By Chris Williams, Strategy & Transformation Partner, Novus Strategy

The UK mortgage market has a problem that more technology won't fix.

That's the central argument of Novus Strategy’s latest white paper: Beyond Digital Maturity in UK Home Buying and Selling: How Horizontal Digital Integration Unlocks Smart Data and Economic Value.

While its implications reach across the whole transaction ecosystem, we think building societies have a particular reason to pay attention and a particular opportunity to act.

The market has reached a significant level of digital maturity. Lenders, conveyancers, brokers and data providers have invested heavily in digitisation over the past decade. Identity verification, automated decisioning, digital case management and electronic signatures are now becoming standard across much of the sector. By any conventional measure, the sector has transformed.

And yet the outcomes that matter haven't moved. The average time from offer to completion sits around four months. Average fall-through rates remain around 30%. Consumers are still asked to provide the same documents multiple times. Professionals are still chasing updates. Capital is still locked in slow, uncertain pipelines.

This isn't a technology failure. It's a configuration failure. 

Digital transformation has happened vertically within individual organisations, within silos. But the mortgage journey doesn't exist vertically. It moves horizontally, across brokers, lenders, conveyancers, valuers and surveyors. Every time a transaction crosses an organisational boundary, friction emerges; data can be incomplete, incompatible, conflicting and open for interpretation. There is inefficiency in re-keying, manual data entry, repeated verification and requests for information. The result is slow decisions being made without full visibility of what's happening upstream or downstream.

The solution isn't more digitisation. It's Horizontal Digital Integration: an operating model that allows digitally mature participants to coordinate data, decisions and workflows across those boundaries, so that the transaction moves as a connected whole rather than a sequence of disconnected handoffs.
Smart Data and Trust Frameworks are creating the regulatory and technical conditions for verified information to be shared across the ecosystem. But those frameworks alone don't determine outcomes. HDI is the operating model that operationalises them, enabling data to move across organisational boundaries in a way that actually changes how transactions flow.

Why this matters differently for building societies

Building societies occupy a distinctive strategic position in the UK mortgage market. They have genuine growth ambitions, meaningful market presence, and stronger broker relationships than they're given credit for. But they're competing for share in a market where infrastructure has historically been shaped by and for the largest players that account for the majority of gross lending. That context matters, because HDI is the first moment in the market's evolution where that dynamic can meaningfully shift.

This isn't about balance sheet size or technology budget. It's about configuration. 

The big banks carry significant legacy complexity with systems, structures and operating models built for scale in a vertically organised world. Reconfiguring those at pace is genuinely hard. Building societies, by contrast, have an opportunity to move earlier, more deliberately, and to build broker-facing operating models that can be structurally difficult to replicate. The society that is faster, easier and more reliable to work with doesn't need to outspend the competition. It needs to out-configure it.

But that only becomes possible if the foundations are right. And that's where growth strategy and transformation strategy must be considered together. 

Growth is a line on every building society's strategy. But driving growth on top of an inefficient system is extraordinarily difficult because the operational cost of managing a slow, friction-heavy pipeline, with capital locked up in protracted completions, will absorb the gains before they materialise. You can win more cases and still find yourself no better off if the system underneath isn't built to handle them efficiently.

This is true whether a society is looking to grow market share within its existing product set and risk appetite, or expand into new segments. Either way, the foundations for growth need to shift. Vertical process improvement and local digital enhancement have delivered gains, but they've reached their natural limit. The next phase requires horizontal transformation; reconfiguring how a lender operates across the full journey, and how it connects outward into the ecosystem that surrounds it. That's where scale becomes possible.

And with the broker channel being a key route to case volume, this ultimately comes down to three things: speed, ease and reduced friction. Brokers decide where cases go, shaped by experience of which lenders are predictable, responsive and straightforward to work with. Speed to offer, speed to completion and reduced fall-through aren't just efficiency metrics. They are the reputation a building society builds in the broker market, and that reputation is what drives volume.

The broker channel as a core growth driver

Whether brokers actively choose and keep choosing to send cases to you isn’t a technology problem. It's a coordination problem. 

What currently happens between a broker and a lender is often a source of friction that's easy to underestimate from the inside. When cases arrive, a significant proportion come back requesting more information before underwriting can progress. Each of those return trips is time, uncertainty and a signal to the broker that a lender's process is unpredictable.

Brokers build mental models of which lenders are easy to work with. Those models determine case flow far more than any BDM relationship or rate comparison can overcome on its own. When verified information can move reliably, when identity is established once and travels with the case, and when the broker has visibility of where things stand without chasing, the experience of dealing with that lender changes. It becomes predictable. It becomes worth recommending.

For societies of all sizes, being easier to work with isn't a soft aspiration. It's a competitive position.

The first mover question

There's a legitimate question about sequencing. Some elements of HDI will mature over time, shaped by regulatory development and the broader market's readiness. Building societies might reasonably ask whether the right move is to wait for that infrastructure and plug in later.

But the broker-facing and operating model dimensions of this don't require anyone else to go first. The building societies that invest now in the conditions that make coordination possible; journey ownership, shared data definitions, workflows designed around outcomes rather than handoffs, real transparency, are the ones that will be positioned to capitalise on ecosystem infrastructure as it develops, rather than trying to retrofit it once the market has moved on without them.

A building society that gets its operating model right and can demonstrate to the broker market that it is genuinely easier, faster and more reliable to work with, has a story that the largest lenders find structurally harder to tell. That's not a small opportunity.

Why now

The white paper sets out clearly what the coordination problem is, why further digitisation alone won't solve it, and what the structural conditions for moving beyond it look like. It also sets out how Smart Data and Trust Frameworks, which are advancing quickly, can only deliver their full potential when operationalised through an integration model that works across the ecosystem, not just within individual organisations. It's intended to help building societies and the wider market think about transformation not as a technology question, but as a configuration question.

Growth requires foundations. The societies that build those foundations now, while the market is still in the early stages of horizontal digital integration, will be better placed to grow efficiently, to serve brokers well,and to compete, not just within the building society sector, but across the market as a whole.

Read the White Paper: Beyond Digital Maturity in UK Home Buying and Selling: How Horizontal Digital Integration Unlocks Smart Data and Economic Value