Mortgage advisers must modernise and professionalise their work, and technology is the answer – but choosing a solution can be challenging
Make no mistake, change is coming to the mortgage industry. What has been a slow drip in recent years will very soon turn into a tidal wave, and technology will transform the world of mortgages.
It is important that advisers get on board, otherwise they face being left behind. There are significant threats on the horizon in 2020 in the form of robo-advice platforms, a planned return to execution-only transactions, price comparison sites, and growing product transfer volumes bringing a threat from lenders too.
The solution in each case is technology, but choosing the right way to embrace technology can be difficult, and many firms face the choice between building their own bespoke system or buying a ready-made and externally managed solution.
There is no universally correct answer to this, as the right answer depends on a variety of factors, including employee numbers, client base and budget.
Finding that answer is crucial, though, as there are opportunities aplenty for those who act fast. Automated processes, direct-to-lender application submission, and automated client contact and retention all give advisers more time to spend growing their business instead of doing laborious admin. Advisers must streamline and professionalise their work, and tech is the only way to go.
That brings us to the different options advisers have to choose from when looking to introduce technology to their business.
Build your own
For big firms, building a bespoke mortgage system may well be the best way to go. Mortgage businesses with 100 advisers or more have significantly more resources to invest in the design, creation and implementation of a technological solution that is perfectly tailored to their operations. It is important to understand that an adequate system is not just a package of loosely connected pieces of software – this may have worked in the past, but it doesn’t cut it anymore and won’t give firms of all sizes the competitive advantages they need.
Full bespoke systems take time and money. Just one vital element, ISO accreditation for example, can take from six to 12 months and is incredibly costly. And there are many different parts which all require this level of resource to develop and then integrate together. Overall, you could expect to spend upwards of £10m on developing a bespoke system from start to finish.
Add to that the fact that there is no prospect of making money from this self-built platform beyond the business improvements it will bring. That leaves firms facing an outlay of millions for benefits that will only come to make a difference to their bottom line after several years, if not longer.
Scalability is crucial
While many smaller firms may use their own unsophisticated solutions for different parts of the mortgage application, this won’t deliver the benefits and improvements that advisers need to make sure they protect their market position. Advisers need something scalable that supports their ambitions for growth, something that their customers can interact with simply and easily, and that has connections with other key stakeholders across the application process.
A slick user experience is particularly vital, but it’s also something that requires an awful lot of investment to achieve. Throw data security and GDPR into the mix, and the importance of a verified, accredited system that hasn’t cost your business millions to develop only grows.
Boiling this down into its most simple terms, an adviser’s most valuable asset is time. Efficiency is crucial to success, and the vast majority of firms simply don’t have the time or funds to develop a bespoke mortgage system. That’s where external systems can work.
In fact, external solutions are maintained and updated regularly, providing new benefits and remedying issues to deliver weekly improvements. Buying an externally built solution means that advisers can reap all the rewards and take on none of the responsibility, with the only expenditure being a small, monthly licence fee, which gives the flexibility to cancel at any time, and without the prospect of writing off a multimillion-pound investment. And that’s what nearly every business in every industry around the world does – they buy the best because it makes the most sense for their bottom line and for the time they have to spare.