The role of technology in the mortgage market is increasing but studies show lenders' digital functions still fall short of adviser expectations.
According to a study from Iress, more lenders and brokers have embraced technological advancements over the past year and the number of those in the industry who see digitisation as a good opportunity for the market has increased.
The Intermediary Mortgage Survey, which analysed the systems and processes of 24 lenders and canvassed the opinions of 480 intermediaries, showed that application programming interfaces (which allow different online systems to link together), digital transformation and robo-advice dominated as the areas which lenders and intermediaries believed would impact the market.
The study, published last week (May 22), showed a third of lenders have invested in API technology — either implementing it themselves or accepting applications via APIs — whereas last year fewer than half of lenders thought the tech would open up opportunities.
More lenders have also moved their position on open banking. This year, 96 per cent of lenders saw open banking as beneficial to the mortgage process compared with six out of 10 last year.
But despite the rise in the number of lenders accepting or implementing new technology, almost half of the lenders analysed fell short of the intermediary market's expectations in this field.
Of the 24 lenders who were assessed on Iress' functionality test, 14 provided three fifths of the functionality Iress described as "best in class" — and this was considered meeting industry expectations.
This left at least 11 lenders who fell short of such expectations, and the 14 who did meet the bar still fell short in 42 per cent of the areas assessed.
Commentary from intermediaries showed brokers wanted to see improvements in case tracking that provided more real-time updates and included progress with valuations and solicitors.
The study showed there was still a high proportion of lenders in the wider market that did not provide real-time case tracking and many updates provided online, by e-mail and SMS were not fully real-time, were inaccurate or included insufficient detail.
More lenders seem to be entering this sphere however, as 96 per cent of lenders said they offered case tracking — up from 80 per cent last year — and 65 per cent said they offered some form of real-time tracking.
Steve Carruthers, principal consultant of lending at Iress, said: "Many lenders continue to invest in their portal technology and are seeing benefits in terms of frequency of calls from intermediaries falling and faster approval times.
"However, the research suggests there is a wide gap between ‘best and worst in class’ in terms of lender functionality, with intermediaries still asking for easier and simpler navigation and phone calls for case updates remain high."
Mr Carruthers added that digital advice was seen as a growing opportunity, with more intermediaries and lenders now expecting to offer a quicker, more efficient customer experience, and that continued integration between sourcing systems, lenders and third parties would be central to the short-term shaping of the market.