If you build it, they will come: How the mortgage channels are shifting

  • By Julian Wilson

More and more mortgage borrowers are comfortable engaging directly online with a lender compared with other channels, according to RFI Group research. 

It was over five years ago when the industry first began talking about the fully “Digital Mortgage”. 

Prior to that the first attempts to digitise the application process was simple to have the application form on a website, in almost the exact same format as the paper one you printed off. 

After a borrower completed their “digital application”, they then had to go through the process of income verification, ID and expense checks etc. 

This involved an arduous archaeological dig for documents, with the need for a printer, a scanner, a JP and a branch accessible during opening hours.

With so much effort and confusion, it would often end up alienating borrowers. It is no wonder we begun to ask more and more brokers to do all the work.

Fast forward to 2020, we can say for many lenders: 

• Digital applications provide a more intuitive experience rather than “Name, DOB” and so on; 

• We can ID ourselves digitally; 

• Submit income/expenses digitally (Via Screen scraping or eventually CDR); 

• Sign digitally; and 

• Mortgages settlement is even digital, 

RFi’s quarterly surveys dedicated to mortgage borrowing shows that banks seem to be delivering on expectations. To borrower the line from Kevin Costner in Field of Dreams: Build it and they will come, our research certainly shoes that over the last two quarters showing that consumers are now willing to directly use a lender online.

So what does that mean for lenders? 

It demonstrates that whilst some of these digital improvements have been around for a while, it sometimes takes a behavioural shift to drive migration. It will be something to watch over time to see whether we return to our old ways. 

It will also become very clear which lenders have the best experiences.

A recent report into open banking highlights that that there is ample opportunity for the mortgage sector. 

We eagerly anticipate the results of RFi Group’s December mortgages holders survey.

Julian Wilson is the deputy general manager at RFi Group.