I recently took part in a session at the UK Finance Annual Mortgage Conference on technology in the mortgage space. In the first of two blogs, I’m going to explore how technology plays a big role in customers’ experience and their journeys by answering questions that came up during the session.
Of the UK’s 67 million population, 65% are homeowners. Ninety-six percent of UK households have access to the internet, and 76% of people who have a bank account have internet banking.
Technology is enabling completely new customer journeys and the mortgage world is no exception. AI has grown considerably over the past few years – not to replace human involvement, but to compliment interactions and help lenders, customers and regulators make the right decisions.
How can we be more ambitious with tech in the mortgage space?
Robotic process automation (RPA) has been spoken about for as long as 15 years now, and we’ve seen that it can replace a lot of the manual repetitive activities. In particular, it could play a big part in re-mortgaging, using the data available to help make calculations and draw conclusions.
While technologies such as RPA and optical character recognition (OCR) scanning are a useful bridge between traditional processes and digital ones, better use of data allied with AI could truly transform the home-buying journey by dramatically reducing the timescales and effort involved. Better insights into customer circumstances and preferences will help deliver the right product and foster deeper relationships even in today’s challenging environment.
And we could get even more ambitious still. What about using geo-location services to link homebuyers to products and services which are tailored to their individual needs, providing a one-stop-shop to bring together all elements of the home buying journey? Local removals, broadband providers, utilities review, postal redirects, and so on. This would really help to streamline the journey for customers and the great news is that this technology is available now – we just need to find the best way to adopt it.
Can OCR work yet, given the variability in data layouts and naming for things like payslips?
OCR scanning and indexing takes away the need to use so much paper while remaining secure, and there have also been many advances in property intelligence: we have a wealth of data now, in terms of when our properties were built, how much they’re worth, other important information such as on cladding.
OCR itself is evolving – whereas traditionally it relied on fixed positioning of data on a document, which made it hard to handle multiple formats, modern OCR has the ability to identify key words regardless of where they appear on the page. With technology also able to check document authenticity and perform sanity checks on the data extracted, this greatly enhances the usability and has the opportunity to streamline the home buying journey.
How can we get full adoption of digital signatures?
Digital signatures are another technology that is available now, but full adoption – all the way from the public, broker, lender, surveyors, conveyancers and the land register – is only likely to come once a suitable framework and set of standards is agreed across the mortgage industry. The framework should enable different identity providers to compete and innovate within the agreed terms in order to maintain a healthy eco-system. As ever, it is important to consider all user requirements: manual signatures may well remain the preference for some parties in the near to medium term.
How likely is it that the industry alone can drive critical mass adoption of property passports without regulation?
There are a number of private and industry initiatives looking at property passport solutions, with genuine sentiment to address the lengthy timeframes involved, which often leads to high drop-out rates. This may mean that regulation is not required, unlike with open banking (which I talk about below), where market competition required stimulation. The Government is likely to have a role to play in this, too, whether through legislation or general support.
How can we increase trust of open banking within intermediary market?
Despite a relatively slow start, some five million users in the UK now use open banking to access products and services more quickly and accurately. Many of these users may not even realise that they are using open banking, for example to initiate buy now, pay later (BNPL) payments for online retail or to perform a health-check on their finances; further education is clearly needed. Even as the technology matures, the basic principle of being able to demonstrate the value exchange for each use case is paramount to get customer buy-in.
Can open banking be utilised not only in new lending areas but also back-end areas?
Open banking can be used wherever a credit decision is required – not only in lending but yes, potentially for back-end areas, such as credit management and mortgage arrears teams. It can be particularly useful for arrears cases, where a customer may feel embarrassed to discuss their financial position but would share the data to help establish a repayment plan and/or help identify other areas of spending that could be reduced. The speed and accuracy that can be achieved compared to more traditional assessment methods means that the customer is less likely to be exposed to arrears fees and charges.
The key to all this is that we must make sure we bring the right technology in at the right time, and that we standardise it in a way that benefits all stakeholders across the mortgage-buying process.
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.
