It might seem difficult to imagine now but the global tech titans – the likes of Apple, Microsoft, and Sony – were once only on the radar of a select few.
All three were at first only noticed by ‘Innovators’ at the outset of what sociologist Everett Rogers has dubbed the ‘Technology Adoption Lifecycle’.
In 1962, Rogers published Diffusion of Innovations, dividing consumers into five categories depending on how fast they are likely to adopt a new product or service. The lifecycle runs from ‘Innovators’ to ‘Early Adopters’, ‘Early Majority’, ‘Late Majority’ and, finally, ‘Laggards’.
In the case of Microsoft, Bill Gates and Paul G. Allen were developing computing software in the mid-1970s, well before the home computing boom of the 1980s. Catering to a niche audience of ‘Innovators’, their output at the time was limited to basic word processing and computer gaming.
But it was at this point, when user volumes were low, that vital elements such as the user experience and the variety of features were improved upon, as friction, machine errors and costs were reduced.
From here Gates and Allen developed the MS-DOS operating software for IBM’s PC in 1981, which took advantage of the business applications early computers offered and begun catering to the ‘Early Adopters’ and ‘Early Majority’, and, as the saying goes, the rest is history.
So where is the mortgage tech industry in this journey?
The mortgage industry hasn’t always been the quickest to adopt new tech tools, but the tides have turned quite dramatically. COVID-19 restrictions saw new tech rushed through the ‘Innovators’ and ‘Early Adopters’ stages, with overall user experience improving as a result.
Much of the technology developed before this point could be described as ‘nascent’, in that while it essentially performed its required function, the process still contained elements of friction to the detriment of the user experience. Indeed, it is only recently that we’ve seen a gradual refinement of these services, leading to less friction and a better overall user experience.
As we emerge from the pandemic these services will continue to become increasingly polished and, as a result, the adoption rate will similarly continue to grow at a much faster pace. Reassuringly, the mortgage tech industry is now moving on from the ‘Early Adopters’ phase into the ‘Early Majority’ phase, with those who adopted tech tools early on a considerable way ahead.
But what does all of this mean in practice? What benefit has this transition brought the mortgage industry to date, and what will it likely bring in future?
For a start, as well as online communication, advisors have begun to embrace digital application tracking, online fact finds and interactive calculators to their list of services. Digital automation has enabled brokers to reduce time spent on cumbersome administrative tasks, giving them more time to complete cases and win new business.
At present, advisors generally use such features in isolation, but to reap the full benefits of these services, they should be used in conjunction with one another. Smartr365 believes these innovations represent more than just a time saving initiative – in the same way that Gates’ first Windows calculator represented more than just a handy, time-saving novelty.
Indeed, these features have the potential to act as one cohesive function, able to bring efficiency and accuracy to the mortgage journey not seen before, but only if collated into one easy to use platform.
Smartr365 in this sense is an outlier as the only platform to offer these functions as one joined up service. We have sought to build this technology into every aspect of the mortgage journey, introducing various integrations including a partnership with Digidentity for leading digital ID verification, a single sign-in feature with Legal & General Mortgage Club and real-time mortgage DIP submissions with multiple lenders, comprising 50% of the market, including Halifax.
Other developments, such as Smartr365’s industry-first HomeBuyer app, support the idea that technology will allow for a better, more efficient level of service. HomeBuyer allows customers to scan a QR code or Near-Field Communication (NFC) chip, in an estate agent window or on a property search site for example, before automatically and remotely sharing their details with a mortgage broker to begin the application process. These are the components of the mortgage journey of the future, bringing even greater efficiency and ease of use to the process.
Furthermore, brokers will soon be able to take advantage of automated income and credit verification at the beginning of the mortgage journey, transforming the process for both them and the lender. In doing so, this saves time for brokers which would otherwise be spent needlessly collecting, sorting and verifying documents, whilst bringing the same benefits to the lender, and also to the customer
Whereas elsewhere the various components of the homebuying journey act in isolation with no real relationship between one another, on the Smartr365 platform they act as one seamless, automated unit. Referring back to the Gates example, the calculator only found real purpose when used in conjunction with other Windows features such as word processing and data storage; this is where we are with the mortgage journey today.
Looking further ahead, such extensive tech adoption will inevitably lead to a genuine paradigm shift in the mortgage industry, one which is able to offer bespoke products and services and enable a more efficient mortgage journey.
It’s a process which will enable the customer more control over how their data is used and for what purpose. Experian’s ‘Boost’ function, for example, allows users to take a more direct role in how their spending is analysed, and in doing so improves their credit score and therefore their ability to secure a mortgage.
The mortgage industry finds itself in an incredibly exciting position as the benefits of such innovative technologies are laid out before it. It’s imperative that as consumer demand recognises the vast benefits that these services can bring, that firms seek to adopt these innovations before they are left behind for good.
Conor Murphy is CEO of Smartr365
