Will technology disrupt mortgage industry?
According to Intelenet Global Services, there are a number of businesses that aim to use technology to disrupt the process of buying property. They argue if traditional lenders do not adapt they could lose business.
A study by Clayton Christensen found that often leading companies in a marketplace fail to adopt new innovations and can fail as a result. A classic example is Blockbusters who rented DVDs from their shops and failed to adapt to the rise of online video streaming and this probably led to the closure of Blockbuster.
Many UK mortgages applications for residential or commercial mortgages are paper-based and often use phones for communication. Intelenet Global Services says that this makes the process too slow. Traditional lenders that do not adapt technology to speed up the process could lose out to new companies that use automated systems.
An example of new systems is by Attom Data Solutions who use artificial intelligence to quickly estimate property values.
Intelenet Global Services has developed automated systems that help lenders generate mortgage offers in half an hour. The director of Corporate Services for Intelenet, Nitin Sahni said:
“Speeding up processes will help traditional mortgage providers retain and expand market share while delivering the best possible customer experience.”
Bridging loans are often required for time-sensitive deals. Automated systems could help borrowers have quicker access to loan funds.
Humans are still needed to make or confirm loan decisions, but automated systems can be used to shorten the time between the initial mortgage offer and when funds are available.