Watch out for Open Banking

You may not have heard of the phrase but it’s going to revolutionise lots of aspects of life but most relevant to us, mortgage broking and advising.

Imagine being able to look at the current account of a customer if you’re a mortgage lender or broker before they actually apply for a mortgage. Of course, statements are available during the underwiring stage but if you could get your AI or intelligent software to scour these prior to contact you would know so much about them to “sell” them a remortgage.

For example, if I were employed and just had a pay rise and had recently repaid my personal loan and my mortgage payments were always up to date, then I would be a good customer for a remortgage and would more than likely accept an offer even if I hadn’t of thought about it.

On my phone I receive an email from a mortgage broker out of the blue telling me that because my situation had recently changed I was now eligible for a remortgage which would save me £200 per month, click here to find out more.

Sounds compelling. And our time poor modern customer would love to continue this transaction on their Smartphone.

The tech that drives this is Open Banking. Simply with your permission, your current account can be linked to another firm. A broker firm, an IFA firm, a retailer. Anyone you want and it allows that firm to access your current account and banking data before any transaction is offered to you.

It would also cut down the ugly process of assessing affordability. “How much do you pay on the gym each month?” because this info is already known. Imagine how quickly it would be to underwrite.

Habito have linked in with Starling Bank – a new upstart. That’s an online mortgage broker and a bank with 100,000 customers. Just imagine the amount of business that can be trawled from that arrangement.

So, keep an eye on this development, it’ll revolutionise our sector under our noses. The message again and again is not to fight this change but to embrace it.

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