to change
It’s rare that an entire industry, let alone the entire global economy, is presented with such challenge and upheaval as we have seen thanks to COVID-19. It’s important we remember the devastation it has brought to many both personally and professionally, but the reset imposed on the mortgage sector is too important an opportunity to ignore.
The key question is not what can be changed – this has been made clear thanks to the pandemic, with increased digitalisation, interconnectivity, and automation emerging as the transformative processes which both kept the industry afloat and provide the foundations for its (r)evolutionary future.
Instead, we need to ask how we make that change happen. How do we as an industry get both the small- and large-scale players on board to embrace the promise of technology?
It’s a question without an objective answer, but we believe that there is a clear starting point: now that technology’s value has been proved beyond any doubt, we need to ensure it remains central to the mortgage journey in the COVID-19 recovery and beyond.
Responsibility for this sits in several places:
· Brokers, networks and clubs – the main obstacle to maintaining the progress of tech sits with those working in the trenches, delivering advice and governing how advisors operate. Brokers need to keep an open mind, and networks and clubs need to make sure they are enabling tech adoption rather than hindering it
· Technology providers – those developing the technology at the heart of the mortgage industry’s future need to not only continue banging the drum for change but make sure that all other stakeholders understand how easy adoption is and communicate the benefits they’ll experience – spreading knowledge is a key part of the battle
· Lenders – institutions need to continue the work they’ve done up to now, integrating and partnering with tech providers, and acting as engaged partners in digitalising the mortgage journey
Riding the wave
Considerable momentum for change has been built up during the COVID-19 pandemic, and we are approaching a critical juncture as large parts of the country have returned to ‘normal’.
If we as an industry fail to keep the momentum going and use it as the platform to shape the mortgage sector for the next 25 years, we’ll have missed the best opportunity we’ve ever had to revolutionise the homeownership journey in a generation.