By Katie Pender, Managing Director, Target Group

Innovation and technology are advancing rapidly; shopping delivered to your door with one click, a new car purchase within minutes, and mobile phones replacing the need for cards or cash. However, the mortgage application and home-buying process is still behind the curve.

Target Group wanted to reimagine the experience. So, we led the charge in revolutionising the mortgage application process using Open Banking, Automated Valuation Modelling (AVM) and high levels of automation, negating the need for manual intervention. But innovation never stops. The power of Artificial Intelligence (AI) and the promise of Blockchain hover excitingly on the horizon. 

Empowering decisions

The path to homeownership can be exciting and nerve-wracking for first-time buyers, from finding their dream home to awaiting mortgage approval. Open Banking is a powerful tool helping them understand their finances and make informed decisions. Mortgage Hub utilises Open Banking to remove uncertainty from the process for both applicants and lenders. 

Applicants can securely share their financial information, giving lenders true insight into their finances, removing the dependency on unreliable and outdated income and expenditure forms, streamlining the application process, and expediting time-to-close. Lenders can choose to deploy Open Banking at Decision in Principle (DIP), Application in Principle (AIP), or at any stage in their application journey. 

Redefining processes  

AVM has been a game changer, particularly in the remortgage and product switch space. The accuracy and level of information obtained through AVMs are continuously improving, allowing lenders and applicants to receive instant decisions and removing days from the process, a feature that comes as standard in Mortgage Hub 

Application Programming Interfaces (APIs) enable integration with all the constitutions of the mortgage application process, allowing instant data exchange. Mortgage Hub facilitates rapid processing, populating, validating, and verifying, removing the need for manual intervention, and further reducing timescales. 

The ultimate desire is to enable point-of-offer mortgage sales using technology, but paper-based documents remain necessary for now. Enter Optical Character Recognition (OCR), which, when supported with the right technology, could extract data, offering benefits like instant validation for brokers and increased operational efficiency for lenders by reducing manual intervention.

Transformational tech enablers

AI drives industry innovation with predictive analytics, aiding lenders and borrowers with personalised insights. By leveraging AI, lenders can analyse vast datasets, identify trends, mitigate risks, and tailor mortgage solutions. Borrowers can make informed decisions on refinancing or switching mortgages for the best deals.

While Open Banking, AVM, OCR, and AI drive mortgage innovation, Blockchain is an exciting outlier. As a decentralised ledger system, it could revolutionise mortgages by providing secure, transparent, and immutable records. All parties involved in the mortgage process can access a shared, tamper-proof ledger, reducing fraud and errors. Smart contracts could automate verification processes, streamline documentation, and ensure compliance, fostering inclusivity and resilience in the market.

Technology will expedite personalised solutions. Advanced platforms for lifetime mortgage management will merge mortgage data and market trends into a single accessible interface, offering a comprehensive customer view. 

The future of mortgages

The future is bright, and it lies at the intersection of innovation, technology, and experience. Armed with real-time data, personalised insights, and intuitive tools, first-time buyers can navigate the homeownership journey with confidence and clarity. 

Lenders must remain agile and responsive to changing dynamics. Those who embrace innovation, adapt to market shifts, and prioritise customer needs will be well-positioned to thrive. 

Find out more:

Is outdated tech or a lack of expertise holding back your innovation? See how Mortgage Hub enhances customer experiences from origination onwards. Visit: here

This article was first published in the latest edition of Society Matters magazine.