Richard Hayes says the traditional mortgage adviser model is broken. The co-founder of robo-adviser Nuvo says there is very little flexibility when a mortgage application is being made, while some of the processes are long and arduous.
Mr Hayes says: “Customers want to be able to go online and tell you about themselves, but they want an immediate feedback. They want to know how much something will cost and if they are likely to be accepted for a mortgage.
“They might be trying to make a call on whether they can put an offer through or not and they need real-time feedback. They cannot wait a week for a two-hour long appointment to determine that information.”
But he does acknowledge that for a large number of one-to-five-man band broker businesses, they do not have the resources to develop expensive technology.
Of the estimated 16,000 mortgage brokers in the market, he says there are still only a handful of businesses focused on providing a digital proposition. Mr Hayes also says price comparison sites and banks are not meeting customer needs.
Customers cannot get advice from comparison sites while banks only sell their own product.
This is why he claims Nuvo can fill a gap in the market, particularly for millennials.
The UK mortgage market is worth £1.3tn, representing 11.1m mortgages, and is the largest in Europe in terms of amount lent each year and the total value of outstanding loans.
Mr Hayes says: “Primarily, mortgage broking is done face-to-face or over the phone and you are constricted to working hours.
“But we have people completing fact-finds in the middle of the night. We are seeing huge spikes in traffic late into the evening. For these people it is not convenient to go through that process during working hours.”
His ambition is to build a business that will be a digital broker equivalent of travel sites like Skyscanner or Expedia.
He adds: “People have been desperate for this type of technology, and a lot of that comes down to what technology is and has been available to us. Right now it feels like the right level of technology and capability is available, and the customer is ready for a different type of transaction.”
Nuvo, the trading name of Life’s Great, is heavily geared towards using automation and artificial intelligence (AI) to help people get a mortgage in principle in 15 minutes.
Using a mortgage calculator, individuals enter basic information before the broker throws up a number of suggested lenders.
Following this, the prospective customer will then be prompted to enter further details during their fact-find to get more specific information about lenders and their rates.
An AI-powered chatbot allows customers to ask questions at any point.
In the background, Nuvo’s technology uses figures from the Office for National Statistics to confirm the information provided.
At that point the customer will be spoken to by a qualified mortgage adviser.
Mr Hayes stresses that although simpler applications are quicker, Nuvo can still process more complicated applications – they just take longer and require a lengthier conversation with the adviser.