How technology helps growth and customer excellence in equity release

As the equity release market returns to growth, lenders continue considering how technology can support business growth while maintaining operational efficiencies and first-class customer service.

The opinions expressed here are those of the authors. They do not necessarily reflect the views or positions of UK Finance or its members.

Many lenders have spent time and effort rightly creating USPs around the originations process by taking advantage of the new originations software that has come to market in the last couple of years, or by building out their own capabilities through internal development. In some cases, it is a mix of the two, 

The market is now looking at the latest post-completion servicing software as a further way of driving down operational costs and to ensure the end user experience is as seamless as possible.   

A growing market full of potential

The Q2 later life mortgage lending figures from UK Finance showed an 11 per cent increase in new lifetime mortgage advances - from 5,060 in Q1 to 5,610 in Q2. 

During the same quarter, the Equity Release Council (ERC) reported a 15 per cent rise in the value of equity release lending, which now stands at £578 million.  

This is a great foundation for renewed growth in this important sector.

What’s more, according to the ERC, recovering house prices in the first half of 2024 have lifted the value of the UK’s property equity to a record-breaking £5.7 trillion. Of that number, the ERC estimates that the over 55s hold an average of £321,213 worth of equity in their homes and make up more than half (55 per cent) of all homeowners. 

Importantly, there is today more trust in the equity release market than previously, helped mainly by FCA regulation and the ERC’s strict code of conduct. 

As with every growing sector, however, there is always the challenge of managing that growth, while maintaining customer service excellence.  This is why lenders are now ensuring they review suppliers to ensure their servicing platforms are fit for purpose to accommodate future growth. 

How technology can help

Flexible API ecosystems

Technology should be able to utilise API technology to move data between a lender’s servicing systems. This not only provides seamless integration with originations platforms and borrower self-serve portals, but also other internal systems such as general ledger, treasury and data warehouses and business intelligence solutions. 

Today, two-way APIs can also assist in returning relevant information back into originations platforms to assist in automating traditionally manual processes such as further advances and drawdowns as much as is possible. The Phoebus API ecosystem delivers this for our clients. 

Automated migration

The market is seeing multiple movements of equity release books between asset owners and third-party servicers. APIs have now been developed to automate the migration processes. 

Using our API, Phoebus clients have  migrated books within six to nine weeks, which is exceptional in the industry. This technology not only makes such transactions more attractive, but also hugely de-risks transformation programmes where lenders are changing servicing technology suppliers. 

At the cutting edge of  this technology, a lender can handle their own migrations with little or no support from their technology provider. This creates a significant cost-saving compared to a service that has no migration capability - manual or otherwise. 

Find out how lifetime mortgage lender Pure Retirement used Phoebus APIs to migrate their £1.2bn portfolio – click here. 

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