Key Consumer Duty developments and recent communications issued by both AMI and the FCA, with commentary on implications for mortgage intermediary firms…
Several large broker firms have launched or are about to launch their own online offerings for consumers wishing to transact on their computer or by mobile. However, what has been noticeable about these offerings is the decisive move to offer a hybrid model that affords customers the best of both online and face-to-face advice. Largely this is delivered through a mixture of automated mobile interaction supplemented with tailored advice over the phone. Combining personal advice with the best of technology has always been the approach favoured by AMI as it reflects more accurately the needs of the borrower.
Simultaneously, newer entrants to this market which had been focused on delivering fully automated advice appear to be favouring this hybrid model as well, with a noticeable shift away from the so-called benefits of removing all human interaction in the mortgage advice process. Those that have not made this adjustment have been forced to abandon customer-facing propositions.
There is an additional advantage to delivering a hybrid model. Lenders have anecdotally noted a higher instance of potential fraud flags in cases submitted online without human touch points. Whether this is a failure of the technology to catch these applications or simply those trying to commit fraud exploiting this technology is unclear. However, it is a trend the industry must be mindful of: it is damaging to progress across the sector if technology is failing to deliver and, indeed, improve case quality.
Customers too have high expectations of the experience they are entitled to in the mortgage application process. The industry must continue to develop ways to meet these expectations, but without compromising the end result for the customer – that they exit the advice process with the most appropriate mortgage for what they need, not what they think they want.
Senior Policy Adviser