When Barclays’ head of intermediaries Craig Calder first applied for a mortgage, the process was so primitive for someone who's now at the forefront of lending at one the UK’s best-known high street banks.
“Even though I worked in banking and had a pretty good idea the bank I worked for would lend to me, it was at a time when none of these new lending technologies existed. You went through the mortgage application, hit send, and a basic credit score returned an accept or decline.”
Fast forward 20 years and looking at how far developments in the mortgage process have come, the data that lenders had to make a decision on was almost arbitrary. He says:
“It’s a measurement that neither customers or brokers want. Now, with technology, we can take the guess work out and it helps everyone.”
Now, with technology, we can take the guess work out and it helps everyone.
Speaking from Barclays' head office in London’s Canary Wharf, Craig talks openly about the mortgage market, its challenges and how intermediaries are playing a vital role in it.
“Mortgage intermediaries have always been very important to us. We've invested heavily in the channel, recruiting more relationship managers to reach a market that we traditionally are not known for. Other lenders have done things like channel pricing but we offer the same pricing through all channels. At Barclays we don’t load prices for existing customers, have always paid brokers a procuration fee, some lenders have just come into that market. So for us the strategy is all about broadening our strengths and being understood as a full-service lender.”
As a lender who wants to work hand and glove with the market we want to make sure our strategy looks completely right end-to-end.
And how are Barclays using technology to get them there?
“Right now we are rolling out a new front end to our mortgage application process where we’ve reduced the application process to 10-20 minutes for the user, depending on whether it’s a single or joint application. We are striving at every part of the journey to make that application journey really smooth for customers and brokers.
“The latest buzz is around APIs (application programming interfaces). We are working on a strategy to deliver functionality for brokers, large or small, that makes their lives easier. As a lender who wants to work hand and glove with the market we want to make sure our strategy looks completely right end-to-end. Thinking about how a broker can spend as much quality time with a potential borrower as they need, without taking longer than it needs to.”
We need to think what we can do for a completely joined up process.
Craig sees the potential of new API developments to benefit everyone. But he’s also passionate about the need for everyone to work together to get it right; a holistic approach. He explains:
“Let’s say, I the lender, offers an API to a smaller independent broker. They may not have the ability to pick up on that and use that technology, that’s when it starts to fragment the market. You could end up with a disjointed experience, which doesn’t put the customer at its heart. Take away the channel bias and how do you make that experience fantastic? We need to think about what we can do for a completely joined up process.”
We’ve never been in a market or situation where we stand still.
Does that seem a bit idealistic? Craig thinks not:
“Let’s take open banking. If you said five years ago that it would it become a reality where customers would share their financial data across banks. You would’ve thought ‘gosh that’s hard to achieve!’ But if the right players come together you can make it happen. It’s a mindset thing. The fact is we’ve never been in a market or situation where we stand still. We are never going to be in a situation where regulation, or a technology partner, or the base rate stands still.”
So the benefits are laid open when open banking and smart API’s can work together. Craig sums it up:
“One of the most important elements of the entire journey is getting a verified income early and it’s in everyone’s best interests. If you can get verified income, you get a much stronger feel for someone’s affordability. Imagine if you could have an API with HMRC (the UK's tax collectors)? You’ve straight away got someone’s income from a P60 (the UK's certificate of tax paid via annual salary). How much easier would that be?”
It’s all a far cry from that credit scoring application 20 years ago.
