UK consumers want seven-day mortgage switching
Commissioned by EDM MMS, a technology solutions provider to the UK mortgage sector, the research used a sample of 1,050 UK consumers to gauge consumer attitudes to current processes, and assess demand for faster switching times.
Of those surveyed, 80% of participants said that they wanted to be able to switch within seven days. Meanwhile, 51% of participants said that it was “absolutely” a good idea, while 29% thought “probably”, and 2% said that it was “definitely not” a good idea.
The research also found that consumers were discouraged from switching due to the complexities of the process. Of those who had changed providers recently, 31% said they were put off from switching again due to either cost or complexity. While 40% of those who hadn’t switched providers at all said they stayed with their current provider owing to concerns over complexity.
According to published transfer processing times for lenders, most switches currently take between two to four weeks to complete, but can take up to eight weeks in some cases.
However, Joe Pepper, managing director of EDM MSS, argues that seven-day switching is not only demanded by consumers, but is already feasible with existing technology:
“The extended times taken to remortgage can be linked to the antiquated technology and processes used by the industry. Even with much of the underlying information required to complete a switch already in a data format and available at the touch of the button, the process is sadly hampered by competing systems, an over-reliance on paper documentation and resistance to the adoption of new technologies.”
For instance, it currently takes up to several days to assess how much money should be lent on a property, but Pepper says that by using EDM MSS’s risk assessment product, PRISM, the Nationwide Building Society has managed to reduce this process to less than 30 seconds.
According to Pepper, the demand for better processes and outcomes will only increase as technologies develop: “People are already able to switch current account and utilities providers in seven days — the pressure on the mortgage sector to follow suit will only escalate.”