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THE MORTGAGE MARKET NEEDS TO UP ITS AUTOMATION GAME, NOW MORE THAN EVER

Richard Carter, Managing Director of Equiniti Credit Services, explores how adopting open technologies can help mortgage providers accelerate their digital transformation, improve customer services and boost their recovery in a post-COVID-19 world.

 

In terms of technology adoption, it is widely acknowledged that the mortgage market lags behind the consumer credit sector. The COVID-19 pandemic in particular has highlighted the need for lenders to boost their automation capabilities to enable better digital services for customers, enhance their risk management capabilities and streamline their operations to aid recovery.

As the impact of COVID-19 has been felt across the country, mortgage providers deserve recognition. They have acted quickly to assist their customers in this time of crisis, granting payment holidays to a staggering one in nine mortgage holders since the UK’s lockdown began. But such unique and (almost) overnight demand pressure-tested lenders’ operations, with some customers complaining about being put on hold for hours, as staff grapple to support as many callers as possible. Official advice from UK Finance[i] has warned consumers that ‘telephone lines remain extremely busy’ and advises them instead to turn to their lender’s website as a first port of call.

Those mortgage providers that have already set out on the road to digital transformation have been able to perform better, communicating more effectively and offering their customers a level of autonomy through automated self-service facilities. As with any service sector, customers remember the experience just as much, or sometimes more, than ultimate benefit gained. Although no-one can yet say for sure what the post-pandemic world will look like, it is fair to anticipate higher demand for seamless digital services.

The mortgage market, therefore, needs to up its automation game to prepare for what lies ahead.

Encumbered by their legacy systems, mortgage providers need to think strategically about how they can bridge between their existing infrastructure and the ability to deliver new, consumer-centric service offerings, all while reducing costs to recover lost income. In this instance, finding the right technology partner can unlock a number of significant benefits throughout the entire lifecycle of the mortgage management process.

 

Servicing existing customers

As households begin to get back on track, those who took mortgage holidays will need to have clear sight of how their payments terms that have changed. Others may be looking at how they can release equity from their existing mortgages to support family or secure themselves against any future financial crises, some may want to switch products entirely to secure more stable interest rates. All these scenarios will create additional administration for mortgage providers already contending with outdated internal processes or outsourced servicing platforms. Integrating API-led technology into their existing systems will enable mortgage providers to simplify these complexities and reduce the operating costs associated with mortgage management through increased process automation.

With social distancing measures likely to impact human interactions for months, perhaps years, after lockdown has been lifted, we are also likely to see an increased demand for remote access and self-service environments from existing customers. Mortgage providers have been traditionally been slow to adapt to consumers’ demand for fast, online access to their accounts, which is the norm across other areas of the credit industry. Granting access to digital self-service environments, where customers can manage their own accounts and make payments will create both internal efficiencies for lenders and give customers added reassurance that they are in control.

By integrating API-led platforms now, lenders can also ready themselves to launch new, consumer-centric services enabled by artificial intelligence (AI) and open banking data. Consumer research[1] conducted by Equiniti Credit Services pre-pandemic, found that just 40% of those surveyed said they would be unwilling to give a lender temporary access to their bank transaction history if it could lead to a better, more personalised mortgage rate. With only 12% saying they would seek the advice of a broker when their mortgage deal comes to an end, open banking data not only opens up the chance to keep customers once their current period has ended but also creates an opportunity for lenders to deliver, more flexible and tailored products. Imagine a mortgage product that could flex according to life circumstances offering holidays and flexible payment terms to suit different life stages.

 

Creating an end-to-end process

Such technologies can also support efficiencies in the mortgage application process. Currently dominated by intermediaries, who require lengthy face-to-face appointments to support applications, social distancing may see a move to increased remote application processes either as a result of extended measures or through consumer cautiousness. Open banking data, integrated via API-led platforms, could create opportunities for real-time affordability assessments, derived from bank account data, transforming the current admin and paper heavy process. Only 26% of those questioned in our research study said they would not trust AI tools to determine their credit worthiness, showing that consumer willingness to accept such services already exists.

