BSA blog

BSA blog

News and views on topical issues from BSA staff and guests.

Sign up to receive blogs

By subscribing you consent to us sending you blogs

Blog

Guest blog: Elevating the borrower journey through cloud migration

Guest blog by Daniel Broadhurst, Regional Vice President, nCino.

First published in Society Matters magazine

The global pandemic – and the government’s subsequent response – has reshaped the UK mortgage sector’s approach to digital lending faster than any event in recent history.

Covid-19 triggered an innovation acceleration not only in communication technologies, like Zoom, but also cloud lending technologies.  This enabled lenders to continue business operations in a remote environment and still meet borrower’s rapidly changing expectations and needs.

After the onset of the pandemic, house prices fell sharply but quickly recovered, mainly driven by policies that supported the housing market, businesses and consumers. For example, the Stamp Duty Land Tax holiday and mortgage guarantee scheme provided an economic boost evident today, with lending data showing the biggest net application increase on record in March, according to the Bank of England.[1]

To manage the surge in mortgage applications and service payment holiday requests, lenders had to re-examine their resources and find ways to support additional operational capacity and reduced service hours while also providing better borrower support. Quicker access to products and personalised service continues to be important as mortgage options for borrowers have increased for the seventh consecutive month.[2]

The opportunity to buy at a discount has also led to a surge in buy-to-let mortgages Over a third of landlords have expanded their buy-to-let portfolios through the purchase of an additional property or with plans to within the next nine months.[3]  Additionally, 43% of landlords lowered their rents, and 22% refinanced their mortgages during the pandemic. This increased activity sparks a need for lenders to have access to a comprehensive customer and member view that enables them to proactively contact their borrowers. As a result, personalised offers to borrowers seeking to expand their real estate portfolio or refinance their property can become a reality.

Mortgage lenders who have migrated to the cloud have access to a 360-degree view of their customers and members before any interactions take place, which facilitates better informed business decisions and more tailored engagement. This engagement extends beyond customers and members to brokers. According to the Association of Mortgage Intermediaries (AMI), 75% of UK mortgage lending originates via an intermediary. Now more than ever, brokers play a vital role in providing consumers guidance. APIs can help connect brokers and advisors directly with lenders, resulting in less rekeying of data, seamless and secure transfer of information and a faster and more transparent mortgage application process for all involved.

Cloud technology not only kept internal operations running during branch closures, but provided cost-effective ways for lenders to self-service. Institutions now have the flexibility to provision storage and launch applications in real-time without the need of an external service provider, enabling them to cut costs on previously high maintenance services and upgrade fees from legacy, on-premise systems. Cloud technology also offers improved security and privacy than on-premise storage options, which can be lost, stolen or destroyed. These risks are dramatically reduced with cloud data storage and transfer methods.

Covid-19 has had devastating global impacts, but an acceleration toward digital transformation is one positive takeaway that lenders can no longer afford to ignore. By partnering with the right digital provider, institutions can reap the benefits of a cloud-hosted solution that enables an optimised journey for their lenders, third parties and most importantly, borrowers.

1 https://www.reuters.com/world/uk/uk-mortgage-lending-rises-by-most-record-boe-2021-05-04/

2 https://www.mortgagefinancegazette.com/lending-news/mortgage-product-choice-climbs-back-toward-pre-pandemic-levels-10-05-2021/

3 https://www.propertyreporter.co.uk/landlords/over-a-third-of-landlords-are-expanding-their-portfolio.html

 

The views, opinions and positions expressed within guest blogs are those of the authors and do not necessarily represent those of the BSA.

Posted by Daniel Broadhurst on 27 August 2021