While digital innovations have transformed other financial services industries, the application of technology in the mortgage sector is only creeping forward. As a consequence of this lack of innovation and technology development in the mortgage market, the process of obtaining and managing property finance remains one of the worst customer experiences in financial services.
A study by the Financial Conduct Authority into the residential mortgage market is exploring the use of technology and digital processes in mortgages, keen to understand how they affect consumers and the potential gains to be made in increased convenience, flexibility and access.
Keen as we are to encourage the adoption of greater innovation across the mortgage sector, LendInvest has responded to the scope set out for mortgage market study, setting out a number of potential areas of exploration as part of the FCA’s investigation:
- Introduce market standards for use of technology: There are limited current standards applied to mortgage market transactions. The introduction of common standards could improve consumer outcomes as a result of swifter, simpler and more robust decision making by mortgage providers.
- Flexibility in switching between mortgage providers: Simple and harmonious switching of mortgage providers should be a priority in supporting consumers to get the right product for them.
- Due diligence: Exploring how technology can support the advancement and streamlining of due diligence processes could help to support underwriters make better decisions about prospective borrowers and get the loans into the hands of the homebuyer sooner.
View our submission to the FCA here: LendInvest response to FCA Mortgages Market Study-Terms of Reference