If mortgage lenders want to put in place a flexible, long-term ESIS solution to meet the Mortgage Credit Directive deadline of March 2019 they need to start planning now.
With inevitable future changes in mortgage documentation, Capita explores the options for an adaptable solution that can evolve to meet future requirements.
Some UK lenders are already fully ESIS compliant due to changes in their regulatory permissions or because they were new entrants to the UK lending market. Others have chosen to do so as part of scheduled change programmes or following the lead set by their European ‘parent’ institutions. However, most UK lenders are still some way off compliance.
There are several routes that lenders are considering, including relying on their current provider to deliver a solution. This route assumes that current suppliers have the appetite, resource capacity, time and budget for such a change. Others may be considering building their own bolt on solution, which requires detailed knowledge of systems and interfaces, and how they would work with in-house legacy systems and data stores. Many will not have the capacity or regulatory knowledge to be able to carry out this work themselves.
This is where it may be useful for lenders to turn to specialists for support, but small software houses with the right skills are both rare and in high demand. Engaging large and established software providers is perhaps the easiest route, however it is essential for lenders to consider contractors’ track records of delivery, and their breadth of industry experience.
An ideal solution should consider future planning, in that it should be flexible, allow in-house edits and amendments to texts and paragraphs without the need for change requests to their IT providers.
Mortgage lenders have a short timeframe in which to act if they are to implement a robust ESIS solution in time. The mortgage market has evolved significantly in the last 30 years and an adaptable and flexible solution will not only meet the immediate regulatory demands for customer documentation but also the inevitable future changes within the market.
Author: Keith Green, Strategic Product Director at Capita Mortgage Software Solutions
Find us at the CML MortgageTech UK 2017 event on 27 June at ILEC Conference Centre, London