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 Chancellor’s mini budget and the announcement of the axing of the 45% tax rate (since reinstated) and the Bank of England’s seventh interest rake hike in a row, homebuyers saw mortgage rates sky rocket as lenders rushed to pull products off shelves in order to replace them with alternatives that better reflected the recent changes.
The national media was quick to pick up on the market’s activity – speaking to existing homeowners and would-be homeowners across the country about the detrimental 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 the implications for their monthly repayments.
Kwasi Kwarteng has since u-turned on his decision to cut the 45% tax rate – which has brought greater stability to the wider economy – and whilst the housing market is still in somewhat of a state of flux, it too is somewhat calmer than could be said of it a matter of weeks ago.
Worry still on the horizon
This said, brokers are still grappling with last-minute product pulls and higher-than-usual interest rates, as well as, of course, worried clients.
In this sort of environment, providing clients with the support and reassurance they need is an utmost priority – and brokers are certainly doing their best.
What is also true in this sort of environment is that minimising risks – and therefore, worry – elsewhere is more important than ever.
Mass adoption of technology
The rate and which the mortgage industry’s has adopted technology has been both astounding and impressive. For a sector that, until a couple of years ago, was largely paper-based, it is today almost unrecognisable – with many brokers who, having turned to technology platforms over the course of the pandemic as a matter of necessity, continuing to see its longer-term benefits despite the days of Covid-19 now (hopefully) being well and truly behind us.
Indeed, technology has revolutionised the mortgage industry, enabling brokers to offer homebuyers a quick and seamless journey carried out, for the most part, online, via digital platforms or apps. This has brought of course considerable advantages, especially in the current environment where homebuyers and remortgagers are increasingly looking to secure rates quickly before they move again. In fact, a recent survey by one digital platform, Smartr365, found that 61% of brokers now see technology as integral to the future of the mortgage industry.
However, as the saying goes “with great power comes great responsibility” and this is true of technology too. Technology is undoubtedly powerful and has had a far-reaching positive effect on how home purchase transactions in the UK are processed. So what of the responsibility.
Tackling fraud in a digitalised world
With all the positives technology brings, this is not without risk. And the biggest threat posed to the mortgage industry is, without doubt, fraud. This is not new – tackling fraud and money laundering have long been a priority within the housing industry and this continues to be the case. As technology is adopted and evolves, fraudsters and criminals are ever on the hunt for new ways of taking advantage of the UK’s lucrative housing market.
Whether on paper or online, the single biggest way to combat – even stop – fraud is for brokers to have in place robust identification verification processes that don’t let criminals slip through the net. If fraudsters are stopped a the first hurdle, they can’t go on to do the damage they intend to.
As the mortgage industry continues to undergo its digital revolution, key to maintaining high levels of safety and security is for brokers to ensure that they are making the most of robust digital ID&V processes that enable them to check, within a fraction of a minute, that an individual is who they say they are.
Going digital on ID&V
A strong digital ID&V process will use facial ID verification systems that can verify an individual’s identity against their identity document digitally within as little as seven seconds. This is done by cross-referencing a submitted document with identity information held in databases as well as with liveness tests (which use video capabilities to ensure that the person submitting the document is the person to whom to document belongs).
One of the key advantages of using technology is that systems are constantly learning and evolving – so this helps brokers stay one step ahead when it comes to beating fraud. At present, a good digital ID&V provider will be accredited to beat every type of attack for likeness testing, including deep fakes. This means that the system will detect if a photo or video is being used in place of a human face, for example – whilst impressive, these capabilities will only continue to develop as AI advances these.
Another principle advantage is that a good ID&V provider will not actually keep or store any of the data it is verifying – it will simply verify the identity document and send the verified image on to the relevant business, minimising the risk of personal data being stolen whilst also ensuring GDPR compliance.
Harnessing the power of digital
When dealing with the considerable sums of money the mortgage industry deals with, safety is vital at all times. And under the current circumstances making the most of digital solutions to enable brokers to focus on offering homebuyers the help and support they need, secure rates quickly and ensure transactions are carried out safely and securely from the outset in order to combat fraud, is now more important than ever.