"Brokers are seeing the benefits of digital efficiency, enabling them to serve more clients in less time."
We spoke with Natalie Strong, senior relationship manager at Mortgage Engine, about technology and how it can help brokers lead the mortgage market recovery in the wake of the Covid-19 crisis.
FR: What does your role at Mortgage Engine involve and what are your priorities for the year?
Mortgage Engine’s platform uses application programming interface (API) technology to allow brokers to source multiple decisions in principle (DIPs) from lenders via a single application. My job is to work with broker firms, lenders and their technology providers to implement that API solution.
On the broker side, I always start by asking what pain points they experience with the overall mortgage application process. How can it be improved? Where are the inefficiencies? Often it comes down to the fact they have to rekey data for multiple applications, or that lenders are not always forthcoming with updates on the status of applications.
Our key priority for the remainder of 2020 will be expanding our proposition by connecting more lenders with our API platform.
FR: Before the pandemic, what were the key challenges facing advisers in the mortgage market?
Overall, the lack of digitalisation across the market was a real barrier for advisers. The mortgage application process was – and still is – quite inefficient and admin-heavy. It often involves a lot of paperwork. For example, brokers are occasionally required to submit multiple applications to different lenders for the same client, rekeying the same data points multiple times. Getting updates on the status of an application can also feel similarly fragmented and slow.
Buyers are often asked to provide copies of their passport to their broker, solicitor and lender as part of the anti-money laundering (AML) screening process. In a time where consumers can open bank accounts using digital identification platforms – most of the challenger banks have adopted this process – it seems almost archaic that the mortgage process is so dependent on paper based security checks. AML screening could so easily be digitised and automated – but lenders need to agree on a standard they’re willing to accept before brokers can start to buy in to the technology.
In addition, brokers have to deal with the same wider challenges the rest of the market is facing – political and economic uncertainty around Brexit, for example, or regulatory changes which have a negative impact on buy-to-let and lead to landlords exiting the market.
Technology existed before the pandemic which could help brokers meet those challenges and improve efficiency across the wider market, it just wasn’t being widely adopted or used to its full potential.
FR: What new challenges did the pandemic bring for advisers, and how would you say they have reacted?
The immediate challenge for many brokers was having to move their office-based businesses to remote set-ups. This meant they couldn’t meet their colleagues or clients in person, or access files that were on paper and had not been digitised or uploaded to a cloud-based system which they could access from home. The race was on to fill the gap, and brokers were fast to adopt video conferencing tech and get their businesses online as quickly as possible. Then came a series of obstacles to navigate: the lockdown led to the effective closure of the purchase market, lenders started to withdraw products – particularly high LTVs – and the market grappled with challenges around not being able to carry out valuations.
We have seen an increase in enquiries from brokers about Mortgage Engine’s API platform during the crisis, which connects brokers with lenders and enables multiple DIPs from a single application. Brokers have seen how technology can improve their processes and enhance their service offering - many are looking at ways digital can drive growth in the wake of the pandemic.
FR: How can the UK mortgage sector return to strength post crisis?
Digital adoption in the market accelerated in response to the crisis. It is vital brokers and lenders do not lose the pace here.
Tech providers have used the lockdown to refine and enhance their platforms. Brokers are seeing the benefits of digital efficiency, enabling them to serve more clients in less time. Lenders are similarly demonstrating new enthusiasm for tech solutions, driving their digital transformation projects forward at rapid speeds.
Pent-up consumer demand for housing will return, as will lenders’ appetites to create new products and offer finance. Brokers will continue to play a fundamental role in supporting borrowers step onto or up the housing ladder. Technology has the potential to enhance every stage of the chain, starting with a faster and more efficient application process.
FR: If you could read one headline about the mortgage market in 2020, what would it be?
Mortgage Engine is already providing DIPs for Santander and NatWest, but we’re working to integrate even more lenders with the platform. Our target is 80% of the lending market, so my headline would be: “Mortgage Engine providing DIPs for 80% of UK lenders via its API platform”.