"The research suggests there is a wide gap between best and worst in class in terms of lender functionality"
APIs and digitisation are expected to transform the mortgage market, but intermediaries still want to see more real-time updates, the fifth annual intermediary mortgage survey from IRESS found.
The survey found that a third of lenders are in the process of implementing or are already accepting applications via APIs into their online intermediary platforms.
96% of lenders also believe that Open Banking technology will improve the mortgage application process for customers over the next two years, up from six in ten lenders last year.
Lenders believe that Open Banking technology will improve the process through the delivery of quicker, more accurate decisions, faster processing times and less requirement for documentation. Progress in this area is reflected in the fact that four new providers have signed up to the Open Banking initiative since the 2018 survey.
96% of lenders in the survey offer case tracking, up from eight in ten (80%) last year, and 65% now provide tracking in real-time. However, intermediaries continue to call for more real-time updates that also include progress with valuations and solicitors.
Based on intermediary comments, there still appears to be a high proportion of lenders in the wider market that do not provide real-time case tracking and many updates provided online, by email and SMS are not fully real-time or are inaccurate or include insufficient detail. As a result, phone calls to lenders by intermediaries looking for case updates remains high with 51% of intermediaries calling lenders four times or more per application and half of all calls (51%) are to obtain case updates.
Steve Carruthers, principal lending consultant at IRESS, commented: “Many lenders continue to invest in their portal technology and are seeing benefits in terms of frequency of calls from intermediaries falling and faster approval times. However, the research suggests there is a wide gap between best and worst in class in terms of lender functionality, with intermediaries still asking for easier and simpler navigation and phone calls for case updates remain high.
“Looking forward, digital advice is seen as a growing opportunity with more intermediaries and lenders now expecting it to offer a quicker, more efficient customer experience and help widen and increase distribution. Both intermediaries and lenders also believe that continued integration between intermediaries’ CRMs, sourcing systems/aggregators, lenders and third parties such as surveyors and solicitors will be central to the short-term shaping of the mortgage market. Generally, the market outlook is positive. Although Brexit continues to cause uncertainty, with two thirds of intermediaries thinking it could have a negative impact this year, less than a fifth have a negative view on mortgage growth in 2019; a third expect lending to increase and almost half expect it to remain the same.”
Robert Sinclair, chief executive at the Association of Mortgage Intermediaries, added: “The IRESS Intermediary Mortgage survey continues to lift the lid on the evolving use of technology in the market. This fifth report allows us to see the developing market in more context as lenders open up more gateways and information to help technology providers improve the broker and customer journey. It is clear from this year’s data that these developments will continue to accelerate over the next two years as consumer demand for quicker, smoother, more informed decisions and transactions are delivered into the property and mortgage markets. What will be critical is how well broker firms and lenders engage in investing in the emerging tech solutions in order to preserve their role at the heart of the transaction. Only by embracing these changes will the consumer trust the broker for help and advice.”