If you were to ask an aspiring buyer to describe the mortgage market, the words ‘innovative’ or ‘technologically advanced’ are, sadly, not the first you’d hear.
Looking at technology across the market, we can all see that, for the most part, it’s built and held together by a series of legacy systems.
I know of one decent-sized lender whose mortgage platform was built on the carcass of an airline ticket booking system.
It feels less like a technological revolution and more like a knee-jerk reaction
Innovation in a tightly regulated market takes a lot of time, money and talent. Being such a heavy lift, it may not always seem an obvious place to invest. Why build an app when the post will do?
But this failure to embrace new tech effectively stifles an otherwise thriving industry by limiting our collective ability to imagine and create better solutions, to the detriment of prospective homebuyers.
It’s just wrong that, in a housing affordability crisis, the mortgage options available to first-time buyers look basically the same as the ones their parents and even grandparents were offered. Why should products created for earlier generations be the only solutions available now when the rest of the technological landscape is all but unrecognisable?
To be clear, I’m not saying we should all run out and license whatever white-labelled AI tool has just come to market. In fact, introducing tech for the sake of it misses the point.
Will the other players in our industry seek out opportunities to drive powerful, tech-driven change, or will they leave the strategic thinking to ChatGPT?
The industry’s fervent but erratic adoption of AI, for example, doesn’t appear to contain a view towards transformational customer benefit. It feels less like a technological revolution of the mortgage market and more like a knee-jerk reaction. The result is frustration, for both brokers and customers — just with slightly different flavours.
Inhospitable market
The generations preparing to buy homes (or hoping, if not truly believing, they’ll be able to pull it off) face perhaps the most inhospitable housing market ever.
According to the Office for National Statistics, the average house price in London is 12 times the average salary. Do these aspiring buyers need 1,000-word articles written by AI? No. They need the support of real people invested in their success, and products that approach lending in a fundamentally different way.
It’s just wrong that the mortgage options available to first-time buyers look basically the same as the ones their parents and even grandparents were offered
Tech is a critical part of improving outcomes for these buyers. It can free up the time of our talented teams to provide meaningful customer support and create against-the-odds success stories. But only if we approach its implementation with purpose.
At Gen H, tech drives most of what we do. Our tech shores up our mission and enables us to better support the people we’re serving: first-time buyers, homemovers and remortgagers — all people hoping to find their place on the property ladder.
But this is because we treat our technology as a co-pilot — never a replacement — for the human connections that power this industry.
The Consumer Duty asks us to use all reasonable means available to create good customer outcomes. Taking the spirit of the duty seriously reveals an opportunity and an obligation to forge new technological paths to benefit consumers, and to embrace others in our ecosystem as they bring new propositions to light.
This failure to embrace new tech effectively stifles an otherwise thriving industry
And opportunity in this space is plentiful. From streamlining application processes to enabling digital mortgage management, or launching products that are structured in fundamentally new ways to support today’s buyers, there’s room for everyone to innovate.
I know Gen H isn’t alone in seeking this purposeful innovation. April Mortgages’ Dutch-style loans, Perenna’s long-term fixes, and Skipton’s and Accord’s low-deposit mortgage solutions are examples of exciting developments that are poised to create real change, and we’re cheering them on.
Together, our use of tech is making a meaningful difference for people.
I know of one decent-sized lender whose mortgage platform was built on the carcass of an airline ticket booking system
But the question remains: will the other players in our industry seek out opportunities to drive powerful, tech-driven change, or will they leave the strategic thinking to ChatGPT?
Pete Dockar is chief commercial officer at Gen H
This article featured in the July/August 2024 edition of Mortgage Strategy.
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