How innovation has changed mortgages and what is still to come

The mortgage industry, including the mortgage broking process, has seen various innovations in recent years, some groundbreaking, some utterly useless, and some are here to stay forever.

Innovation has many meanings to people, but in its simplest form, innovation is the action or process of implementing new methods, ideas, products, or processes.

Online lodgements, advanced client relationship management (CRM systems), and data analytics have all helped the mortgage process and have been relatively successful implementations for the industry.

But – on the flip side – blockchain, tokenisation of real estate, and consumer self-service mortgages have all been failures and should never be spoken of again! Some innovations should be left on the design room floor, while others should be embraced and built upon.

Innovations in the mortgage industry should prioritise efficiency, transparency, and customer experience, while ensuring compliance with regulatory requirements.

As technology continues to advance, there will likely be ongoing opportunities for creative solutions and improvements in the mortgage industry and specifically mortgage broking processes.

I believe there will be three areas of innovation that need continuous expansion.

• The digitisation of mortgages.
• The impact of regtech.
• Lender/fintech collaborations.

The digitisation of mortgages

Innovation in the digitisation of the mortgage process is going to be a very heady space in the years to come. From Google and Amazon to fintechs and government, digitising as much of the human process is a very hot topic right now.

We already have the ability to use online data sources to speed up the mortgage processes, verify spending habits, and automate lending decisions, but in a world of constant cyber uncertainty, how do we digitise without giving way to cyber threats?

Turning documents into data is the next hot topic. We all hate data entry; it creates inefficiencies, it creates errors, and it creates rework along a process that should be streamlined.

Why do we insist on rekeying data when there are processes, vendors, and AI fintech solutions readily available to digitise the entire mortgage process? Digitising processes and operations are crucial for efficiency and competitiveness, but – because it introduces cyber security risks that simply cannot be ignored – those using them need to heavily research, scrutinise, and monitor to ensure this digitisation meets efficiency and competition goals safely.

The impact of regtech

Regtech is here to stay. While we often complain of over-regulation in the mortgage process, utilising the right regtech solutions will be a business enhancement tool.

We’ve already seen a plethora of digital identity verification programs in the last few years – arguably the first of the regtech solutions used in the mortgages space.

Going forth, I predict that the best innovations in regtech will be the total automation of compliance. This could be done by technologies that automate the compliance process through instant data matching, fraud detection (both data anomalies and document modifications), and that adhere to Know Your Client (KYC) parameters.

When discussing his manufacturing ambitions with his collaborative ethos, Henry Ford once said: “Coming together is a beginning, staying together is progress and working together means success.” This is a quote that will outlive time when talking about collaborations between like-minded ventures.

Lender/fintech collaborations

A growing number of mortgage participants have realised that fintech providers are there to support their goals by innovating from an outward glance, making it easy to get ahead of their competitors.

But it is becoming increasingly difficult to partner with the right fintechs. Having that right solution for your business (by focusing on the digitisation of mortgages and the use of efficient regtech) then the lender/fintech partnership is going to be the single most profitable partnership for both parties.

Of course, innovation is an ongoing process and staying vigilant and adaptive is essential as the threat landscape evolves.

By regularly reassessing and updating innovation goals and measures to address new challenges and vulnerabilities, the mortgage market should always look at innovating to stay ahead of the competition.

Brett Spencer is the CEO of DocuScan, an AI technology provider that provides fraud detection and data extraction software.