Article originally published in Mortgage Introducer April 2022 – page 22
He who pays the piper calls the tune so the old saying goes. Those paying for a service can choose where, what and how that service performs and delivers.
But this ignores one important element – often the curse of many CTO’s existence. When you can only listen to one piper you are saddled with what you have got and getting them to play anything more, or differently, for that matter, – not to mention a new instrument – is impossible without having to wait aeons for it and endure a hefty bill for the pleasure.
This is seemingly where we are with legacy infrastructure in UK lending. So much that is available in terms of data opportunities is hamstrung by a mode of delivery that has outlived its usefulness. Now the legacy issues of lenders are one set of problems but the legacy means of data distribution that many still use remains another.
It was recently reported that the average transaction for UK homebuyers took 83 days from instruction to completion back in 2007. Now, the average sits at 122 days – an increase of nearly 47%. We are of course in different times. Self cert is no longer part of the mortgage approval process and the pandemic, sheer lack of new and existing stock, furlough, deferral schemes and more means it was bound to creep up. But archaic infrastructure will not be helping.
Thinking differently about delivering technology solutions comes with the territory of working at a company that has spent a lot of time connecting distinct parts of the mortgage value chain. Lenders now not only connect with their surveyors via a suite of applications but also to data providers through our APIs. Services exist now that are designed and delivered to streamline mortgage operations and improve efficiencies while reducing risk. Better turn-around times and greater transparency in the home-buying and selling process (the use of real-time data, for example, to triage a property’s need for physical or digital inspection) mean quicker decisions, a reduction in hold-ups, greater property risk assessment accuracy and fewer post valuation queries.
Of course, many of these types of products offer granular assistance to lenders’ decision making and processing but today’s data opportunities go further. Our services include higher level views of markets and risk exposures by providing comprehensive sets of aggregated property market statistics that allows lenders to analyse various segments of the residential market – identifying value, minimising risk and informing better decisions.
It remains a fact that the data and processes available today that add real value to lenders are somewhat restricted in their availability by the historic infrastructure that was built for another time. Interoperability, something that is a cornerstone of internet and cloud development, is left at the doorway when these forward looking discussions take place. Slow, pain-staking expensive upgrades often mean newer software solutions remain tantalisingly out of reach. It doesn’t have to be like this. We are the evidence that better ways of doing things are in play right now. Proprietary data products including AVMs and tools to manage mortgage acquisition and retention are part of the property risk management furniture for the ones that have moved on.
There are very understandable economic reasons for the continued use of legacy but it does not serve anyone well in the longer-term. Generations of IT providers have aged but the users of commercial services are younger, and with this generational change has come changing expectations of service delivery.
Aging systems are an issue that has been growing for decades – one that is willingly ignored when the systems kind of work, developers are still around and the users, for whom the systems were designed, are still working. But time mandates that this changes. Waiting does not reduce the risk.
Layer upon layer of fixes mean that, like people, much of this infrastructure is weighed down and tired. A simple lift and shift into a new environment like the cloud promises much but is not the answer either. Like the six-million-dollar man, these systems need rebuilding and repurposing because when IT becomes a burden then process decay is usually not far behind.
There are solutions of course but they require vision and an admission that doing nothing is no longer an option if falling further behind is the price. If you do pay the piper and feel like you deserve a better performance, now is the time to start the process.