Time for review: mortgage sales practices

The FSA’s mortgage market review guidelines pose a number of issues for retail banks in the UK, and are set to have significant impact on the way mortgages are bought and sold here. Although new regulations can often add additional pressures within the industry, anything that can reduce liabilities without imposing onerous costs ought to be welcomed. As mortgages are a key part of people’s personal financial planning, with genuine significance to the wider economy, it is arguably more important to safeguard this process against improper sales techniques than to do so with any other financial product.

However, with most mortgage advice dispensed by advisors in-branch, this leaves a serious issue of how to ensure that the right questions are asked, and the right processes and background checks are adhered to, while making sure that the process remains as efficient as possible. Financial services advisors based in the contact centre have long had to remain conscious of the fact that their conversations will be recorded and analysed automatically, and that they may be questioned if such examination reveals that they did not follow the procedures correctly. Some managers might shy away from the thought of recording face-to-face conversations, but there is no reason why it shouldn’t quickly become commonplace in the branch environment. In an instant, this would vastly reduce the sort of ‘he said, she said’ arguments that arise when customers claim that they have been mis-sold products or it is found they are unable to afford the mortgages given to them. Proper recording and analytics can ensure that the rights of customers remain protected, while the bank is safeguarded from spurious claims.

Five years ago, this would have been something of a technological challenge, and would have taken significant human resources to administrate. Now, however, the capture, storage and automated analytics equipment necessary is widely available, and can be operated and used without frequent recourse to specialist staff. Desktop process analytics can keep track of the  visual elements of the mortgage advice process, and automated voice analytics can scan recorded conversations to check for statutorily required statements, meaning that human analysis is only required when impropriety is already suspected.

In the specific case of mortgages, which demand a complex and lengthy approval process, these technologies can  be integrated with a workforce management system to map out the process and give end-to-end visibility of the entire customer  journey, along with the capabilities and aptitudes of the staff involved at each stage. In fact, the advantages gained from implementing such technology and using it properly mean that the capital and ongoing costs are significantly offset by the potential savings, not just in reduced liabilities but also in the potential streamlining of business processes. With the FSA’s new guidelines changing the requirements for all retail banks, now could well be the time to think differently about using in-branch analytics for compliance purposes.