When ‘Fintech’ is bad tech

Buster Tolfree, Commercial Director – Mortgages

Technology has become an integral part of the service offering of most mortgage lenders and UTB’s broker portal is no exception.

Paper based mortgage and second charge applications are becoming extinct but if conversations with many brokers are anything to go by, some of the ‘fintech’ intended to replace the dinosaurs is just as much of a barrier to business.

When UTB launched into the second charge mortgage market we had a very strong idea of what we wanted our technology to do for brokers and, perhaps more importantly, what we didn’t want it to do.

Problems with online application systems and broker facing portals can be serious issues for intermediaries who use them every day. In recent months, articles in various publications have looked at the topic and reached roughly the same conclusion. The offenders ask too many questions and want too much information from the outset. Hang on! Shouldn’t lenders be asking lots of questions? Isn’t it that kind of laissez-faire attitude which got us into the credit crunch 10 years ago?

Well, yes and no. Yes, lenders should be asking the important questions as soon as possible. There’s no point wasting a customer’s, broker’s or underwriter’s time if the borrower doesn’t have a hope of being accepted. That’s just good practice when lending money to anyone. However, using a broker’s time to gather and then input incidental information which has no bearing on affordability, such as employer contact details or the property’s past purchase price and time at address, all information which can be found by the lender on other sources during underwriting, isn’t going to win you any fans and makes no difference to the quality of the lending decision.

[color_quote]It’s very easy when designing an online system to think – ‘well if we’re asking that, let’s ask this too. It’ll save us as the lender doing it later!’. Companies which offer a service like that aren’t really thinking about their broker customers, they’re thinking about their own efficiencies.[/color_quote]

We designed and built our own online system from scratch rather than buying an off the peg solution and I believe that has paid dividends. Sometimes with an all singing all dancing system, there are so many options built in it’s just too easy to say ‘yes let’s switch absolutely everything on’. Our starting point was to imagine the brokers who would be using the online portal as customers, rather than just the person responsible for feeding us information about the customer. As such we decided very deliberately not to go the whole hog on capturing lots and lots of information at that point, and instead we just ask for what we need to get back to the broker quickly with a decision. Once accepted via the portal, a mandated underwriter is assigned the case and take care of gathering any other information we need to be able to issue an offer, often from sources like Land Registry or Equifax. Our portal only requests from a broker what we need to move into formal underwriting and that means a more efficient and productive use of an adviser’s time. They can hand over to our underwriters to do what they are best at and the broker can get back to helping their next customer.

So, what of the future? There’s no argument that technology has transformed the mortgage industry but there are still plenty of new developments and benefits to come. Many of the larger brokers have their own application systems and being able to integrate those with lenders’ systems to avoid time consuming rekeying of information is vitally important. There’s also an opportunity for lenders to share the benefits of the systems they use. For example, our next development is the integration of Equifax into our broker portal enabling brokers to have access to the same credit scoring information and making the application process even quicker and easier. It’s also a personal goal of mine to introduce a straight through, start to finish online mortgage process, but at the moment this depends on other important parties overcoming an aversion to digital signatures (yes, I mean you Land Registry!).

[pull_quote]However, whatever ‘fintech’ UTB develops in the future, you can rest assured it will always be to help our broker partners, not to hinder them purely to make our life easier.[/pull_quote]