The equity release market has experienced huge levels of growth in the last few years, with more and more homeowners turning to lifetime mortgages to supplement their retirement finances, by paying down existing debt and increasing income, for example. This is incredibly positive news for the industry, but with lenders experiencing larger volumes of business, firms will need to invest in new technology to keep up with demand and deliver the level of service that today’s customers expect.
Traditionally, the equity release market has been dominated by paper-based processes, lagging behind the conventional lending market which has been faster to adopt new online technology, meaning loan approvals can take weeks and sometimes months. But, with the profiles of borrowers changing rapidly as retirees become more tech-savvy, this is simply not fast enough. These customers are not only confident in using new technology, but also fully aware of the benefits that it brings.
Modern consumers are increasingly relying upon technology to manage their everyday activities. Retirees now expect this level of speed and convenience in all of their financial transactions, including equity release. Many will expect access to these products online similar to other financial services products such as mortgage and insurance applications. However, for the equity release industry we still have some way to go in making this happen.
With the clear and sustained consumer appetite for ease and efficiency the later life lending market must look to modernise its processes to satisfy this demand. By designing solutions that will help consumers to unlock the wealth that is tied up in their property.
For lenders a wide range of potential options are available, including online application approvals, electronic tracking and SMS updates for advisers. By introducing tools like these our industry can tap into innovations seen in other sectors, such as apps and 24/7 online services that enable customers to access their loan applications whenever convenient. Technology advances like these will not only provide greater transparency but will also help to boost customer satisfaction as well.
‘Disruptors’ in the residential mortgage market have highlighted the potential of using technology to streamline key processes. Mortgage lenders are now able to able measure application to offer times in a matter of minutes and seconds. The residential market has also already reaped the benefits of these changes such as switching to paperless systems. Signatureless applications have now become the norm, facilitating smooth and efficient transactions processes for their clients.
At More 2 Life we have been at the forefront of pioneering initiatives like these for the equity release market, introducing a full end-to end paperless portal to drive efficiency in the loan application process, recently achieving an application to offer time of just 7.5 working hours. We are pleased to see other lenders adopting the same movement, but the truth is that paper continues to dominate this sector.
It is also worth noting that equity release is arguably more labour-intensive than other financial products, making customer-lender dialogue all the more important. Tech improvements will make it much easier and faster to interact with applicants, allowing them to pose online enquiries directly to their lender and to access product information online.
Looking forward, as the demand for equity release rises, the industry must pursue technology to keep up with customer expectations and to help bridge the technology gap when compared to other financial products. If we can deliver quick processes, expand our product offerings and provide user-friendly accessible solutions for clients and advisers to manage their loan applications electronically, we will stand in good stead for maintaining our robust growth curve in line with the forecasted sector expansion.
Stuart Wilson is channel marketing director at More 2 Life