Specialist lenders are being urged to raise service standards as research shows clients increasingly compare their mortgage experience with major streaming platforms.

New findings presented at the recent Future of Mortgage Servicing conference suggest specialist lenders are under growing pressure to improve their customer experience, with more than 90% acknowledging that borrowers now expect a higher level of service.

The poll, conducted by Phoebus Software alongside Target Group and the Financial Services Forum, surveyed 100 senior mortgage professionals. It found that seven in 10 felt customers now expect significantly more from lenders, while a further 23% reported slightly heightened expectations. No respondents believed customers wanted less than before.

TECH IS SHAPING CUSTOMER EXPECTATIONS

Phoebus Software said the findings highlight a shift in borrower behaviour. As consumers grow accustomed to the frictionless interaction offered by platforms such as Netflix and Spotify, the same expectations are being brought to mortgage servicing.

Adam Oldfield, chief executive of Phoebus, said specialist lenders play an important role in serving borrowers with niche or complex needs, but that long-term engagement risks being overlooked.

He said: “Specialist lenders play a vital role, providing bespoke products to meet specific customer needs, but there’s perhaps less focus on maintaining the customer relationship post-completion.

“Where high street lenders can cross-sell different products and build brand loyalty, specialist lenders need to work a bit harder to foster a meaningful relationship.

“The reality is that retention strategy starts as soon as you have that first interaction with the customer, and every minute it goes beyond that.

“Customers’ expectations of service are changing, fuelled by their experiences with service providers in other industries. Customers now expect to interact with their mortgage providers in the same seamless way they do with Netflix or Spotify.”

Oldfield added that technology and AI will be important tools for lenders looking to keep pace, while emphasising that automation should supplement rather than replace personal contact.

“We believe technology and AI have an important role to play in understanding and meeting customers’ needs. We don’t see them replacing the human touch, which is so important in the specialist market, but rather as an enabler of great customer service.”

WHO OWNS THE CUSTOMER RELATIONSHIP?

A separate poll at the event found that 70% of mortgage leaders believe it is important for specialist lenders to own the customer relationship. However, speakers suggested the issue is more nuanced.

Pete O’Connor, chief executive of Target Group, said the dynamic between customer, broker and lender must be handled carefully.

He said: “We know there can sometimes be a friction between broker and lender about who owns the customer relationship, but real success comes from both working together to deliver the best outcome.

“For me it’s less about ownership and more about partnership. You have to earn the right to do business with the customer. By working together and delivering great service, then you can build an ongoing relationship that will reap rewards years down the line.”