Five mortgage tech trends transforming consumer lending

Five Mortgage Tech Trends Transforming Consumer Lending
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The mortgage lending market is experiencing unprecedented growth. Since post-pandemic customers have different financial expectations, and interest rates have been at their lowest level since 2007, due to providing a personal, automated and responsive experience has become vital for lenders in maintaining a competitive edge.

Mortgage lenders must adopt mortgage technology that will best assist them in meeting changing customer needs by using machine learning (ML), artificial intelligence (AI), APIs and robotic process automation (RPA),

Here is our most recent insight, examining five trending technologies that are shifting fintech landscapes and their influence on mortgage lenders, with regards to growth and the customer experience.

Financial data can be accessed more easily through open banking

There was a significant shift in UK banking laws in 2018. Banks were legally required to release their customers’ payment information to third parties, providing a significant opportunity for SMEs and startups to create new financial products.

In the mortgage industry, open banking is helping to streamline the lending process from application to closing. It can also increase profits by reducing administration costs by collecting and analysing fewer data points.

With open banking, lending brokers can make better decisions by automating the matching between lenders and borrowers.

By 2020, online banking accounted for 76% of bank transactions in the UK, up from 30% in 2007. More than 3 million businesses and consumers use open banking products in the UK today, and mortgage success will depend on lenders’ ability to use open banking tools for improved customer service, efficiency and scalability.

2. Repetitive tasks can be managed by process automation

In a report on business automation in 2021, Zapier found that 90% of knowledge workers believe that automation has helped their work-life, and 75% would recommend it to other businesses.

There is a lot of repetition involved in mortgage lending and many forms and regulatory compliance that the company’s employees must do.

Embracing mortgage technology and digital transformation, including mobile applications, paperless processing and analytics, can help lenders realise the following benefits:

  • Saving time
  • Reduced costs
  • Increasing productivity
  • Keeping errors to a minimum
  • Process standardisation
  • Efficient use of resources
  • Maintaining compliance
  • Managing documents effectively
  • Auditable records are more visible and transparent

The industry can significantly benefit from process automation since it reduces employees’ administrative workloads and allows them to use their skills, knowledge and expertise to serve clients more effectively.

3. Analytics and big data improve customer insight

According to a report by the World Economic Forum, approximately 212,765,957 DVDs of data will be created every day by 2025.

Today’s financial market relies heavily on data and analytics, and mortgage lenders who don’t use these tools effectively are missing out on opportunities to grow, control costs, and minimise risk.

Data-centricity allows mortgage lenders to examine loan applications to a much greater degree, enabling them to dig into customer profiles at a granular level through tools that do more than compile databases based on databases and use additional information available in the public domain like tweets and news clippings.

Lenders can better understand their customers’ financial behaviour and their likelihood of maintaining repayments by mining and analysing data sources. As a result, mortgage lenders will be able to service their accounts better and will be able to detect mortgage fraud more effectively.

With more data, banks can make better-informed decisions, and by analysing emerging market trends and improving profitability through data analysis, they can be more proactive, efficient, and responsive.

4. Use of AI and ML for risk analysis

The mortgage industry is undergoing significant changes due to AI and machine learning. In a Forbes survey, 55% of executives said artificial intelligence would make their company and the mortgage lending industry more competitive. In addition, 59% of respondents say that AI’s impact on the industry is now a key factor in strategic decision-making.

Automating manual tasks using ML can help lenders improve accuracy, decrease costs, and increase efficiency by automating everything from chatbots to forecasting to credit assessment. For credit compliance, ML requires specific management. Still, while it appears to be a black box unable to explain why a decision was made, advanced, cutting-edge solutions address this problem.

A mortgage lender’s ability to determine a borrower’s creditworthiness and the likelihood of default increases as they learn more about the borrower. Technology can help analyse mortgage risk resulting in more accurate and efficient loan decisions and streamlining the loan application process.

5. APIs enable seamless mortgage transactions

APIs are being used more and more across financial industries. A RapidAPI Developer survey, conducted at the end of 2020, found that 69% of respondents expected that API usage would increase in 2020 compared to 2019.

Mortgage lenders keen to stay competitive are turning to APIs to stay ahead of the competition. APIs can be used directly for communications with customers and made available for any business wishing to develop a connection or interface to their product, thus rapidly and efficiently introducing new and innovative mortgage products.

Different APIs provide different capabilities, such as querying data, updating a database, or adding functionality to a software application.

Currently, mortgage companies leverage them to achieve the functionality they need and create a technological ecosystem in which systems are automatically connected. Mortgage lenders can also take advantage of different platforms to choose the functionality that best fits their needs.

Workflow automation is one of the essential benefits APIs provide, assisting in reducing errors, staff hours and costs and allowing borrowers to access loan information and statements sooner. Mortgage lenders can offer seamless mortgage experiences by using the right platform that enables the integration of multiple systems or applications.

How ROSHI’s Home Loan Marketplace Sofware can help

Partnering with the right software provider is vital for any mortgage lender who lacks the time and resources and seeks efficiencies at scale via the use of automation, data and AI.

At ROSHI, we understand the importance of delivering hyper-personalised and instantly accessible mortgage solutions while giving lending partners the ability to scale their operations more effectively, reduce operational expenses, improve customer satisfaction and successfully move into the digital transformation of banking. Find out more about ROSHI and how lenders can leverage their home loan marketplace platform.


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