Wider speculation regarding the future of the housing market has some hypothesising price contractions and fall in demand over the long term, leading to increased worry for current or prospective homeowners.

While the news picture might seem bleak, industry data shows that that an increase in arrears or a fall in demand is not happening – yet. However, it’s important for lenders to be ready to support their customers during such volatile times.

Customers need sound advice 

The past few months have been turbulent. Thousands of products were pulled in September, leaving many customers unsure regarding the status of their mortgages.

As the market settles, customers still need help to understand what their future repayments will look like in the new higher interest rate environment and for those coming to the end of fixed rate deals. A personalised approach to providing guidance and advice during an uncertain market will be key for lenders. Providing solutions tailored to customers’ individual situations will be just as critical.

The new Consumer Duty (with a deadline of July 2023, or July 2024 for closed products) sets out rules for lenders to put customer needs first. The Duty gives clearer standards on how to present information to customers in a more understandable way. Why is this important?

With the current cost-of-living crisis, it’s critical that customers are properly informed on all aspects of a product versus just receiving advice, so they can make educated decisions about their choices and future. Regulators want improvement on how information is provided on products, services, price, and value, in order to prioritise consumer understanding and support. This is more important than ever given the state of the market and to help protect customers when facing future uncertainty.

In this environment, slow processes shouldn’t complicate matters further

Given the state of the market and the fact that lenders need to comply with the new Consumer Duty, the last thing customers need is a slow and cumbersome application process that provides no updates or transparency into the status of their mortgage or application. Lenders need to provide a clear and informed customer experience; the process doesn’t need to be made any more painful.

Lenders are well on the way, or aware of the need, to transform their legacy technology or manual processes. The benefits are clear:

• Consolidated systems and data
• Automated low complexity tasks
• Faster, straight-through processing
• A clearer picture of the customer
• Timely, relevant updates on application status

As well as complying with regulation, an improved customer experience will serve lenders in the long term by driving loyalty and making them more competitive. Now is not the time to pause on transformation initiatives. In fact, it’s more crucial than ever to speed up.

Prioritising tech decisions

A single, digital platform can help achieve these types of results. At a minimum, by automating repetitive, administrative tasks, scanning documents and digitally extracting data and auto filing information, the need for manual and repetitive data entry is eliminated. This leaves brokers and mortgage advisors with more time for customers where they can provide valuable advice when it’s needed.

To take this a step further, lenders should integrate value-adding functionality along the end-to-end mortgage journey, building in customer experience enhancements as they go. For example, AVM, Open Banking income verification and credit decisioning technology can improve the application experience for customers, but also help build a more accurate picture of affordability for lenders.

By utilising workflow automation and incorporating data and insights into customer journeys, lenders can provide valuable advice to customers at a time when it is sorely needed, and offer a more personalised, high-quality service to attract new borrowers and secure customer loyalty over the long term.

nCino is proud to sponsor this year’s UK Finance Annual Mortgage Dinner on 7 December. Learn more about how nCino is transforming mortgage lending or download our brochure.