The journey to develop the frictionless mortgage involves digitising and streamlining every step in the process. However, the identity and address verification process has stubbornly resisted the march of technology so far, with many processes still delivered by the client submitting physical and original documentation to the broker or lender.
The importance of ID verification is obvious – brokers are liable if fraudulent activity occurs as part of a mortgage transaction. This can come in a few different forms, from deliberate misrepresentation of income or the property value through to organised crime syndicates overvaluing properties, using false identities and then failing to make mortgage payments.
Robust ID and address verification processes are vital – but that doesn’t mean they cannot also be digital. Working with physical documents adds unnecessary time and work to the mortgage process for borrowers, brokers and lenders alike (and is still susceptible to fraud).
Technology can streamline the process while still meeting the compliance and security standards demanded by lenders. Smartr365 is currently the only technology provider doing this as part of a strategy to deliver the frictionless mortgage from end-to-end. Other providers are only looking at individual components of the mortgage journey, and many are viewing lender APIs as the answer.
At Smartr365, we’re looking at the process as a whole, using technology to update the way ID and address verification is done, and automating this process to make it as frictionless as possible for lenders, brokers, and borrowers.
The key to adoption of this technological advancement is industry acceptance of the compliance implications of a digitised and automated ID and address verification process, as well as a commonly approved standard agreed by the sector. Brokers are the first line of defence in underwriting and vigilance, and significant responsibility rests with intermediaries to conduct adequate checks. Even though a lender will conduct its own checks, brokers must still ensure they have been vigilant – if a case goes wrong, the lender may hold the broker liable. If broker checks were not of a sufficient standard, they will draw censure – but if the checks were proven to be adequate, brokers are protected.
The next step is the adoption of an industry-wide standard for online ID and address verification. We are working closely with lenders to gain endorsement of the way Smartr365 carries this out. We will then make this universally available to help lenders and brokers update their processes.
If we can successfully make ID and address verification frictionless and digital, it will unlock a truly end-to-end frictionless mortgage process. Other elements are more easily transferred online, but these advancements are limited if they are deployed in isolation. There’s no point speeding up other (less time-consuming) parts of the process, only for ID verification to hold us back.
The Smartr365 team is currently working to make this a reality – so watch this space for more progress!