Consumer driven technology adoption driving innovation in mortgage technology

Consumer driven technology adoption is driving many of the changes we are seeing in the mortgage market, influencing lenders and mortgage intermediaries. 

In the 2018 Intermediary Mortgage Survey I conducted recently, it is clear from this year’s survey responses that technology is becoming increasingly central to intermediaries’ and lenders’ thinking, with mentions of big data, artificial intelligence, chatbots, blockchain, digital brokers, mobile apps, open banking and the API economy more prevalent than previous years. Although both intermediaries and lenders show some level of cautious optimism about the potential of digital within the mortgage market, many do not expect huge change to arrive for another one to two years.  

The adoption by consumers of mobile technology for banking, payments, online shopping and research is driving mortgage lenders and intermediaries to invest in both mobile technology and associated so called fintech developments including artificial intelligence and machine learning. The US is ahead in this space but UK lenders are looking to utilise these emerging technologies to reduce friction in the mortgage application process and increase digital direct interaction with consumers and intermediaries. 

Looking ahead, many lenders see elements of robo-advice technology enhancing sales channels and benefiting the consumer, whereas intermediaries have concerns over the technology being fit for purpose. Lenders see the possibilities of open banking as a benefit in mortgage originations, but expect gaining consumer trust will take time. In addition, nearly half of lenders (44%) think APIs (application programming interfaces, which allow different online systems to link together) will open up opportunities in the mortgage market, a view shared by a number of intermediaries.

If consumers accept sharing financial data through open-banking, paper forms to prove income and expenditure will become a thing of the past and help reduce time to obtain an offer and buying a house. 

There is natural tension between robo-advice technology and the traditional intermediary sales process, but both lenders and intermediaries are beginning to realise that consumers want to interact in a style they are used to in their digital lives. Automated or robo-advice technologies are being adapted to provide a hybrid solution, using technology to do the heavy lifting and allowing intermediaries to provide the added value of their experience and knowledge rather than form filling.