2024: Choosing the right product transfer

Data from UK Finance reveals that 1.6 million mortgage customers will reach the end of their deal in 2024.

Given the massive influx of borrowers looking to remortgage, lenders must take full advantage of technology to help deliver innovative solutions that ensure consumers can access the most suitable product transfers in this rapidly evolving market.

Making the right decision

At a time when many customers find themselves at a crossroads with their lender offering an overwhelming array of product options to consider, technology must be utilised to support decision-making. Of course, some customers may choose to change lenders to access another deal, and when a professional adviser recommends taking this step, it is often the most prudent financial move.

But increasingly, the most popular choice among remortgagers is, indeed, the product transfer. According to data published by UK Finance, in Q2 2023 84% of remortgagers remained with their current lender instead of moving elsewhere. This marked a significant increase from last year when the average for 2022 as a whole was 77%. Product transfers are often attractive because the solution allows consumers to avoid prepayment penalties should they refinance with a new lender and can offer greater speed and stability as well as reduce paperwork.

Advanced tech and strong communication are key

Today, lenders can use sophisticated sourcing tools to match borrowers with mortgage deals available on the market, tailored to their unique financial circumstances. Consumers may be tempted to speed through the remortgage process as quickly as possible, however, the consequences of a rushed remortgage can be damaging, and lenders should guide consumers carefully to the most well-informed decisions possible – using technology to do the heavy lifting.

It follows that lenders should invest in communications tools to boost customers’ awareness of their financial options. AI-powered chatbots, for instance, are a helpful way to stay in regular contact with customers, and lenders can leverage interaction histories to provide customers with a more personalised service. Lenders should utilise these tools amid the current economic climate to emphasise the advantages of a product transfer such as increased efficiency.

Balancing digitalisation with the personal touch

Good service means cultivating long-term personal relationships with customers – only then will lenders be best placed to have frank conversations about borrowers’ remortgaging options. To do this effectively, lenders must balance automated emails with face-to-face meetings and personalised messages, as well as ensure knowledgeable customer service teams are available to answer queries and provide bespoke advice.

The value of financial advice must also not be underestimated. Advisers can offer guidance based on decades of frontline experience but also have access to a diverse range of products through their mortgage club, some of which are not immediately available on the market. Customers may prefer to deal directly with lenders, but they should never close the door to professional financial advice during the mortgage-switching process.

Embracing the future

With interest rates, the cost of living, and macroeconomic factors constantly shifting, lenders need the right tools to evolve services and products accordingly. finova’s Core Banking Platform, Apprivo², facilitates complex affordability modelling for lenders to ensure they are offering the right products at the right rates. Modern software like this allows lenders to self-serve changes, with a built-in decisioning capability, so products can be updated in real-time to meet ongoing requirements. Customers use slick technology every day, whether it’s online shopping or in their workplace. They will expect a similarly seamless experience from their financial service providers, and lenders must update their processes to ensure the end customer receives a smooth experience.

2024 is full of opportunities for lenders to help customers secure tailored product transfer options. The key is to embrace technology to source the best products while communicating the benefits to customers in a way that connects with their situation. Ultimately, using digital tools and remaining agile is how to ensure that the needs of the end customer comes first.

To find out more about how we are helping lenders, please email the team at: info@finova.tech.

Area of expertise: