New proptech: speed isn’t everything

While most financial firms – and even the Bank of England – have opened their eyes to the improvements new technology can offer, the mortgage market has stubbornly resisted its charms. Yet the proptech movement is a clear example of how much the mortgage industry has to gain from the improved adoption of technology. With any new technology, the immediate questions should be: why should I adopt it? And what can it do for the end consumer? The easy answer for the mortgage market is often that technology would speed up the process, which in its current guise could politely be described as pedestrian. The government is certainly preoccupied with speed, with its Better Markets Bill floating the idea of being able to remortgage within seven days, following a similar model to current accounts and energy tariffs. But the pursuit of speed for speed’s sake is a mistaken one, and one that will inevitably threaten the credit controls and safeguards responsible lenders work hard to put in place. Technology has more to offer mortgage lenders than simply speed. At LendInvest, we are building tech tools that can improve communication and efficiency, ensuring that quality, experienced staff are able to do their jobs better. It will also transform the process of getting a mortgage into a friendly, clear and, importantly, online transaction. This culminates in a faster process, but the improved speed is an added bonus rather than the motivating factor. The mortgage lending system today looks completely outdated, relying on old-fashioned methodologies. It is a deeply unsatisfying experience for everyone involved. That can and will change, with technology at the forefront, but it will take time. Barreling in with brand new tech infrastructures that promise to revamp the entire mortgage system overnight simply is not going to work. Instead, change will come incrementally, led by businesses that truly understand the mortgage process and know exactly where technology can improve it piece by piece, rather than those promising a wholesale revolution. Mortgages are just one part of the property ecosystem, but there are lessons to be learnt from the many proptech success stories. Technology has already changed the face of finding a property or selling one, while Trussle and Habito are using technology cleverly to open up mortgage advice, and Plentific is making it easier to get cost-effective services for your property. These firms and other proptech startups are fantastic examples of how technology can make a difference beyond simply improving speed, and they are examples that mortgage firms need to follow. Thankfully, technology is already being used by some to help lift some of the burden of time-heavy administrative tasks, freeing up staff to devote their energies to the meaningful tasks that require a human touch. But it can do so much more. We believe it is only a matter of time before all the stakeholders in a mortgage, from the borrower and broker to the lender, solicitor and conveyancer, can follow the progress of a case in the cloud. Such a development would keep all the players in a property transaction abreast of developments in a simpler, centralised format than the current system. Yes, it would likely speed the process up, but it is the improved efficiency that is really the driving factor. There are inevitably limits. Technology cannot take over the whole process. There is no algorithm that can handle the entire task of underwriting mortgages, nor should there be. Technology can do a lot more to help knowledgeable mortgage underwriters do their job, but it cannot (and should not) do their ultimate job of deciding whether to lend or not for them. However, there is plenty of scope for the mortgage market to move with these technology-driven times. At LendInvest, we have already seen how technology can be used to turn mortgages into an investable asset through our marketplace, opening up property investment in a way that simply was not possible before. Now we must see similar innovation in the actual borrowing process. As we increasingly see the benefits that technology can bring to other areas of financial services, the mortgage market simply has to follow suit. Christian Faes is co-founder and chief executive of online property lending and investing platform LendInvest