Mortgage brokers must evolve or get left behind as peers adopt new technology to better service clients, is the warning from a range of sector experts.
A series of recent tech-savvy launches has revealed fresh competition to the traditional brokers’ approach.
Examples in the last few weeks include the launch of digital mortgage broker Habito, which promises to find borrowers the best mortgage for them within around half an hour, and HSBC’s new approval service to help house hunters get their mortgages signed off in just 24 hours.
Brokers are now being told they face a stark choice - either commit to evolving their offering to meet the needs of their customers, or else remain as they are and take a purely transactional approach.
Legal & General Mortgage Club director Jeremy Duncombe compared mortgage brokers’ position to that of internet retail giant Amazon, which had to diversify to compete.
“Just as Amazon no longer only sells books, brokers have a lot more to offer customers than just mortgages – from advice on releasing equity, to protection, conveyancing, lifestyle planning, other borrowings, and so much more,” he said.
“Those who don’t adapt to stay relevant in this dynamic market may be left behind. If brokers are to sustain and grow market share, they need to invest in technology and provide a differentiated service that will enable them to meet changing customer needs and expectations.
“Providing a service based holistic offering will help to protect brokers from the changing shape of customer requirements.”
Mr Duncombe said as customers become ever more sophisticated and tech-savvy, they will start to demand similar experiences and offerings from financial services providers – including brokers – as they have come to expect from other consumer brands.
“It has to be about more than just mortgages,” he said.
Robert Sinclair, chief executive at the Association of Mortgage Intermediaries, agreed that to survive brokers will need to develop digital approaches to customers and new ways of integrating with lenders.
“Trading with customers will have to be on their terms, when they want, through their choice of medium, whether that is tablet, phone, Skype or face to face. Indeed, in some transactions it might be all four,” he said.
Specialist technology company Mortgage Brain’s chief executive Mark Lofthouse said it would come as no surprise he is a huge believer in mortgage technology.
“Even allowing for my inevitable bias, however, I’ve still been surprised and pleased at the extent to which intermediaries have seized the opportunity and see the benefits that technology can bring to their business,” he said.
“Whether driven by the consumer, broker or regulator, the industry is handling all aspects of the mortgage process in ways that would have been unimaginable even 10 years ago.
“Advances in systems’ speed, accuracy and record keeping have all combined to give tech-savvy brokers not just the edge over their competitors, but also the tools to ward off the threats posed by those determined to wrest business away.”