Buying a home doesn’t need to be a painful process. A new approach to the home buying journey will radically alter the mortgage process, delighting customers and providing opportunities for innovative providers to disrupt the market.
In a recent global survey by YouGov in May 2021, 75% of Britons surveyed who don’t have a property said they wanted to own a home. Unfortunately, completing the purchase of a new home today can be an expensive, long and - at times - stressful and inconvenient process for buyers; and an inefficient and labour intensive one for providers, who are also missing out on potential opportunities. However, we could be about to see the entire process being transformed, making it much simpler and convenient for buyers to obtain a mortgage and buy their new home. This vision for a radically transformed customer journey could be realised within the next couple of years, if providers make the right moves now around customer experience design, software platforms, open banking and cyber security.
This will make it possible for property transactions to be conducted 100% online, and every process in an innovative customer journey to be automated through open banking and application programming interfaces (APIs). Let me sketch out what this transformed journey could look like…
The property purchase of the future
The prospective buyer will engage with an estate agent digitally — on their mobile, website app, perhaps over social media such as Instagram, or instant messaging such as WhatsApp. The buyer won’t have to search for properties because algorithms will know what kind of properties would suit their needs and means, and recommend them. The buyer will view the property virtually, or make an appointment online to view it in person. The current costs for sellers will be reduced due to efficiencies that the estate agent will achieve and new business models for estate agents, such as earning referral fees from other stakeholders in the ecosystem, rather than commissions from sellers.
Once the buyer makes an offer, a highly automated process will be triggered that completes the entire sale and mortgage registration in days rather than weeks/months. A carefully crafted customer journey will make the mortgage application process seamless and engaging for the applicant, with the emphasis on guiding the customer through the journey (rather than today’s situation, where they have to find out themselves what to do at various stages in the process). The solicitors for both parties will be informed automatically and the necessary paperwork will be drafted using pre-set templates. Applications will be sent to multiple home loan providers through an integrated platform with the mortgage providers, and the buyer will be able to choose the best deal for them.
The land registry search will be conducted automatically through APIs; the buyer’s income and expenses will be verified through open banking; and the identities of the parties will be verified through integration with the relevant credit bureaus Once everything is in place, the conveyancers will be informed and transfer will automatically be lodged and finalised by the relevant authorities. For the buyer, this will be an engaging and frictionless experience; for the seller it will be quicker and cheaper; and for the providers it will be more efficient.
We’re already closer than you think
What may surprise you is that this vision is not science fiction: elements of this customer journey are in place today and more are on the horizon. However, it will take well-considered investment and planning for a provider in this ecosystem to put in place all the elements required to seize the opportunity to orchestrate this customer journey. Here’s what is needed to make the vision a reality — and to reap the benefits:
- A software platform, or set of integrated software solutions, will be required to co-ordinate and automate the steps in the process. It will require APIs that allow integration with the various data sources in the ecosystem to search and verify the data, notify stakeholders of progress and manage documentation.
- Customer experience design expertise will be central to craft a seamless, human-centred journey that removes all friction and optimises the customer experience. A great customer journey will ultimately increase revenue, improve retention, loyalty and engagement, and lower costs for providers.
- Open banking solutions that are supported by all stakeholders in the home-buying and mortgage ecosystem will be required. This will allow the necessary information to be passed between financial service providers to verify the buyer’s income and the affordability of the mortgage.
- Cyber security will be vital to protect the personal information of buyers and sellers, to prevent fraud and money laundering; and to protect the intellectual property of the providers.
- Compliance expertise will be required to make sure that the services and processes meet the requirements of the Financial Conduct Authority and other relevant regulatory obligations.
- Data that is accurate, complete and accessible will be needed – the whole process will not work if there is missing or low-quality data, or if it is stored in outdated systems and formats which cannot easily be accessed.
If mortgage providers address these key issues in a holistic and systematic way to craft a new customer journey for home buyers, there is an exciting future just over the horizon. Providers who get this new journey right can look forward to highly engaged and satisfied customers, and a compelling competitive advantage.
Discover more about how we can help you transform the mortgage journey and experience for your customers:
Sarah Green
Client Partner Mortgages at Capita
Sarah has joined as a client partner, with responsibility for our key mortgage clients, along with leading our growth focus in the mortgage business. Sarah has over 20 years’ experience in the mortgage and financial services outsourcing industry, across both growth, operations and technology. Having previously worked for Homeloan Management (now Computershare), Capita Mortgages and Sutherland Global and in more recent roles, Sarah has focussed on Digital Transformation and Customer experience, bringing well rounded experience for our mortgage proposition.