 

Planning and remaining complaint

Any event on the scale of COVID-19 offers a chance to integrate learnings into future scenario planning. Having a contingency and risk assessment for pandemics and other incidents will certainly be on the agenda, both for internal stakeholders and regulators alike. We expect to see stricter regulations on lenders’ reporting practices. Choosing a technology platform that provides access to real-time data monitoring tools, as well as FCA-regulated personnel, can help lenders to quickly identify and responsibly manage risk and remain compliant the throughout the mortgage life cycle.

 

Finding the right partner

While supporting customers must remain the key focus, mortgage providers need also to prepare for what’s to come. With this in mind, the mortgage market can no longer afford to be behind the curve. Finding a partner that can integrate an open platform which is adaptable and flexible to accommodate in-house origination systems will be a key factor in post-lockdown preparation. This will arm mortgage providers with the tools they need to adapt to the new market dynamics, and launch competitive new services while remaining compliant with the sector’s regulation.

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RISK AND INVESTMENT SPECIALIST, CARDANO, TAKES TO DOCUMENT AND EMAIL MANAGEMENT IN THE CLOUD WITH ASCERTUS AS IMPLEMENTATION PARTNER

Ascertus also providing document comparison tool, compareDocs 

 

Cardano, a privately-owned, purpose-built risk and investment specialist, has chosen Ascertus Limited as its implementation partner to deploy document and email management platform, iManage Cloud. Once implemented, iManage Cloud will securely centralise, store and structure over 10 years’ worth of documents in the firm’s corporate legal department, giving users including lawyers, the legal assistant and the compliance officer access to the content from anywhere and any device. The document comparison tool, compareDocs, will also be seamlessly integrated with the iManage solution. Ascertus provides tailored information and document lifecycle management solutions, on-premises and in the cloud, to professional services firms and corporate legal departments across the UK and Europe.

“In keeping with our business growth, including the assets under management, our legal team has expanded too, making document management essential for the legal department’s operation,” explains Miriam Lindsay, Senior Legal Counsel, Cardano. “Presently, we have a shared folder system for documents. Additionally, everyone uses their email inboxes to store information in a string of folders that potentially run into the 100s. It’s an inefficient way of keeping documents and requires a lot of time which could be better focused elsewhere.”

Cardano selected Ascertus as its implementation partner following recommendation. Ascertus is currently working closely with Cardano’s legal department to design and configure iManage Cloud so that the platform delivers efficiency and productivity gains to the users. For ease of information sharing, the folder structure in the iManage platform is being streamlined. Tags and metadata are being used to index content and facilitate search. The system will automatically assign numbers to documents in iManage Cloud for easy trackability.  iManage Cloud is being fully integrated with Microsoft Office 365, to enable users to save documents and emails directly from Outlook and Word into the document and email management platform. Users will have visibility of the documents and emails that have already been filed in the system, directly from their Outlook inboxes, saving them time and ensuring that there are no duplicate files residing in iManage Cloud.

“It’s clear to us that the Ascertus team has sound knowledge of iManage Cloud,” adds Lindsay. “They are working with us patiently and systematically to meet our system requirements. Their approach to working is very straightforward and professional – with a lot of emphasis on attention to detail.”

Ascertus is also providing Cardano with compareDocs, which seamlessly integrates with iManage Cloud. Users at Cardano will be able to compare any file type, review accept and reject changes in a live Word document and save it back to iManage Cloud.

“Due to the large volume of files that a corporate legal department has to deal with, the lack of document and email management capability can be hugely frustrating for lawyers,” comments Jon Wainwright, Sales and Marketing Director of Ascertus Limited. “Once deployed, iManage Cloud will deliver significant efficiency and productivity gains to the individuals as well as streamline the department’s operation to a large extent.”

 

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RISE IN E-COMMERCE FOR SMALL BUSINESSES IS A BIGGER RISK THAN JUST STOCK CONTROL

  • With consumer confidence in the high street at an all-time low, many SME shops and businesses have moved to online retail
  • Online retail sales rose by record 19.7% between April and May 2020
  • SMEs lack of IT knowledge, experience and skills could lead to potential online dangers from hackers obtaining personal data and fraudsters posing as you.

 

The high street, having already suffered a dramatic decrease in popularity, has struggled to return to pre-COVID sales figures, but is showing some signs of improvement. When non-essential shops were forced to close during lockdown, consumers were forced online.

