back Back

How brokers can keep pace with technology and transformation

Brokers, COVID-19, Debt. Capital Markets, Digital Transformation, Investments, Mortgages, Technology, UK

April 19, 2022

  • Brokers
  • COVID-19
  • Debt. Capital Markets

While consumers’ online activity had seen steady growth for years, Covid-19 turbocharged this. In retail, internet transactions as a percentage of total sales hit a high of 38% in January 2021, against 20% before the pandemic, according to the ONS. Even a year later, with all restrictions lifted, they remain at 27%.

by Clare Beardmore, Head of Broker and Propositions, & Jodie White, Head of Product and Transformation, Legal & General Mortgage Club 

Jodie White, Head of Product and Transformation, & Clare Beardmore, Head of Broker and Propositions, Legal & General Mortgage Club

Meanwhile, online banking was already well developed prior to Covid-19. More than three-quarters of adults in Britain used internet banking in the opening months of 2020. Yet open banking services have also witnessed rapid and massive growth over the past two years. January 2020 saw the number of customers using open banking in the UK pass one million. Nine months later, that doubled. Today, there are five million users.

There’s little doubt when it comes to the public’s appetite for digitally-enabled services. Among brokers, however, it’s been more mixed, and uptake varies widely.

But customer expectations are growing. Developments inside and outside the sector are leading to increased expectations for fast, smooth digital experiences. Customers increasingly demand solutions that will make their mortgage journey easier and quicker. And they want to be able to choose how to work with their broker.

Advisers that fail to offer a digital approach and communicate through online channels will only be restricting their ability to reach these customers. In this environment, the bar set by market leaders soon becomes the standard. Those who are yet to offer a range of digital communication channels risk hindering customer retention or may find themselves bogged down with administrative tasks, preventing them from doing what they do best: providing advice.

In short, a strong digital offering is becoming table stakes in the advice sector.

No need to reinvent the wheel

The good news, however, is that brokers don’t have to do this by themselves, and they don’t have to do everything. They’re not technology businesses after all.

Instead, brokers should avoid the gimmicks and look for technology that adds value for themselves and their customers. In most cases, they are one and the same: Technology that reduces inefficiencies in the mortgage process and friction cuts brokers’ costs, as well as the inconvenience and delay for clients.

Any serious adoption of technology must focus on the impact on the end customer. Consequently, a serious examination of existing technology cannot do better than begin with customer relationship management (CRM) systems.

Customer relationship management is critical to the client’s journey. It plays a central role in capturing and managing borrower information and streamlining the loan process. Its importance has meant that a wide range of robust existing systems is currently available. There’s no need to reinvent the wheel – nor even to invest; Legal and General’s Mortgage Club, for instance, provides certain members with free licenses to the Smartr365 technology platform, which includes a comprehensive set of CRM tools.

By automating tasks, eliminating effort, and providing workflows to accelerate the mortgage process, CRM systems are critical to meeting modern customer expectations. However, they can’t and don’t aim to replace the broker.

The human touch

For advice, the human factor is still vital. That’s reflected in the continued dominance of intermediaries in lending. Over seven in ten buyers used an adviser for their most recent purchase. With borrowers facing a sustained rise in interest rates for the first time in a decade, and finances squeezed by rising inflation and a cost of living crisis, that’s not going to change.

CRM technology, however, can boost efficiency and free time for brokers to spend working with clients to find the best solutions. It also promotes continued engagement to enhance retention.

Rather than replacing the broker’s expertise, the technology enhances advice by enabling advisers to apply their knowledge more effectively. To give one example, intuitive checks built into an affordability calculator share a far more complete picture by revealing why certain inbound leads might be failing. That allows intermediaries to offer better-tailored advice to customers.

Crucially, the technology must serve the advice journey, not determine it. The way to avoid that is to integrate digital capabilities in a wider transformation journey focused on using the tools available to meet customer needs and support advice. To do so, brokers must embrace technology, as their customers already have done.

Those that don’t could be bringing the next crisis on themselves.

Previous Article

April 14, 2022

The phase-out of high street bank branches: what does footfall tell us?

Read More
Next Article

April 21, 2022

How tech is helping to build an inclusive financial future

Read More

IBSi News

Hecto Financial, Master Account Management Solution, FinTech, Cross Border Payments, Korea

March 01, 2024


Hecto Financial eases cross-border transactions with new solution

Read More

  • Daily insightful Financial Technology news analysis
  • Weekly snapshots of industry deals, events & insights
  • Weekly global FinTech case study
  • Chart of the Week curated by IBSi’s Research Team
  • Monthly issues of the iconic IBSi FinTech Journal
  • Exclusive invitation to a flagship IBSi on-ground event of your choice

IBSi FinTech Journal

  • Most trusted FinTech journal since 1991
  • Digital monthly issue
  • 60+ pages of research, analysis, interviews, opinions, and rankings
  • Global coverage
Subscribe Now

Other Related Blogs

May 03, 2022

What does Africa’s VC tech boom mean for FinTech innovation in the region?

Read More

January 08, 2021

SIX: Trading in 2020 and hopes for 2021 – the view from Zurich

Read More

January 05, 2021

Lending, Leasing & Asset Financing in a post COVID-19 World

Read More

Related Reports

Sales League Table Report 2023
Know More
Global Digital Banking Vendor & Landscape Report Q4 2023
Know More
Wealth Management & Private Banking Systems Report Q4 2023
Know More
IBSi Spectrum Report: Supply Chain Finance Platforms Q4 2023
Know More
Treasury & Capital Markets Systems Report Q4 2023
Know More