The future of sourcing

Knowledge Bank has become the go to Criteria Search service for thousands of UK Mortgage Brokers and it is an essential tool when trying to place trickier cases. We’re pleased to be one of the more than 250 lenders which now share our criteria and rates with Knowledge Bank and I’m delighted that founder and CEO Nicola Firth has joined us as a Mortgage Visionary, sharing her views on why criteria and rate based search systems can help brokers #DeleteTheSpreadsheet once and for all.

Nicola Firth was a mortgage broker for 13 years and had her own brokerage for seven years. Frustration when placing cases led her to found Knowledge Bank, the UK’s first criteria search system. After 18 months developing and testing, Knowledge Bank launched in September 2017 and grew quickly. It now holds almost 130,000 different criteria, from 250+ lenders, across different lending types including Residential, Buy to Let, Second Charge, Equity Release, Self-Build, Overseas, Bridging and Commercial. Knowledge Bank enables brokers to search unlimited criteria and save results and, for the very first time, provide evidence of research on criteria. The system is used widely throughout the intermediary mortgage industry by brokers, networks and clubs.

The FCA have put a lot of focus on selecting the cheapest product for the customer, but this isn’t always possible or the best option in all circumstances. It has also become increasingly difficult to find the ‘cheapest’ deals as “vanilla” cases are seen less and less frequently. The focus now needs to be on finding the cheapest product possible for the customer but with a regard for what their realistic options are based on their criteria.

Traditional product sourcing systems have always had some criteria filters, but not in the granular detail brokers now need to enable them to place more complex cases. For example, whilst most systems allow brokers to search on a generic filter for CCJs, more sophisticated sourcing systems can now let brokers input information of how many CCJs the customer has, what amounts they are for, the dates that they were registered, etc. to help them zero in on realistic options from the beginning.

Knowledge Bank was the first Criteria System to enter the market in September 2017, recognising the need for a more succinct and reliable approach to sourcing based on lending policy before interest rates. Since then, other entrants have entered the space and have finally banished the outdated and time consuming “spreadsheet” or “lending matrices” from the industry for good.

This approach has now taken a step further as criteria and product sourcing has joined forces. Knowledge Bank and Iress now offer a fully integrated solution to allow brokers to accurately source a lender and subsequently a product based on a customer’s circumstances.

At Knowledge Bank, we worked closely with the FCA on the development of the tool and crucially the “Evidence of Research” because we believed this was key to giving the broker a robust file if it came to a compliance audit. The FCA say you have to “evidence your research” and up to this point, the industry has taken this to mean keep a copy of your product sourcing results. But where it hasn’t been possible to select the cheapest rate for the customer this only tells a small part of the story. This, coupled with Criteria Search results shows the full picture. Namely that on this day, at this time, this was the lender’s criteria and what the REAL options were for the customer and why that product/rate was then recommended.

Larger broker firms and some networks are already adopting Criteria System “Evidence of Research” as part of their compliance requirements so that there can be no doubt why a particular lender and product was chosen should a complaint ever arise.

Non-interest rate sourcing has also been massively beneficial for the specialist lenders who, purely by their nature, would never appear at the top of the product sourcing tables. With Criteria Systems they get the exposure they deserve for the great work they do in serving a traditionally underserved and growing part of the market. Brokers are more easily able to find suitable homes for their cases and in less time, which can be critical on some occasions.

The other advantage of taking criteria from spreadsheets and deploying it via technology is that for the very first time, insights are available into just what kind of cases brokers are trying to place. Before, it was only ever possible to look at completions data, but this was only ever part of the story. By being able to see in “real-time” what brokers are searching for, lenders are now able to better understand the market which in turn enables them to tailor or promote their offering to match demand.

Knowledge Bank now holds and analyses a huge amount of useful data which we’re happy to share with the market and we publish the monthly trends report which gets picked up across the trade press in our Criteria Activity Tracker. These insights tell an interesting story of what is happening in the market right now and often sign post what we can expect in the near future. everyday services in the most effective ways.