Earlier this month we saw the UK property market experience one of the most frantic weeks it has seen in a long time.
Following the then Chancellor’s mini-Budget and the announcement of the axing of the 45% tax rate (since reinstated) followed by the Bank of England’s seventh interest rate hike in a row, homebuyers saw mortgage rates skyrocket as brokers rushed to pull products off shelves in order to replace them with alternatives better reflecting the new changes.
The national media was quick to pick up on the market’s activity – speaking to existing and would-be homeowners across the country about the impact rate rises had had on their homeownership plans. Many looking to buy had spoken about the need to reassess, whilst those with existing homes – and mortgages – highlighted their fears around managing increased monthly repayments.
Former Chancellor Kwasi Kwarteng u-turned on his decision to cut the 45% tax rate – which brought greater stability to the wider economy – and whilst the housing market is still in somewhat of a state of flux, it has steadied its course than could be said of it a matter of weeks ago.
Worry still on the horizon
Despite a relative calming, brokers are still grappling with last-minute mortgage product pulls and higher-than-usual interest rates, as well as very concerned clients.
In this sort of environment, providing clients with the support and reassurance they need is an utmost priority for mortgage and finance brokers to retain their business.
What is key to move forward in this sort of environment is for mortgage professionals to find ways to minimise risk, reduce friction and enable a speedy delivery of services in reaction to market conditions that are changing every week.
Mass adoption of technology
The rate at which the mortgage industry has adopted technology in the last decade has been impressive. For a sector that was largely manual and paper-based, today it is clearly digital-first – with many mortgage and finance brokers that embraced technology to continue business over the course of the pandemic still using these solutions, having enjoyed the efficiencies they bring.
Technology has revolutionised the mortgage industry, enabling brokers to seamlessly onboard clients online from anywhere in the world. This is an advantage to have, especially in the current environment where homebuyers and remortgagers are increasingly looking to secure rates quickly, before they move again and equally before clients, find a more competitive deal elsewhere. As reported in the 2021 Smart Money People ‘Mortgage Lender Benchmark’ with over 25% of feedback, lenders themselves were seen as the biggest threat in the eyes of brokers.
However, as the saying goes “with great power comes great responsibility”. The power of technology has had a far-reaching positive effect on how home purchase transactions in the UK are processed. With all the positives technology brings, this is not without risk.
Tackling fraud in a digitalised world
Changing economic factors and frantic market activity, can expose more businesses in the industry to fraud.
The practices to tackle fraud and money laundering in the mortgage industry have long been a priority. As technology is adopted and evolves, those involved in fraudulent activity are themselves adapting in return, in order to continue to try and take advantage of the UK’s lucrative housing market and the current uncertainty that prevails there.
The most effective way to stop fraud is at the source and for brokers to have robust identification verification processes that stop fraudulent actors from slipping through the net. If fraudsters are stopped at the first hurdle, they can’t go on to do the damage planned.
As the mortgage industry continues its digital revolution, key to maintaining high levels of safety and security is for brokers to ensure that they are making the most of secure, encrypted identity verification (ID&V) processes as part of their fraud prevention strategy and to satisfy anti-money laundering (AML) requirements.
Going digital on ID&V
A manual process to verify identities is not always efficient or secure as the risk of human error is high. When trying to process a large volume of documents quickly, brokers can increase the risk of identity fraud and data breaches.
A robust ID&V process will use biometrics, document and database checks to verify an individual’s identity against a document seamlessly, in real-time and securely process the data submitted.
Advantages of using next-generation ID&V technology like ID-Pal, are that it integrates seamlessly into existing processes and these platforms are dynamic, built with the agility to add-on the technology needed to combat the latest types of fraud and also be customizable to unique business needs as regulation changes – so this helps brokers stay one step ahead when it comes to preventing fraud while being compliant.
Trusted identity verification solutions are ISO 27001 certified and General Data Protection Regulation (GDPR) compliant to verify not only an identity but an address too, adding that much needed extra layer of fraud protection. This improves the speed and efficiency of an application for the homebuyer who may be residing overseas and also protects the homebuyer’s data – minimising the risk of personal data being stolen whilst ensuring GDPR compliance.
Harnessing the power of digital
Preventing fraud while offering a seamless application experience is more important than ever. When dealing with the high-value transactions present in the mortgage industry, fraud protection is vital.
Digital ID&V solutions offer this security to allow brokers to focus on giving clients the support they need to secure rates quickly and ensure transactions carried out are compliant. They enable a friction-free process to act quickly to changes in the mortgage market, whilst providing much-needed peace of mind to the client and ensuring they stay with your business.
Colum Lyons is CEO of ID-Pal
