Lending Zone: A smooth finish

28 August 2015

An online search, a phone call, then a mortgage offer: a smooth customer journey has never been more important, says Chris Thompson, Chief Executive Officer at Capita Mortgage Software Solutions. 

As more customers become tech-savvy, the process of mortgage origination is changing. A typical customer will first research mortgage providers online before making an online enquiry with their provider of choice.

Unless an execution-only route is selected, this is then followed by a phone call with an adviser and, subject to acceptance criteria being met, the mortgage is offered and agreed.

A smooth customer journey has never been more important, and now is the time for lenders to make sure they get it right.

The landscape for mortgage origination

Recent figures from the Council of Mortgage Lenders (CML) have shown there is increasing market demand for new mortgages - the number of mortgages to first-time buyers rose by 7 per cent in June 2014 compared with May and is 19 per cent higher than June 2013. The Bank of England also reported that gross UK mortgage lending reached £19.1bn in June 2014, a 15 per cent increase compared with the £16.7bn lent in July 2013 and the highest monthly total since August 2008. Those lenders that get the mortgage origination process right will realise the benefits of this level of demand.

Lenders are now faced with the need to deliver a more in-depth advice process, so the customer experience is paramount. Recent regulatory changes have rightly placed a renewed focus on the importance of affordability assessments and on having detailed conversations with borrowers to ensure the mortgage meets each customer’s specific needs. Qualified mortgage advisers must deliver this advice and be able to demonstrate compliance with Mortgage Market Review guidelines throughout.

As a result, the advice process from initial enquiry through to mortgage approval can take anything up to two hours or more. It is not surprising therefore that some customers may be lost along the way. This makes it essential to attract as many people as possible into the process. Key to this is the existence of a user-friendly website with easy-to-understand information readily available.

Getting the most out of technology

The role of technology in ensuring a positive customer experience should not be underestimated. The more information that can be gleaned about a customer in the initial enquiry stage – a step that is often web-based – the more seamless, streamlined and speedy the process of telephone advice can be. The mortgage origination technology used by the mortgage adviser also plays a big part.

We have witnessed lenders turning to outsourcing technology to achieve efficient processing of all types of financial products from initial enquiry to release of funds. Mortgage origination systems can help advisers demonstrate compliance with regulations throughout the advice process by logging the necessary information and formulating reports.

Technology can also assist with affordability checks to ensure the adviser is confident in their decision that the customer has a mortgage they can maintain. It can also log information to provide evidence for this.

By reducing the administrative burden of regulation, it leaves the adviser with more time to do what they do best. This is, of course, delivering mortgage advice and matching clients to the right mortgages for their individual needs.

Automated systems also help to guide advisers and their clients through the mortgage origination stages, eliminating any unnecessary paperwork, simplifying the process of delivering advice and often reducing the time needed.

As regulations evolve and new requirements are introduced, technology needs to adapt to suit this. By outsourcing their technology requirements, lenders can reduce the expensive costs associated with regulatory change.

Lenders using outsourced systems can also access user groups, enabling them to share industry issues and market challenges with other lenders.

Be efficient, clear and well-advised

To put it simply, the mortgage origination process needs to be efficient, clear and well-advised. The website viewed by the customer needs to be easy to use and the call-back the customer receives needs to be as efficient as possible.

Lenders must focus on how to ensure as many potential customers as possible complete the mortgage origination journey through to release of funds. From our experience, if effective technology is in place, the customer is more likely to have a positive journey from the initial web search for mortgage providers through to the more detailed review of the lender of choice’s website and then finally the advised phone conversation.