The Intermediary – March 2025 - Flipbook - Page 32
SPECIALIST FINANCE
In focus
The evolution of
specialist
T
he specialist lending
market in the UK
has undergone
a remarkable
transformation over the
past two decades, driven
by a mix of product, customer and
distribution changes. The landscape
is now evolving faster than ever with
an increasingly dynamic and
digital landscape.
However, while these advancements
are positive, the industry still has a
way to go before it reaches the level
of technological sophistication seen
in other sectors. Many challenges
remain, including fragmented
systems, inconsistent adoption of
digital tools, and a need for greater
automation to reduce friction in the
lending process.
Looking ahead, the next decade
promises even more disruption,
with artificial intelligence (AI),
automation, and regulatory shis set
to further redefine the way specialist
lending operates.
A look back
Since the Global Financial Crisis,
mortgage lending has been dominated
by high street banks, which
oen overlooked non-traditional
borrowers. Where these underserved
customers were served, the lending
process was predominantly manual,
with applications submied on paper,
requiring significant
back-and-forth between
brokers, lenders and
solicitors.
Mortgage
applications oen
took weeks or
months to
process due
to missing
documents
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and manual underwriting. Brokers
relied on physical files, leading to
inefficiencies and the risk of data loss.
At the time, there were platforms to
connect brokers, lenders and thirdparty services, meaning key stages
such as affordability assessments,
credit checks, and document
validation were handled in silos,
delaying the process.
Compliance and security concerns
were also prevalent, as early-stage
technology struggled to keep up
with the enhanced regulatory and
compliance demands.
Today’s landscape
Today, lenders have started to embrace
digitisation and see it as a means to
create competitive advantage, not just
reduce costs and risk.
With technological innovations
streamlining operations and
improving borrower experiences.
Cloud-based ecosystems now allow
lenders, brokers, and credit
agencies to collaborate in
real time, reducing friction
in the application process.
Borrowers benefit from
increased transparency,
as they can track their
application status
online, alleviating
uncertainty.
Modern
application
programming interface (API)
infrastructures have also
revolutionised the industry,
integrating with third-party services
such as Experian to enable automated
credit assessments and Open Banking.
What once took days now takes
minutes, expediting approvals and
reducing administrative burdens.
With the introduction of General
Data Protection Regulation (GDPR),
the focus on data security increased,
with encrypted platforms ensuring
borrower data remains secure and
meets regulatory standards.
Additionally, the rise of specialist
lenders has brought tailored solutions
for complex cases. This growing
market increased competition
and expanded options for
those who previously
struggled
to secure
financing.
