In an ultra-competitive mortgage market, with major economic uncertainty looming, many lenders are trying to maximize their use of technology to streamline business processes. Modern tools offer the chance to improve efficiency to be as cost effective as possible, without compromising on the very best customer experience.
However, many organizations have limited resources to support major transformation programs. As a result, they are looking at ways to maximize the benefits of existing systems by integrating new technology to radically reduce the time to offer.
Targeted digital transformation
The rapid growth of digital consumer retail banking has changed expectations from financial services in terms of convenience, speed and flexibility. Among institutions, this has driven a push for digital transformation, but this carries its own risks and opportunities. To achieve this in the most efficient way, it’s important to take a holistic approach.
Achieving mortgage transformation and reducing mortgage bottlenecks requires a three-strand approach:
- Implementing new technology to add new capabilities
- Utilizing existing technology more effectively to provide maximum business output
- Having the right skills and people to support transformation program targets
Streamlining the customer-onboarding process
Setting the standard for customer experience begins from the very first step of the mortgage process, with the opportunity to differentiate services and increase retention. Since mortgages are considered one of the most stressful experiences for consumers, lenders can improve engagement by empowering customers from the outset.
A simple method of streamlining this process is by providing an automated front-end service to quickly determine eligibility. Customers enter key information around income, expenses, mortgage value and terms, which then pulls data into their application, preventing any duplication. Advantages include:
- Improving the customer experience by reducing wait time
- Preventing back-office staff from having to sort through unsuitable candidates
- A reduction in rekeying information which subsequently helps office staff use their time more effectively
Leveraging open banking to minimize document requests
Mortgage applications are information-heavy, which can result in a large volume of paperwork, putting pressure on customers and increasing the work of back-office teams. In many instances, data from PDFs or physical documents needs to be entered into underwriting systems to determine eligibility.
Open banking offers a solution by sourcing data directly from customers’ bank accounts. This direct integration enhances data submission with real-time and accurate financial data, reducing input from customers or teams. Live information reduces the need for documents and means that data can be transferred directly to the affordability engine for faster analysis and approval, enabling:
- More intelligent affordability checks
- Verification of some income types
- The identification of risk indicators
Enhanced and automated underwriting
Many organizations currently use workflow technology within their underwriting systems, but those who have undertaken transformation projects with Sopra Banking Software have benefited greatly from automated routine mortgage application checks.
Removing or reducing the need for human intervention frees up back-office staff to work on tasks that require human judgment. This also contributes to a better customer experience, a quicker time to offer and helps organizations improve their net promoter score (NPS).
Additionally, the pandemic has shown how important it is to have highly configurable systems that enable organizations to adjust affordability assessments quickly in response to economic conditions. Consumer conditions now require more attention, with 20% of the population finding themselves in a more complex financial situation, according to the Bank of England.
For providers who have tightened their lending criteria for high-risk industries – such as hospitality, travel and some retail – automation can also leave more time to review cases and improve approvals, or batch manage non-suitable cases.
Streamlining the product switch process
Product switching currently represents over 40% of mortgage activity and is a process that benefits hugely from automation. Using smarter systems, it can be set up to require little or no human interaction, again freeing up staff to focus on value-adding work.
Lenders are utilizing the automated product switch functionality at Sopra Banking Software to transfer tens of thousands of mortgages in a single day, reducing the workload of admin staff and enhancing customer experiences. In some cases, it has reduced switch time from 20 days to just 10 minutes.
Gaining a technological advantage
With the mortgage market calming after a period of disruption, now is the time to focus on building systems that can adapt to future shifts and create long-term efficiency. As the market becomes more competitive amid lower volumes, lenders will need to focus on building systems that deliver value for customers and internal teams, while managing costs.
Moving forward, competition will be defined by the way lenders use technology strategically. Those that can effectively implement new tools to differentiate their products, reduce costs and enhance customer experience, as well as building a more scalable lending book and gain competitive advantage.
Sopra Banking Software is built with efficiency in mind, adapting to the needs of your institution and your customers. From linking existing siloes, to adding new capabilities our flexible platform delivers significant performance gains while helping you stand out.
Get in touch with a member of our team today to find out how Sopra Banking Software can transform your end-to-end mortgages and set you apart.