Digitalisation of the UK mortgage market could benefit homebuyers and property investors taking out mortgages. How can technology transform the sector moving forward?
Working on streamlining the property industry, including the mortgage process, could make it easier for all parties involved and improve the entire buying experience. The UK mortgage market in particular has been slow to implement technology and digitalisation.
Richard Hayes, CEO and co-founder of the free online mortgage broker Mojo Mortgages, explains why the mortgage market has been slow to digitalise, what kinds of improvements need to be made and the benefits that could come with that.
He says: “Attitudes towards technology within the mortgage market has always fared way behind other sectors, when compared with both financial services and externally such as with retail or e-commerce.”
One of the main reasons for this slow uptake is due to the complex nature of mortgage products. There are particular challenges when it comes to it comes to digitising the advice process between customers and brokers.
Prior to the COVID-19 pandemic, face-to-face was the main mode of communication in the mortgage market. However, this has changed drastically in the past year and a half. Many lenders have improved digitalisation and automation where possible and made improvements to lending policies and applications.
While largely necessary to keep the market open during the pandemic, these changes allowed for a more digitally-focused application process. In particular, this made it easier for customers with more complex circumstances, including self-employed workers or zero-hour contractors. Technology allowed them to complete key application components online, such as income verification.
Embracing technology and focusing on transparency
These recent digital changes have brought a number of benefits for lenders, brokers and borrowers. “It will be interesting to see how this momentum is maintained in the coming months as restrictions lift and physical meetings return, however it’s clear that the demand for a more digital-focused journey is there,” Richard Hayes comments.
Embracing technology and digital tools is the way forward for the UK mortgage market. Tech can help improve affordability checks, reduce paper-led admin and cut inefficiencies. Additionally, online communication, digital application tracking, interactive calculators, online fact finds and open banking are all ways to improve the sector and make the mortgage process more efficient.
Moving forward, transparency will be particularly key as the sector digitalises. Adopting technology in the right way can allow all parties to remain connected and supported throughout the mortgage journey.
The CEO of Mojo Mortgages states: “More transparency is key to improving overall customer confidence, and this will only be possible with better connectivity and more flexible mortgage products to cater for an ever-evolving customer base.”
Improving the customer experience
Mortgage borrowing can be confusing for buyers and investors. However, knowledge has been improving and will likely improve further with the digitalisation of the sector. Additionally, technology in the mortgage market could help smooth out and speed up the entire homebuying process. It could also lead to happier customers and allow them to make more informed decisions about their mortgage.
“Digital avenues to mortgage advice are now empowering customers to delve deeper into the application process, gain a better understanding of lender criteria and ultimately feel more confident in the deal presented to them by a broker,” Richard Hayes says.
“Transparency, speed, and more end-to-end digital journeys will make for far less disparate customer experiences – though that’s not to say each customer’s mortgage application process will be bespoke to them.”
Mojo Mortgages provides personalised mortgage recommendations through a hybrid of human mortgage experts and smart tech. RVU, owners of Money.co.uk, Uswitch and Confused.com recently agreed to acquire the online mortgage broker. This could help them supercharge the mortgage application process and deliver end to end digital mortgage advice.
It’s important for the UK mortgage market to maintain the momentum already created during COVID-19 to transform the sector permanently. Mojo Mortgages feels there is a willingness to adopt a “tech-first approach” across the mainstream market.