In most areas of life, digitisation is synonymous with the move to self-service experiences. Financial services have been navigating this wave for the last 5 years or so and have seen some transformative changes.
One such area is in the onboarding of customers for current accounts. A process that used to take days and be laden with manual paperwork can now be done in under 5 minutes, with the help of a variety of point solutions and digital KYC.
So, why hasn’t mortgages seen the same level of disruption?
In my opinion, one reason it’s due to a slight misunderstanding as to what a digital mortgage should look like. Ironically, as many businesses move toward a fully self-service model, the percentage of UK mortgages acquired via a broker has actually increased slightly. It’s clear that, when buying a home, its complex and important enough that buyers prefer that personal touch.
But, are ‘personal touch’ and ‘being digital’ mutually exclusive concepts?
The ‘Decision In Principle’ offers a unique opportunity for lenders to fully automate with digisation. Allowing them to make a meaningful offer to a prospective customer in a few minutes and with little friction, before offering them a variety of hybrid engagement models and advice.
The ‘Digital DIP’ allows the bank to:
Ultimately, Financial Services is fortunate. The road for better digital customer experiences has already been paved by other industries, like retail ecommerce - we don’t need to look far for inspiration on what to do next.
The Digital DIP is something that mortgage providers can -and should - adopt immediately. It can be easily and cheaply delivered and connect, with existing underwriting systems without the need for wholesale transformation.
Low-hanging fruit like this needs to be grabbed with both hands!
Digitising the full mortgage process has a few more complexities, some of which are different between European markets, but I’ll explore the remainder of the digitisation of mortgages in our next articles.
February 20, 2023