Will COVID-19 drive mortgage transformation up a gear?
Pradeep Raman, Burrow: the market needs to step up its efforts to better engage borrowers on their mortgage options
At the time of writing this article we have seen a whirlwind of activity play out in the UK mortgage industry. Like other sectors, the mortgage market has had to adapt to sudden change, both on an operational and customer level.
The Association of Mortgage Intermediaries (AMI) indicates that roughly 75% of UK mortgage lending, originates via an intermediary. Now more than ever, mortgage brokers play an important role to provide the answers that many lenders are struggling to offer amidst the operational challenges.
Collaboration across the industry has meant borrowers have continued to receive support to keep the market moving. Which has got me thinking, why has it taken a global pandemic to highlight why we need to accelerate transformation in the market?
Borrowers need access to advice outside of working hours
The Bank of England base rate has reached an all-time low, three month mortgage payment holidays amongst other support activity have been made available and housing purchase volumes are down as result of the lockdown.
COVID-19 has brought many challenges, with lender resource being re-allocated to support operational capacity and reduced service hours means that borrowers need to speak to advisers outside of a nine to five working day, leaving them to turn to online resources.
Greater online support is needed
There is need for better support tools to help borrowers understand their mortgage options. Such tools are needed before the advice or application takes place. Lockdown has highlighted that many borrowers need answers in real-time even if it’s just to understand their options before speaking to an adviser.
Cloud hosted solutions offer greater agility
UK Finance have cited that one in seven borrowers took a payment holiday on their mortgage. As result, lending institutions have been working to service payment holiday requests whilst protecting their workforce in times where social distancing is the new norm. Couple that with legacy systems and infrastructure, it has been an awakening for many institutions as the broader challenges play out.
Aside from payment holidays and the purchase slowdown, there is still a need to service existing borrowers to remortgage or switch to a new mortgage deal. Yet with increased demand for advice this is proving challenging for borrowers to access the right information at the right time.
In today’s remote-working world, cloud-hosted solutions that can enable customers to understand their mortgage options, means that lenders or intermediaries can identify and differentiate between those looking to research mortgage options and those wanting to act.
A blend of digital and human advice to increase efficiency and engagement
By adopting technology that will enable advisers to rank, pre-qualify and identify customer needs, means they have a rich understanding of customer information before a conversation takes place. These rich sources of data will better inform business decisions and remove the need to rekey information which in turn reduces appointment times. It’s that tailored engagement that will stand out for customers at a time where they are being turned away or failing to get access to the sound advice they need.
For customers with limited or no product options, digital customer on-boarding solutions enable the mortgage market to keep these customers engaged and the pipeline warm until stability and some sort of normal returns.
How customers are supported in a downturn will benefit financial institutions and brokers in the good times. With uncertainty of how long it will take to return to a state of normality, the market needs to step up its efforts to better engage borrowers on their mortgage options.
For more information on plug and play, digital customer on-boarding solutions, visit www.letsburrow.com.
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