For some SMEs this was devastating for their retail outlets and businesses. However keen entrepreneurs were driven to adjust their businesses to survive this crisis and technology became their saviour. According to the ONS Monthly Business Survey for May 2020[1], online retail for all sectors rose by 19.7% in May compared to April 2020, for many reaching this market was the only way to save their businesses. A staggering 85,000 stores appearing online in the three months to July 2020. However, business owners are being urged to review their online presence considering security issues posed with ecommerce trading.

ILUX, a leading IT systems, support and service company has been looking at the potential implications of inexperienced company owners launching their online presence. James Tilbury, managing director comments: “The pandemic and the lockdown has been the biggest pressure any company owner is likely to ever face. Even with the government support available, many would not have survived this time without shifting focus and identifying what can be done to save their business. Ecommerce offers endless opportunities, nationally and even internationally, to grow your business from a small shop or two, to a profitable and effective online store. But it does not come without risks.”

Worryingly, 32% of SMEs have been the target of cyber scams or malware with half of 5,000 SMEs surveyed by Sage[i], worried about their business being at a bigger risk since going online. However, only 6% would be investing in additional security.

ILUX, after reading these statistics, have realised some small business need some IT education. The company has produced some top tips to improve online security – for some immediate peace of mind. As a small business, the reputational and financial impact of a situation like a data breach will be destructive for a business, no matter how stable you think you are.

 

UNDERSTANDING DATA THAT SHOULD NOT BE SHARED

As a smaller business you may be working with just a few members of staff, but it is essential that they know what data is sensitive and what should not be shared. Training your staff could prevent internal data breaches, especially when it comes to GDPR (UK-GDPR from 2021). If your ecommerce site is hosted on Shopify, this data would be protected and should not be downloaded or shared.

 

SECURITY PROTECTION AND UPDATES ON LOCAL COMPUTERS

Although this is common sense, it is disturbing how many companies have out-of-date and even obsolete security software on their local computers. All anti-virus and malware software should be updated regularly. If a company has multiple devices in various locations, owners should set a reminder to ensure staff are checking for updates and make sure all software, when installed, is set to perform them automatically. Invest in trusted and quality products, you will get what you pay for, using a free platform when you are handling personal data is not recommended.

 

ENCRYPTION

Encrypt all your sensitive data at rest and in transit. Use of encryption allows only those with access to decrypt the contents of the file that has been converted using a special “key”. This means that even emails which are sent to other parties with personal data in them, or when you are uploading shipping address details to couriers, they are safe from anyone trying to intercept the data.

 

CYBER ESSENTIALS

Cyber Essentials is a simple but effective, Government backed scheme that will help you to protect your organisation, whatever its size, against a whole range of the most common cyber-attacks. Certification gives you peace of mind that your defences will protect against most common cyber-attacks – simply because these attacks are looking for targets without Cyber Essentials technical controls in place.

 

HOUSEKEEPING

As mentioned above, updates are essential for all software. Consider two-step verification too – to provide that extra layer of security. Encourage your staff to update localised passwords frequently – monthly is acceptable. Educate staff on identifying harmful emails – do not follow links or enter account information on anything received in an email. Ensure all networked passwords are secure and impossible to predict – change them regularly and only allow single person access per machine. Audit your systems regularly, and where you can, use external sources to review and monitor the company systems – the extra set of eyes can make all the difference.

James continues: “Online security should be risk assessed at the earliest convenience. If a small business owner has rushed to complete their transition to online, now is the time to sit back and analyse how robust those systems are. It is not as simple as logging into a Shopify account for instance – careful consideration is essential for all devices – whether that is PCs, laptops, tablets, and even mobile phones that handle any data. A customer data breach could be a costly exercise for the business – not just the financial implications, but this could become legal and involve larges fines for the business. Either way it will be detrimental to the business’ reputation. I would advise that all SMEs who are now selling online to bring in an external, professional and specialist set of eyes to overhaul your systems and protect you for the future.”

Businesses who have delved into ecommerce – and are concerned about the systems that have in place – are welcome to contact ILUX – they will be able to discuss the minimum requirements and offer some insight and support.

 

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