In today’s world where technology advances so quickly, there is often a real danger of getting left behind by competitors and I read recently of a situation in the US where such technological inertia eventually resulted in a business having to close its doors.
American Equity Mortgage – a lender – recently had to shut for business due to, what analysts say, was a lack of investment in technology, meaning it could not compete with other lenders. A multi-branch lender, the company had already sold off its name and assets, but its apparent Achilles heel was allegedly investing too late in the technology that many US lenders already had as a matter of course.
It would appear that there is a big shift in the US towards ‘digital mortgages’ – intelligent, online, mortgage propositions that many lenders hope will mean a significant drop in their overall costs of origination. From reports it is believed that American Equity Mortgage was too late to the ‘digital mortgage’ game leaving it unable to bridge the gap which had already been opened up by many in its peer group.
Now this example of ‘not keeping up with the Joneses’ from a technology viewpoint might be a lender business many thousands of miles across the pound, but there are clearly messages and lessons to be learnt by all mortgage stakeholders in this country, especially intermediary businesses.
Much of the debate about the growth in ‘robo advice’, for instance, has centred on whether advisers need to be wary or fearful of the threat, and whether it is worth their time investing in their own ‘robo advice’ solution in order to be a part of that competitive threat rather than a potential victim of it.
It’s understandable that firms will be weighing up their level of involvement – if any – and perhaps the ‘traditionalists’ might see no threat at all. However, my view tends to be – and this is relevant to all businesses – to provide as many ways for your customers to use you as possible. We all know that, in the retail space, the growth of online activity and sales continues to soar and, even with something as different as mortgage advice, the initial contact from customers is increasingly likely to be via the internet/apps, etc.
Having a ‘robo advice-esque’ proposition – whether it’s one created by yourself or one via a third-party – may well be able to open further doors for potential customers to come through. It is, of course, hard to predict the future but the common sense approach is surely to cover off as many bases as possible – none of us know how much business might be coming through the various channels in the years to come but the overall feeling has to be that technology will increasingly be used.
Even if your client has no intention of going through the whole mortgage advice process via the ‘robo’ method, there are likely to be a number of borrowers who might want to start via it, and then jump off to a ‘human being’ somewhere along the line. In a way, it could be viewed as another marketing gateway which has the capacity to deliver full advice but ultimately might only act as a digital doorway through which your clients can walk through.
What we should probably counsel against is doing nothing, assuming that technology changes are simply fads, and expecting the ‘old ways’ to continue forever. That’s a distinctly unlikely outcome so, at the very least, please make sure you are at least looking into these areas, and how you might be able to work these into your business proposition. There is, of course, time and Stonebridge itself is working on these areas in order to support member firms and find suitable solutions for them. In my experience, advisory practices tend not to let the grass grow under their feet and this would be one area where a similar approach should be followed.
