FinTechTalk: Driving transformation for a better mortgage lending experience

On 3 December 2024, FinTechTalk host Charles Orton-Jones was joined by Will Stevns, UK Customer Led Transformation Lead, PwC;  Jonathan Workman, Transformation Director, Paragon Banking Group PLC; and Tom Byrne, Head of Product and Innovation EMEA, nCino. 

  

Legacy technology 

Mortgage lending still has a lot of legacy technology both in terms of origination and core platforms. A lot of the big lenders have 4-5 core systems and a number of different origination workflows. Paragon Banking Group PLC has spent the last two years building a new front-end platform which is being piloted now.

 

The typical journey in the industry is going for low-hanging fruits when starting to digitalise but the difficulties usually come when complexity is added to the equation and, as a result, the case must be escalated to humans. A transformation project also provides an opportunity to think over how the organisation should be working.

 

The overall home buying experience is still rather fragmented and moving different aspects onto a unified platform can result in a much more streamlined customer journey. 

 

A business often has two arms – one for a specialised business such as buy-to-let and its prime residential business with two different tech stacks. It’s also key to digitalisation to consider what technology you can supply the underwriter with, who plays a crucial role in the whole process. When streamlining processes prior to digitalisation, friction points and unnecessary admin mut be removed. 

 

How much customisation is possible? 

Traditionally, mortgage solutions are costly and complicated to customise. AI is bringing a step change in both the the amount of data that can be ingested and its quality. Ai can also augment the work of the underwriter by, for example, helping them understand what policy they need to access if they want to change some of the parameters of the contract.

 

The third major area where AI is expected to cause a step change is customer retention. Chatbots, however, are a less appealing use case in this space where human contact plays a more important role here than elsewhere. In the near future, we can expect an uptick in solutions that are able to personalise the customer experience much more than it was possible before.

 

For the digital transformation to be successful, the workforce must be involved right from the start, and they should get explanations for why certain workflows got different or more difficult, as well as how they pay off – legacy processes tend to be more flexible, while new technology generally requires cleaner data and more specific outputs. The pilot has an important role in bringing people on board too when design changes are made in line with user recommendations. It also helps adoption if you create a culture of constant change.

 

Starting a digital transformation project is not sequential – the different processes such as finding vendors and writing RFPs must be educated by what’s happening on the market. One of the biggest challenges is that the transformation project sometimes loses its priority to other units of the bank or implementations that new regulations make necessary. Despite changing priorities and pivots, though it’s important that  the executive level is committed to the transformation in the long term.  

 

The panellists’ insights 

• Make sure you don’t eliminate the human from your processes through automation if that human element makes your business unique.  
• It should always be the business strategy that drives technological investment, not vice versa.  
• Responsiveness to user feedback and changes made quickly in line with them is the secret sauce to high adoption.