The Intermediary – June 2025 - Flipbook - Page 81
T E C H N O L O GY
Opinion
Value matters for
clients and brokers
J
ust over 10 years aer
the Mortgage Market
Review (MMR) rules
came in – enforcing strict
affordability checks and
the necessity for mortgage
advice in most cases of purchase and
refinance – the Financial Conduct
Authority (FCA) has published its
new consultation for the market: the
Mortgage Rule Review (MRR).
From MMR to MRR – this paper’s
stated aim is to make it “easier,
faster and cheaper” for consumers to
speak to a mortgage provider about
their mortgage needs, reduce their
mortgage term and remortgage with a
new lender.
It is hard to argue with these
objectives – the process of
remortgaging with the majority of
lenders remains arduous at best, and
outright stressful when it’s not going
smoothly. While the endgame is one
prey much all lenders are likely to
favour, the question is how to achieve
that on a practical level.
If and when the rules change, in
whatever form is decided in the final
regulation, lenders will have to be able
to put them into practice. The market
has been on this path for some time
now, even without the FCA review.
Rising interest rates from the
Bank of England since late 2021 have
prompted the lion’s share of borrowers
coming to the end of fixed term deals
to remortgage via a product transfer.
The ease of refinancing on the same
terms without the need for a full
re-underwrite has clearly appealed,
particularly to those coming off
very low fixes and facing a monthly
repayment jump sometimes equal to
several hundred pounds.
To the lenders we work with, it
has remained of vital importance
that they offer customers the choice
between taking mortgage advice
and doing a simple product switch
– depending on their preferences,
some people just like the reassurance
that a broker offers them. For those
cases that require a bit more thought,
lenders are finding the underwriting
process is necessarily more in-depth
and time consuming – more oen
than not requiring advice and the aid
of a broker. This makes the case for
a slick and quick product switch in
those cases that are a simple like-forlike remortgage even more compelling
from the lender and broker’s point of
view. The time saved on the laer cases
frees up time to support borrowers
who find themselves in the former
circumstances.
Perfect platform
All this requires a platform that can
support it. That means flexibility and,
in order to comply with the Consumer
Duty, a clear evidential trail that
shows step by step the customer choice
of journey.
Building societies are extremely
clued up on this at the moment,
with those in the mid-tier
particularly focused on improving
the customer experience when
doing a straightforward remortgage
online. With or without a fully
advised process.
At Finova, we are doing a
considerable amount of work with
lenders to find and develop solutions
that help them achieve this in an
affordable and effective way.
To support our own business
proposition, we carried out some
research with building societies from
across a range of specialisms, and
interviewed their technology chiefs to
gain an understanding of where the
market is in this journey.
The results, which we plan to share
in full in the coming month or so,
have been interesting and informative
– giving a tangible overview that
solidifies the anecdotal stories that
circulate the market.
What is clear is how commied the
mutual sector is to adopting cloudbased technologies to improve their
HAMZA BEHZAD
is business development
director at Finova
offerings to both customers and
intermediaries.
The majority of mid-tier building
societies have a chosen to invest in
areas that deliver the most bang for
their buck – with customer retention
offerings at the top of this list.
This is true on both the savings and
mortgages sides of building societies’
balance sheets, with the former very
much focused on improving the
customer journey and the laer more
about offering choice – be that direct
execution-only or advised, either
internally or via their own broker.
Finding the balance
The FCA has been careful to underline
that an easier process for customers
should not compromise on offering
fair value. What the regulator
proposes would allow for simpler
affordability assessments where a
proposed remortgage is on similar
terms to an existing contract but more
affordable than a new deal indicated
by a customer’s existing lender. This
would allow for a more proportionate
and risk-sensitive approach, and
enables consumers to more easily
access a cheaper product.
Given that interest rates have been
falling back consistently since August
last year, there is a growing market
need for this.
Finding new and efficient ways to
support this retention is clearly the
number one priority for lenders that
compete on criteria rather than solely
on price. Value is what maers – for
customers and for brokers. ●
June 2025 | The Intermediary
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