Moving mortgages forward: the roadblocks & building a better customer experience

By Richard Morgans, General Manager, UK&I at Mambu

Buying property is one of the biggest investments we make in life. Some may say it’s one of the greatest emotional investments too. We’ve all heard about the challenges of qualifying for a mortgage, so it’s no surprise that people have high expectations when it comes to their lending provider – especially first-time buyers.

Lenders that leave customers waiting weeks for answers, or keep coming back with additional requests after an application has been submitted, are losing out on potential homebuyers who have an expectation for speed, transparency and flexibility.

The latest technologies have led to faster and more seamless financial services, yet traditional lenders are struggling to keep up with the shift in consumer demand. To better understand the challenges lenders face and identify potential solutions, Mambu conducted a study in partnership with Whitecap Consulting, drawing on interviews with senior leaders at ten leading mortgage lenders and building societies in the UK.

How can we move mortgages forward?

Outdated and complex processes are holding lenders back

Manual and disjointed processes are preventing lenders from reaching true modernisation. According to our study, despite processes moving online, nine out of ten function heads reported that their organisation had little to no automation in place. Many specialist lenders still lean on human underwriting to support their lending decisions – in short, outdated systems and old-fashioned processes.

Data accuracy can be compromised by manual entry, which may lead to duplication. This results in slow and complex processes for regulatory compliance, which requires continuous monitoring, auditing and reporting. Meanwhile, systems that are poorly integrated without proper API capabilities make it difficult to extract data and deliver new micro-services from legacy platforms.

Customers expect more

On top of creating expensive inefficiencies for lenders, outdated processes are impacting the customer experience. From the moment a customer signs up for a new product, confirmation may take two to three weeks – often due to complex internal systems that do not connect with marketing and communications. As a result, customers are bounced between digital and physical touchpoints when lenders don’t have the facility, processes or security to fulfil requests in a single channel.

Customers are left with a lack of choice due to this stifling of innovation. They may decide to look elsewhere, meaning lenders must diversify their services to stay competitive and accommodate changing consumer needs. The ability to build new products on the fly without taking on excessive costs or risk at speed is key. There’s little point in adding a feature to solve a problem if it becomes available six months after the problem occurs.

True flexibility requires lenders to deploy micro-services and test them continuously until they reach the right result. And while back-end configurations can be tweaked, the structure of these services remains fairly static – making it a challenge to rebuild. In most instances, there is no access to APIs to carry these changes through. This means that product level changes, such as introducing savings pots or goals, would require a core banking system change – and this can’t happen overnight.

Transform or… what? 

The findings from Mambu’s Making Mortgages Move Forward study show that legacy systems are simply not able to deliver the levels of functionality and innovation that today’s homebuyers expect.

However, this doesn’t have to mean that traditional lenders come last. Small changes have the potential to make big differences in the way they operate and serve their customers. A new generation of cloud-native, SaaS lending and banking platforms are available to revolutionise workflows and sky-rocket innovation within the sector. These modern solutions will allow lenders to provide more accessible and commercially competitive services.

SaaS cloud platforms use powerful APIs to connect and unify channels and third-party services, allowing lenders to build on existing brand trust to deploy products and services that benefit both their customers and themselves. By allowing automation to be applied throughout user journeys, lenders can reduce manual tasks to cut costs, time and potential errors – freeing up advisors to focus on advice over admin. A composable approach to core banking

A composable platform is the key to successful digitisation. Our study also found that the biggest challenges traditional lenders face when it comes to digital transformation are that it’s too risky, expensive and time-consuming. Mambu’s composable approach to core banking allows institutions to pick and choose the components they need, so they can enhance functionality by bolting on new capabilities as required. All while enabling a faster time to market for new products and maintaining reasonable costs and risk.

It’s clear that there’s a need for change. Mortgage lenders are losing customers as a result of legacy processes squashing innovation. With competition fiercer than ever before, lenders cannot afford to be disappointed by their technology. Instead of living with the fear of falling behind competitors, these organisations should welcome the opportunity to revolutionise the way they operate. There’s no need for a system overhaul or to start from scratch – instead, we’re entering the age of composing a best-in-class infrastructure to drive incremental improvements.

