Novus says redesigning journeys now could make underwriting up to 20% faster
Lenders could fix up to 86% of the friction in their mortgage journeys now, without waiting for Smart Data or Government reforms, according to consultancy Novus Strategy.
Novus experts delivered a masterclass this week to transformation specialists at banks and building societies. Chris Williams, transformation and strategy partner, and Kevin Duncan, pathfinder product director, said redesigning the journey now could make underwriting as much as 20% faster, from decision in principle to full mortgage offer.
For brokers, faster and more predictable lender processing could mean fewer stalled cases and clearer choices when placing clients.
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Delay hidden in handoffs
Williams and Duncan said friction was often hidden or measured wrongly. One lender completed underwriting on each case in just 10 minutes, but did not count the time cases spent in people’s inboxes. That meant it underestimated how long underwriting really took by over 99%.
They called this the problem of handoffs, where a case, task or piece of data moves from one person to another, inside a firm or between firms.
At another lender, mortgage offers took 25 days, but half that time went on handoffs rather than underwriting. Misrouted cases added further delay. Where income types were misidentified, cases had to be redirected to specialist internal teams late in the journey. That cost three to four days, even though the underwriting took just 43 minutes.
A further lender checked customer identity up to 12 times per transaction, something Novus said digital ID should consign to history.
Williams said: “Lenders aren’t necessarily responsible for all of that delay currently. But what will happen is that lenders could ultimately become responsible for delay if the rest of the industry begins to improve their parts of the journey and lenders, inside their own four walls, keep doing the same things that they’ve always done.”
Reforms raise the stakes
The Government’s Home Buying and Selling Roadmap, unveiled on 19 June, aims to cut homebuying times by around four weeks. The Government says the average purchase takes about 120 days and one in three sales falls through.
The roadmap centres on digitisation, interoperability and mandated data-sharing standards. The Department for Business and Trade’s Smart Data consultation closed on 1 October. A Government report in March found Smart Data in home buying could generate billions of pounds in economic value, the Open Property Data Association said.
Novus said tackling inefficiencies would matter for lenders expecting to benefit from the proposed reforms. Yet in a live poll during Wednesday’s webinar, “Smart Property Data: Is Your Mortgage Journey Ready?”, four in five attendees said they had not fully mapped the friction in their journeys. More than a quarter had not started.
Products could change too
Williams said the benefits go beyond speed: “It’s not just about the time then. This is also about the products that people sell. They’re not necessarily going to stay the same. The opportunity for all lenders is to push out different types of products.
“So it’s not that hard to imagine [...] preferential rates for easily underwritten properties or full mortgage offers made earlier based on lighter surveying requirements. So this kind of transformation[...] is quite opportunistic. [It’s] about laying better foundations for future mortgage products and creating a defensive position.”
For brokers, such products could change how cases are matched to lenders, though none is announced.
Attendees also saw Novus’s Pathfinder platform, which can create a digital twin of a lender’s mortgage journey, identify friction points and produce a phased investment plan to improve speed-to-completion, capital velocity and lending volumes.
“Preparation for smart data is a combination of three things – technology, processes and configuration. If we don’t have all three in place, then we won’t optimise fully for the Smart Data that’s coming down the line. If we layer smart data on legacy processes, we will not unlock the value that can be realized,” Duncan said.
“[It’s in] the redesigning of the mortgage journey in a way that’s ready for Smart Data, that’s where everybody wins. Not only are the original gains there, the indirect gains that will come through are absolutely massive.”
The findings come from Novus’s work with lenders, which were not named.
