The Intermediary – June 2025 - Flipbook - Page 80
T E C H N O L O GY
Opinion
Lenders must pick
up the innovation
gauntlet
T
here is always a need
for lenders to invest in
technology – it develops
on a daily basis, and
customer expectations
grow. Just think of the
ease with which you can purchase
virtually anything on Amazon.
In a world where customers expect
a similar experience when it comes to
geing a mortgage or refinancing, it’s
nearly always a rude awakening.
Not only is the paperwork, forensic
affordability check and seemingly
endless to-ing and fro-ing a pain for
borrowers, it’s wholly inefficient for
brokers, surveyors and lenders, too.
The fact that financial services
is so much more heavily regulated
than other sectors is oen cited as the
biggest barrier to cuing out friction
for customers. Now it seems the
regulator aims to lower that barrier,
while relying on Consumer Duty to
maintain consumer protections.
Last month, the Financial
Conduct Authority (FCA) published
its Mortgage Rule Review (MRR)
consultation proposals, which aim “to
simplify some responsible lending and
JERRY MULLE
is managing director at Ohpen
advice rules for mortgages, making
it easier, faster and cheaper for
consumers to make certain changes
to their mortgage and engage with
their provider.” The proposals are
fairly wide-ranging, but largely focus
on improving customer experience,
access and effective competition in
the market.
Among other things, the FCA laid
out proposals to make it easier to:
remortgage with a new lender; reduce
the length of a mortgage term; and
engage with customers outside the
regulated advice process.
Speaking at the Building Societies
Association (BSA) conference in May,
Emad Aladhal said: “We want to
make it easier, faster and cheaper for
borrowers to make changes to their
mortgage.These proposals can allow
lenders greater scope to innovate
and develop their own approaches to
deliver good outcomes, and in doing
so, empower borrowers to make the
right choices for their mortgage.”
He added that changing the
regulations was just a first step: “It
will take a truly collective effort on the
part of lenders, our fellow regulators,
Serving the underserved
The FCA’s speech at the BSA also highlighted the developing needs of traditionally
‘niche’ markets. It singled out lending to older borrowers as one area needing
particular support from lenders.
Aladhal said: “Later life lending is no longer a niche, but increasingly the norm. We
all need to face up to the complexities – and opportunities – of increased consumer
need to continue borrowing into later life.
“For those borrowers who, today, need to maximise their mortgage term to secure
a home – what steps do you need to take to support those customers [to] manage
risks arising from holding that debt for longer?”
It’s a brilliant question. How each building society – and other lenders for that
matter – chooses to answer it will be different.
That is what breeds a healthy market that works for consumers. What all lenders
will need in common is a system that can support their particular answer.
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The Intermediary | June 2025
Government, developers and others to
tackle the structural challenges facing
the UK’s current housing market.
“To make the changes meaningful,
we need you – the industry – to take
up the gauntlet of innovation, to use
the flexibility we aim to create, to
make meaningful progress for our
communities. So I ask you to consider
where you can do more today. Where
you can innovate, explore new
ventures and review your practices.”
A public discussion is now
underway, with heated views already
coming out on when fully advised
mortgage sales should be required
and how the customer journey can
be designed to carefully support
borrowers making big financial
decisions. However the wider industry
and other key stakeholders respond
to the FCA’s proposals, whatever rules
the market ends up with, perhaps
more important for lenders is what
they do in that new world.
Aladhal made it clear that the FCA’s
ultimate aim here is to support lenders
to “generate sustainable growth.”
That is going to require changes
– foremost in how lenders conduct
their businesses. If more onerous rules
are relaxed in certain circumstances
where broader Consumer Duty rules
overlay all conduct, lenders need
processes that can flex and cope, and
which can produce an evidential trail
that satisfies their responsibilities.
This is yet more reason for lenders
to review whether their technology
and systems are fit for purpose. What
is needed is flexibility, not just a
different process or customer journey,
but a system that can change to suit
their needs and circumstances. For
those facing such a decision, at Ohpen
there’s help at hand. ●
