Bluestone Mortgages has today reported that half of brokers (50%) feel Open Banking will have a positive effect on the specialist lending market. Bluestone Mortgages was the first specialist lender to pilot Open Banking technology in January 2019 and is lifting its investment in the digital underwriting journey to improve the quality and efficiency of the underwriting process for complex borrowers.
While Open Banking was initially launched in January 2018, its impact on the specialist lending market has so far been limited. Today’s figures confirm that awareness amongst brokers is increasing which could prompt greater adoption by Specialist Lenders over time.
Open Banking technology is particularly beneficial when it comes to catering for borrowers with more complex income or expenditure patterns. Through the provision of detailed underlying bank transaction data, Lenders are presented with better quality and more timely information to support a mortgage approval.
Steve Seal, pictured, Managing Director at Bluestone Mortgages, comments:
“Open Banking has already delivered major benefits for the UK’s high-street lenders – and now it’s time for specialist lenders to follow suit. It’s great to see that brokers recognise the potential that this kind of technology holds for the specialist lending market. The fact that Open Banking can make accessing customer data much easier, radically reduce decision times and vastly improve customer outcomes will be invaluable to a sector that caters for complex borrowers. We hope to see the solution gain more traction in the specialist market going forwards.”
Bluestone’s latest ‘Specialist Lending Tracker’ also revealed brokers’ thoughts on the impact of technology more broadly in the specialist lending market. The research found that over two-thirds of brokers (65%) believe that technology driving efficiency across the application process will have a positive impact on the market. However, nearly four in 10 brokers (38%) thought that under-utilised technology will have a negative impact on the market.
Looking ahead to the next 12 months, 17% of brokers thought that a rise in technology driving efficiency across the application process will be the biggest driver of growth in the market. This came second to the growing number of adverse credit customers looking to purchase a home, with 20% of brokers considering this to be the biggest driver of growth over the next year.
Steve Seal continues:
“As more brokers embrace technology, the specialist lending market will continue to grow. Technology has quite clearly demonstrated its ability to improve the application process over recent years and will continue to contribute to the positive customer outcomes that specialist lenders and brokers deliver. It will be vital that all brokers are equipped with the digital tools that they need in order to feed technology into the application process effectively, and maximise the potential that it holds both for themselves and their clients.”