The shifting lending tech landscape

Melanie Spencer, Business Partnership and Growth Director at One Mortgage System (OMS) —

Historically, the lending community has always faced a huge number and variety of challenges. These have been exacerbated over the past 12 to 18 months in the wake of some extremely turbulent economic conditions which have led to the Bank of England battling inflation through a series of base rate rises. Alongside some wild swap rate swings and subsequent hike in mortgage rates, these factors have inevitably impacted affordability, attitudes to risk and the volume of transactions across the housing and mortgage markets.

Looking at this from a slightly different angle, it’s also a time when lenders have had the opportunity to really hone their service, systems and processes following a sustained period where they were inundated with business whilst still dealing with the aftermath of the pandemic.

The importance and influence of technology is nothing new to lenders big or small, old or new. Although, it’s fair to say that some of the more traditional lending institutions have had to take a slightly different approach when it comes to overcoming longstanding legacy issues.

It’s also prudent to point out that these legacy systems may have only been provided by one or two large firms which dominated this area of the industry in times gone by. Thankfully, we are now operating in a far different marketplace with lenders now able to pick and choose from an abundance of tech providers without necessarily having to wait months, or even years, to implement change and being forced to pay through the nose for the privilege, even for the smallest of tweaks. This can impact upon their speed to market regarding new products or criteria. All of which makes the improvement process all the more painful and costly for those legacy systems built within such rigid frameworks.

As an industry, we have taken massive forward strides over the past decade. For example, new technology has resulted in faster processing times, opened the doors to more comprehensive affordability and credit checks in half the time and greatly improved the customer experience from an accuracy, speed and service perspective across purchase and remortgage business. Features which represent a win-win for both the customer and the lender.

By embracing technology, we have been able to attract new lender entrants across the market to deliver far slicker, more agile and increasing user friendly systems which also have to ability to develop new features, products, criteria and incorporate bolt-on functionality. Meaning they can integrate future change, at pace, rather than be stuck trying to navigate their way around archaic back office barriers.

These entrants have brought fresh dynamism, helping to spawn a new age of tech provider and created more innovative avenues on which systems can be developed and integrated from both a lending and intermediary perspective. They have also generated opportunities for those tech providers with extensive market, as well as tech, expertise to support them earlier in their journey as a new business and/or into new markets. Often by helping to identify how front and back-end systems should perform, delivering a cohesive solution via a shared vision and creating a long-term partnership which can shape their future performance. After all, customer behaviour is constantly changing, especially post-pandemic, and intuitive technology platforms can help lenders adapt accordingly.

Having recently been chosen to provide a set of advanced, fully customised solutions for lenders such as MFS and MT Finance, this demonstrates how such partnerships can help lenders transition into new markets. And how important it is for tech providers to understand specific requirements and accurately deliver solutions which match and even exceed these ongoing needs.

Better servicing the needs of borrowers and the intermediary market will always be an ongoing quest for lenders, but forging more transformative and collaborative tech partnerships represent an important step in making this happen now, and in the future.

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