By Richard Morgans, General Manager, UK&I at Mambu

Buying property is one of the biggest investments we make in life. Some may say it’s one of the greatest emotional investments too. We’ve all heard about the challenges of qualifying for a mortgage, so it’s no surprise that people have high expectations when it comes to their lending provider – especially first-time buyers.

Lenders that leave customers waiting weeks for answers, or keep coming back with additional requests after an application has been submitted, are losing out on potential homebuyers who have an expectation for speed, transparency and flexibility.

The latest technologies have led to faster and more seamless financial services, yet traditional lenders are struggling to keep up with the shift in consumer demand. To better understand the challenges lenders face and identify potential solutions, Mambu conducted a study in partnership with Whitecap Consulting, drawing on interviews with senior leaders at ten leading mortgage lenders and building societies in the UK.

How can we move mortgages forward?

Outdated and complex processes are holding lenders back

Manual and disjointed processes are preventing lenders from reaching true modernisation. According to our study, despite processes moving online, nine out of ten function heads reported that their organisation had little to no automation in place. Many specialist lenders still lean on human underwriting to support their lending decisions – in short, outdated systems and old-fashioned processes.

Data accuracy can be compromised by manual entry, which may lead to duplication. This results in slow and complex processes for regulatory compliance, which requires continuous monitoring, auditing and reporting. Meanwhile, systems that are poorly integrated without proper API capabilities make it difficult to extract data and deliver new micro-services from legacy platforms.

Customers expect more

On top of creating expensive inefficiencies for lenders, outdated processes are impacting the customer experience. From the moment a customer signs up for a new product, confirmation may take two to three weeks – often due to complex internal systems that do not connect with marketing and communications. As a result, customers are bounced between digital and physical touchpoints when lenders don’t have the facility, processes or security to fulfil requests in a single channel.

Customers are left with a lack of choice due to this stifling of innovation. They may decide to look elsewhere, meaning lenders must diversify their services to stay competitive and accommodate changing consumer needs. The ability to build new products on the fly without taking on excessive costs or risk at speed is key. There’s little point in adding a feature to solve a problem if it becomes available six months after the problem occurs.

True flexibility requires lenders to deploy micro-services and test them continuously until they reach the right result. And while back-end configurations can be tweaked, the structure of these services remains fairly static – making it a challenge to rebuild. In most instances, there is no access to APIs to carry these changes through. This means that product level changes, such as introducing savings pots or goals, would require a core banking system change – and this can’t happen overnight.

Transform or… what? 

The findings from Mambu’s Making Mortgages Move Forward study show that legacy systems are simply not able to deliver the levels of functionality and innovation that today’s homebuyers expect.

However, this doesn’t have to mean that traditional lenders come last. Small changes have the potential to make big differences in the way they operate and serve their customers. A new generation of cloud-native, SaaS lending and banking platforms are available to revolutionise workflows and sky-rocket innovation within the sector. These modern solutions will allow lenders to provide more accessible and commercially competitive services.

SaaS cloud platforms use powerful APIs to connect and unify channels and third-party services, allowing lenders to build on existing brand trust to deploy products and services that benefit both their customers and themselves. By allowing automation to be applied throughout user journeys, lenders can reduce manual tasks to cut costs, time and potential errors – freeing up advisors to focus on advice over admin. A composable approach to core banking

A composable platform is the key to successful digitisation. Our study also found that the biggest challenges traditional lenders face when it comes to digital transformation are that it’s too risky, expensive and time-consuming. Mambu’s composable approach to core banking allows institutions to pick and choose the components they need, so they can enhance functionality by bolting on new capabilities as required. All while enabling a faster time to market for new products and maintaining reasonable costs and risk.

It’s clear that there’s a need for change. Mortgage lenders are losing customers as a result of legacy processes squashing innovation. With competition fiercer than ever before, lenders cannot afford to be disappointed by their technology. Instead of living with the fear of falling behind competitors, these organisations should welcome the opportunity to revolutionise the way they operate. There’s no need for a system overhaul or to start from scratch – instead, we’re entering the age of composing a best-in-class infrastructure to drive incremental improvements.