Digitalisation has been a hot topic of conversation for many years. However, from the outside at least, it could be said that sections of the mortgage journey haven’t moved on as quickly as anticipated, especially when compared to other sectors across financial services.
In fairness, this is not an unreasonable viewpoint. Some areas have seen a longer and slower tech trajectory than may be expected and much of this is due to what always has been an incredibly complex process becoming even more, well, complex.
Having said that, many established firms are working hard to adapt to a more digitalised world and meet the changing demands of increasingly tech savvy younger and older generations. New entrants and disrupters also continue to challenge the equilibrium and lockdown certainly accelerated the digitisation trajectory.
Intermediary firms have had to adapt to virtual appointments rather than face-to-face and there is now a heavier reliance on a range of tech tools to better service their client needs.
Estate agents also adapted quickly with the rise of virtual property tours. This will certainly prove a useful tool moving forward when it comes to better managing their time and even in terms of helping to weed out the more serious buyers from those let’s say ‘inquisitive’ ones.
The past few years have seen the emergence of challenger banks and a host of digital lenders, and I can only imagine that this new breed of lender will continue to emerge. Here at Dynamo, we recently added Molo to our distribution panel on the back of its recent launch into the homes in multiple occupancy space and its plans to expand further into the buy-to-let market after raising £266m in its latest round of funding.
It’s always interesting to hear how different types of BTL lenders are utilising tech to service the ever-changing demands of borrowers and adapting to current market conditions. During the lockdown we saw an increased reliance on AVMs and this will prove to be an increased focal point for many lenders, with the obvious physical surveying caveat that comes with more complex cases or higher LTV lending restrictions.
We have also seen great strides in how different types of data are being electronically transferred and verified in a secure and transparent manner, although this remains far from perfect and remains an ongoing project for many lenders.
When it comes to data and accessibility, open banking is an interesting area for the BTL market. This is a facility which can help support a more accurate and extensive array of data which the more professional end of the landlord scale may need to supply to lenders so they can gain a better understanding of their finances, demands and future borrowing requirements.
Improving how advisers and lenders access and analyse relevant information has huge timesaving benefits. Interpreting and managing this data in the right way also offers the platform for BTL lenders to facilitate product and criteria innovation – in a responsible and risk sensitive manner – whilst allowing advisers to better support landlord clients along the way.
Digitalisation and the BTL market have not always had the most harmonious of relationships, but this has improved dramatically in recent times and it will continue to play an integral role for landlords, lenders and advisers in 2021 and beyond.
Ying Tan, founder and chief executive, Dynamo
