New research from the Council of Mortgage Lenders (CML),  Digital Change and Mortgage Borrowers, says that technology has the potential to differentiate what individual lenders have to offer to customers and enhance the competitiveness of the UK mortgage market.

The research, which was conducted for the CML by associate Accenture, included interviews with firms and customers across the mortgage sector. The researchers also looked at developments in mortgage markets around the world and how technology is affecting other industries. From its interviews, the researchers found that:

• 84% of companies believed technology could improve customer experiences and relationships;
• 76%  believed it could improve their own operational capabilities;
• 68% thought it could put customers in greater control; and
• 40% believed it had the potential to unlock the power of data.

From apps on which customers can arrange and manage their mortgages to digital property searches and the potential of technology to deliver automated decision-making, the mortgage market is evolving rapidly. But the research also highlights the challenges for lenders in a market in which two-thirds of customers prefer to speak to an adviser about complex products and value being able to ask questions and receive a personalised service.

The CML says that lenders are investing heavily in technology to enhance the customer’s experience and improve backroom efficiency and profitability. As they do so, they will need to develop their own commercial strategies to ensure they can react with agility to future developments and remain responsive to customers in a constantly evolving environment.

Technology also presents challenges for lenders, including the limitations imposed by legacy thinking and systems, the need for greater external collaboration and to keep pace with change, and the way in which compliance with necessary regulation can inhibit the pace of digital development.

CML director general Paul Smee said: “This report highlights the enormous potential of technology in the mortgage market – a huge, process-driven industry with more than 11 million customers. It is already enhancing what lenders are able to offer their customers, as well as improving the efficiency of work behind the scenes. The pace of change will not slow, and firms will need to ensure that their plans for developing technology are underpinned by the clearest possible understanding of all the implications of digital change.”