The Intermediary – November 2025 - Flipbook - Page 18
T E C H N O L O GY
In focus
Engineering change
to meet the new era
A
quiet evolution is
underway in the UK
mortgage industry.
For decades, lenders
have been dealing
with highly complex
technology stacks, amalgamating
processing systems, origination
platforms and servicing capabilities
from multiple institutions as they
have grown through acquisition.
The risk of upgrading or
transferring that technology to one
systematised platform has been seen to
outweigh the benefits it would deliver.
That has changed – significantly.
Lending dynamics have shied in
the past few years, with customer
retention increasingly important
for lenders as refinancing volumes
increase. The rise of mortgage rates
aer a decade of the Bank of England
base rate being extremely low has
pushed affordability strains out of the
woodwork on existing lending.
Broker introduced business has
continued to take a larger share of
origination. The economy hasn’t
been in a great place for several years
now. Inflation has been harrowing
for millions of households, piling on
the financial pressures for borrowers.
We’ve had more and more and more
regulation to contend with – the
Consumer Duty, net zero compliance,
Basel 3.1. Climate risk has accelerated.
We’ve had flooding. We’ve had
heatwaves.
Lender tipping point
Pricing is still pivotal when it comes to
market share, but this is far truer for
the biggest lenders on the high street
than for the larger and medium-sized
building societies.
Here, service maers, and arguably
plays a larger role in the decisionmaking process for intermediaries
– particularly for those cases that
require a bit more thought when it
comes to underwriting the borrower
or the property.
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The Intermediary | November 2025
The market has seen another wave
of mergers and acquisitions over
the past 12 months or so, which has
created further impetus for lenders to
review how their platforms perform
across the piece.
As a result, it is becoming
increasingly clear that there is
a race to implement significant
digital infrastructure that delivers
on all fronts. As lender systems
become more flexible and more
able to integrate via application
programming interfaces (APIs) with
third-party providers, the options
available to those in risk and credit
control are broadening significantly.
Data is commonly referred to as the
oil of the new digital world. But to
make the most of its gis, systems and
infrastructure require change.
A common issue for lenders across
the market, and of all shapes and sizes,
has been their inability to access data
and use it meaningfully. Changing
the tech stack changes this picture
– and lenders want the competitive
advantages offered by data.
It makes complete sense. Inefficient
processing means higher overheads
and the choice between sacrificing
margin, raising prices or cuing
costs. The last is by far the more
aractive option.
Digital investment is how lenders
are doing that – there are upfront
financial commitments, yes. But the
efficiencies gained are now easily
outweighing that initial outlay.
Efficiency comes in all kinds of
forms, too, typically centred around
capacity. Geing that right delivers
significant efficiencies. The quicker
transactions are processed, the
cheaper it is to originate each loan.
Add to that improved processing
efficiency the use of automated
valuation models (AVMs), complex
underwriting for portfolio landlords,
artificial intelligence (AI) to detect
fraud more effectively, and it becomes
much easier to see how to preserve
MARK BLACKWELL
is chief operating officer
at Cotality
profit margins longer-term. All these
things are underpinned by the beer
use of data. Lenders want access to it
and there are reams of it out there.
Data advantage
The next challenge is connecting
the right data in the right way to
allow lenders to use it to their chosen
advantage. Part of the reason the
mortgage market has struggled to keep
pace with technology developments
seen in other sectors is down to the
fragmented value chain operating in
this market.
There are so many moving parts,
so many players – somehow we
all have to communicate with one
another. In some bits of the industry,
that communication still relies on
emails going back and forth between
individuals. Things are missed.
Mistakes are made. Questions are
forgoen early in the process and must
be asked later down the line.
According to Zoopla, home
purchase typically takes six to seven
months from offer to completion.
Much of that is down to the delays
caused by an aging infrastructure to
support the exchange of data. Brokers
will tell you this every day, and
lenders are not only listening, they are
beginning to act.
The purchase market is currently
in a ‘wait and see’ period, with buyers
and sellers siing tight until the
Autumn Budget is done and there is
clarity on some of the more significant
tax policy changes.
Meanwhile, under the bonnet
lenders are geing their houses in
order. I think the market is about to
go through a period of meaningful
technological change not seen for
years. It will take time and effort, but
it’s underway. ●
