Technology has transformed every business landscape, and brokers have not been immune to the revolutionary wave. In fact, we have a podcast on what makes the new ‘Digital Broker’.
As advancements in technology grow at an accelerating pace, we thought it was time to step back and consider where the broker adds the most value.
Robots are rational, but brokers make the right choices
Often in movies about the future of artificial intelligence, the moral dilemma that robots face is between making the logical choice of rescuing something of material value versus rescuing something of emotional value.
Sourcing a mortgage is much the same. A recent study by Experian found that just 3.5% of people searching for a mortgage were eligible for every deal on the market. More shockingly, 33% of customers get rejected by lenders as they don’t meet their full lending criteria.
Furthermore, the Financial Conduct Authority’s (FCA) Mortgage Market Study said that digital eligibility tools were more likely to focus on consumers with straightforward needs and only give “yes” or “no” responses, discouraging those with complex situations from seeking further advice.
Robots save time, but brokers care
Saving time is one area in which digital tech has really transformed the lending landscape. Thanks to sourcing systems, a broker can enter a client’s details into the market and instantly find mortgage products that match that client’s criteria.
While this instant service is useful, customers with complex backgrounds and finances will often struggle to tick enough boxes to qualify for a good mortgage.
Robots cut the effort, but brokers support
The FCA has acknowledged that any eligibility tools developed by the market may focus, at least initially, on consumers with more straightforward needs, not those with the most complex circumstances.
It said: “Eligibility tools will help consumers who don’t want or need advice to choose a suitable mortgage. They are not necessarily a substitute for advice and will also help intermediaries to find the best products for their clients.”
A mortgage broker helps customers with complicated financial situations by seeing through the data and finding the right product, rather than one which simply ticks all the boxes.
Robots present, brokers connect
Consumer engagement in the mortgage market is high, according to the FCA’s market study. But inactivity is harming some consumers – the regulator estimates that about 800,000 consumers do not switch when they would benefit from doing so.
The harm is significant – consumers who do not switch miss out on average savings of £1,000 per year during the introductory rate period.
This is where mortgage brokers help build a long-term relationship that focuses on a client’s best interests throughout the life of the product.
Brokers are crucial to lending as they apply a customer focus that simply cannot be replicated by a robotic process. For more insight into the changing world of mortgage brokering, check out our other Growth Series content.
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Accord Mortgages Limited is authorised and regulated by the Financial Conduct Authority. Accord Mortgages Limited is entered in the Financial Services Register under registration number 305936. Buy to Let mortgages for business purposes are not regulated by the Financial Conduct Authority. Accord Mortgages Limited is registered in England No: 2139881. Registered Office: Yorkshire House, Yorkshire Drive, Bradford BD5 8LJ. Accord Mortgages is a registered Trade Mark of Accord Mortgages Limited.
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