Virgin Money has pledged to fully automate its mortgage service by 2024, which would see it move away from paper-based processes completely to a “100 per cent digital” offering.
The high street lender published a timeline of its anticipated digital propositions alongside a trading update today (November 4), which mapped out the bank’s “acceleration” of its ‘Digital First’ strategy.
In order to reach a fully digital mortgage service, the bank has plotted a number of future milestones - including automating its mortgage applications by August 2022, the final month of its current financial year.
By 2024, the lender intends to reach a state of straight through processing for its mortgage service. In other words, no human will need to intervene to finalise the transaction.
“In mortgages, we will deliver straight-through mortgage processing to drive further efficiency,” the lender said.
The bank’s home coach app will play an integral part in this strategy, according to the lender’s investor presentation. The app, already available to download, helps Virgin Money’s customers save for their mortgage.
The presentation suggested straight through mortgage processing would operate through this app in due course.
Other commitments made by the bank included the launch of buy-to-let mortgages for limited companies, green mortgage upgrades and the launch of its digital investment platform with Abrdn - all by the end of next summer.
By 2024, the lender also intends to enter the later life mortgage market.
But it also said the adoption of hybrid mortgage models was no longer expected in its 2022 financial year.
Virgin Money’s mortgage balances sat at £58.1bn at the end of its 2021 financial year, down 0.3 per cent on its 2020 financial year.
The lender said: “Mortgage balances [were] broadly stable as pricing discipline was maintained, with margin prioritised over volume growth in an uncertain and increasingly competitive environment.
“Balances contracted overall in the second half of the year as strong market competition resulted in reduced customer rates, alongside higher swap rates and eroded spreads.”
The lender’s continued investments in digitising its mortgage processes have, so far, struggled to see high adoption amongst intermediaries.
In September, head of customer acquisition at Virgin Money, Sarah Green, told FTAdviser its partnerships with technology firms such as Twenty7Tec were yet to bear significant fruit as brokers continued to resist exploring new processes.
She said getting brokers to engage with ‘full fintech’ was the difficult part of technology investments.
Alongside its Twenty7Tec partnership, Virgin told brokers in August it would accept electronic signatures on residential and buy-to-let mortgage declarations.
It also extended its partnership with Capita by five years in July to use the provider's mortgage orientation software, OmigaDigital, which integrates broker and customer portals.