Powerful forces are transforming the mortgage market: Low interest rates are compressing lending margins; regulation is impacting business models; technology disruption is increasing competition and changing customer expectations. As these forces shape the behaviour of both lenders and borrowers, a chasm has emerged between customer expectations and the ability of lenders to meet them.
While many lenders have turned to digital technology to improve performance and stay relevant, they have failed to recognise that needs and circumstances of borrowers have become increasingly at odds with the processes deployed to serve them. Investment in new technology can improve customer experience and deliver business value, but it needs to be deployed in an operating model that gets the best out of it. Policies, processes and controls must be designed in a way that enables both the customer and business outcomes, ensuring the optimal application of regulation.
The assumptions that underpin many major lenders’ mortgage policies and processes have not been challenged for decades. These outdated views erode the business benefit of even the best technology.
Our experience working with clients shows that the most immediate improvement in lending efficacy can be realised with little change in technology, but rather through the optimisation of policy, process and control. Doing so requires lenders to “zero-base” their assessment of market dynamics and value drivers, without current state constraints.
At Parker Fitzgerald, we have developed a proprietary zero-based framework that prioritises levers for mortgage effectiveness and pin-points processes and controls that can be optimised. Our work has enabled a global bank to reduce annual operational costs by £17 million and improve straight-through processing by 45% without increasing risk appetite.
You can access our framework here and we would be delighted to demonstrate the benefits for you.
For more information contact:
Phone: +44 (0) 207 100 7575