Metrics Monthly | October 2020 | AU Edition

Portal power

David Wylie, Director of LendingMetrics, says too many mortgage lenders are failing to automate their decision making, even though it is key to winning leads from internet portals

The procedure that underpins the under- writing of mortgage business in the UK has essentially remained unchanged for the past 25-or-so years. It is a seemingly age-old scenario, and one familiar to everyone in the industry: a client wants a mortgage, and the race is on to obtain a decision-in-principle, once an appropriate product has been selected. Using sourcing tools, brokers match their client to the published lender cri- teria to get a swift decision-in-principle that ensures the client does not go else- where, or their lead goes cold. In essence, this results in a rushed and far-from-ideal process. The client may have been less than totally straightfor- ward transparent about their circum-

stances at the outset, so, when the paperwork is finally in, and the manual underwriters get to work on the applica- tion, the product may not fit after all. Another product has to be found and the process starts again, and if that replacement product also does not work, the whole effort proves to be a waste of the broker’s (and lender’s) time. The nature of decisions made in this way are that, by necessity, they are pretty generic, de-personalised, and non-binding. They give only the illusion of a proper decision to the borrower. A decade ago, this was the way it was because technology would support nothing else. We were living in a world of fax machines and emails. However,

we now live in a world where there is widespread availability of real-time data on most things you care to mention, and we all know we have instant access to real time bank transaction data via Open Banking. This should have made the time-consuming process I have out- lined above obsolete. But it hasn’t. In too many lenders the familiar and outdated process is still there in the background. A legacy system that will just not go away. Admittedly, there have been some lenders who have moved forward on this - Skipton announced it was using Open Banking earlier in the year - but there have not been many. The problem with this slow level of take-up is that it is leaving the industry

10 | Metrics Monthly

October 2020 | AU Edition

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