Technology in the mortgage market is “really fragmented”, with a “range of software systems, a range of CRM providers and lots of lenders with different processes and different portals”, but brokers will increasingly demand systems that are more slick.
Speaking at The Specialist Lending Event, Matt Mawdesley, CEO and co-founder of Morpheus Lending, said: “There is no one source of truth. I think you add into that the fact that most brokerage firms, they don’t have their own technology team, therefore they can’t help build into these environments, so I think we’ve ended up with a bit of a mixture of different platforms all trying to do a bit of the same thing with not enough communal overlap. I think that is an issue that we all have to face,” he said.
“What you don’t want to do as a broker is go and integrate into 15 different platforms, you want that to be the path of least resistance, so that’s a challenge that we collectively need to face…
“I don’t think there’s an easy answer and I don’t think there’s one golden bullet that fixes all of that, but I think starting to work with lenders who are focusing their investment on technology is the way that brokers will go in the future,” he said.
Mawdesley said that “more and more, as we go forwards, customers and brokers will demand a better experience and a simpler process. What they will not do is go to those legacy lenders who have still got paper-based and Excel processes with different logins where you get kicked out of a system and you’ve got to go back in and rekey. I think those days are starting to disappear.”
As a new lender to the market, he said it had spent 15 months building its platform, and while it could have launched quicker with a paper-based process, “we didn’t want to do that”.
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“I think as long as we as a lender can get the price and the product right, then we will win because of the technology, and I think other lenders will have to catch up. The beauty that we’ve got is starting from scratch, so that makes things a lot easier. We’ve not got all that legacy system to deal with, but I think lots of lenders, and we know of other big lenders that are spending tens of millions of pounds to try and solve this and they’re just not there yet,” he said.
Lender APIs can be costly and time-consuming but broker feedback is crucial
Ben Nadel, co-founder of Woodhurst, which is a consultancy that works with lenders on their digital modernisation, said a lot of lenders “want to make brokers’ [lives] as easy as possible”, therefore they would want to be on sourcing systems, as that is the preferred option for brokers.
However, undertaking an application programming interface (API) with sourcing systems and other integrations can be “costly” and “take time to build”, which can be a problem for smaller lenders that “do not have deep pockets”.
“[Smaller lenders] are thinking: ‘Where do I put my money?’ I think some feedback from the brokers would be really useful on that, just to give them that knowledge,” he said.
Jack Rogers, founder of Keychain, said there were two costs of APIs; one being establishing them and the other being maintaining them, which is the “real killer”.
“We’ve had questions before about integrating into some brokers who have built their own back-office systems. We will say yes, but we’re not going to maintain it, you have to maintain it, because it’s such a big and real cost to maintain APIs when systems are changing, because they can completely break both systems, so it’s a tricky one,” he explained.
Rogers said advisers also had different approaches with sourcing systems, using a blend of tools, adding that it was quite “experience-based” and a “blend of art and science”.
“I think when we speak to the advisers using our platform, you speak to two different advisers, and their process for research is completely different. Some will use Twenty7tec, Mortgage Broker Tools or some of these other platforms out there.
“There’s not one defined process in the industry, or one source that everybody goes to, and we definitely struggle with that,” he added.
Mawdesley said that, speaking from the experience of having worked at a lender, integrations and APIs can take a while to implement due to legacy technology.
This may give newer lenders an advantage, as they can “plug in” over a shorter time frame, and getting the “right architecture” in place was crucial.
As a new lender, he said brokers currently have to submit cases through its mortgage platform, and it was still deciding which sourcing systems and CRM platforms it was going to integrate with.
“The reality is, we built our platform to be a one API plug-in so we can go and work with many different firms and get that information straight into the platform and push the answers back really quickly.
“We’ve got an exciting roadmap over the next couple of years, but I think it’s key that you find the right providers who can speak to the right CRM sourcing systems, and that’s driven by the brokers that you want to deal with. I think there’s [a] huge opportunity there, but I think it requires a bit more work and focus, but certainly lenders who are going down that journey, and it’s the way that the market will move,” he said.
The Specialist Lending Event continues around the country and will take place in Aston Villa and East Sussex this week.
