Mortgage sourcing systems – it’s all about accuracy
Since the first mortgage sourcing system was built in 1986, their capabilities, not to mention brokers' attitude towards them, has changed out of all recognition.
An idea that in its infancy relied on receiving software updates and product data on floppy discs through the Royal Mail has now been transformed into a dynamic, fast moving programme.
Systems now boast up to the second whole-of-market information, guaranteed accuracy and software and data updates that can be automatically uploaded.
And sourcing systems now do much more than just source. They are an invaluable aid within the sales and compliance process , used to produce personalised illustrations, best buy tables and allow brokers to complete much of the mortgage search and selection process through one screen.
All these improvements have led to mortgage sourcing systems moving from the status of a ‘nice to have’ in broker circles to becoming absolutely essential and one of the most relied upon weapons in their armoury.
Today's systems represent a massive evolutionary leap from their launch 28 years ago. And yet in all that time one aspect hasn't changed: accuracy is still king.
In a survey carried out by Mortgage Brain, 94 per cent of brokers said that accuracy was the single most important factor when selecting a sourcing system.
It's surprising in some ways that the figure isn't higher. You can have the fastest, most flexible, easiest to use system in the world. If it's churning out duff information, however, it won't be long until you find your customer base denuded and the FCA knocking on your door to demand answers.
As such, whether it's lenders wanting to get their latest products in front of brokers, brokers wanting to offer their customers the widest possible choice, or the mortgage technology industry wanting to develop mortgage systems that will be popular with users as a whole, accuracy is at the forefront of everyone’s mind.
And yet increased accuracy and checking is a relatively recent phenomenon.
The first steps were taken by Mortgage Brain in 2003 with the idea of pro-active product verification, which allowed lenders to check data accuracy on its sourcing systems. Product information is entered, then checked and checked again by Mortgage Brain. Lenders then carried out a further verification process to make sure that the main product details were correct.
This additional level of checking was visible to the introducer, with a green traffic light for verified information and a red light for those schemes which had been withdrawn.
A year later, data verification took another step forward as the market’s leading systems became available which offered an accurate process for KFI checking, where the KFIs produced from the sourcing system were checked against those from the lender. A blue square on the screen next to the product in question indicated that KFI verification had taken place.
At around the same time, there was a focus on improving turnaround times for new products by electronic provision of product information and loading products ahead of them becoming available. The process of getting a new product to the broker, which in the days of disk-by-post could easily have taken a week, was now reduced to a few hours.
Six years on and such accuracy and speed has become the norm for some, but alas, not for all. Mortgage products on the market leading systems are now updated and checked for accuracy twice a day. The very best systems now turn round almost all products within four hours of the information being received from lenders.
And what of the future?
Given that system accuracy was and is so important to the mortgage industry as a whole, it should come as no surprise that the march towards accuracy is being driven by brokers, lenders, consumers and the FCA as much as the software developers themselves.
As regulation has grown tighter, competition from other sources expanded and consumer demands increased, everyone has been asking for information on which they can rely. And asking for it to be faster and more accessible.
New rules emanating from the Mortgage Market Review have put a further premium on accuracy and it seems unlikely that the FCA will be backing off any time soon.
Mobile apps for brokers and consumers, allowing both to access information on the go, have increasingly become the norm and it won't be long before they become ubiquitous.
For all these advances, accuracy remains key to their success. Systems that leave brokers vulnerable to losing customers or investigation by the FCA because they deliver inaccurate information will soon wither. It is up to the purveyors of such systems to ensure they don't lose sight of that in their quest for innovation.
*Mark Lofthouse is CEO of Mortgage Brain, the mortgage technology solutions provider. He can be contacted on: 01527 557203 or firstname.lastname@example.org.