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Express concerns

There can be little doubt that for the vast majority of industries the pressure to e-enable every possible part of their business has diminished in recent months.

Life may never be the same again for booksellers or record shops but many other industries will be breathing a sigh of relief as the pace of e-commerce declines to a crawl.

Although there may be less pressure to adapt to full-blown e-commerce in most markets, the drivers in financial services are very different. Here, we appear to have a Government that is happy to define product terms, permissible margins and a regulatory regime and impose upon the industries concerned a legal obligation to deliver.

The net result is that both the life and pension and mortgage markets are about to experience fundamental changes to the ways in which they operate. E-commerce for its own sake may have become rather discredited. The revolution has not happened – yet.

This should not mean we lose focus on the fact that the same type of technologies can help product providers and advisers integrate their relationships and, in partnership, achieve the more cost-effective distribution.

Last week, Mortgage Express took me through some of the tools it is developing to help it achieve integrated relationships with its advisers. To be fair, these are in relatively early stages of development. Indeed, I am not sure they were not being demonstrated to me rather before they should have been.

The service, known as mx-online (www.mx-online.co.UK), is presently being trialled with a limited number of advisers who are significant Mortgage Express partners.

Mx-online allows advisers to enter a client&#39s basic details so the system can generate a list of the Mortgage Express products available to meet their need. From this you can then select a product, enter the full client details and obtain a decision in principle. This is limited to a maximum of two DIPs for each client to avoid trial and error submission of cases.

Once the DIP has been passed, all the information previously entered can be prepopulated to an online application. Mortgage Express has removed the need for the client to actually sign the application at this stage. A copy of the application is now sent to the client at the post-offer stage, although this does mean that they have to sign every single page of the application.

Once a case has been submitted, I am told case tracking information can be obtained via the service. I say I am told as, during the demonstration, despite trying several test cases, only one eventually provided information and this took far longer than the two minutes download time that is warned of on the service despite using an ISDN connection.

Mortgage Express did put me in touch with one of the test IFAs who assured me they have not had such problems.

If there were such a thing as a polarised mortgage distribution market, Mortgage Express has come up with what would be an excellent service for advisers who only sell their product. The truth is that the mortgage market does not suffer from such polarisation.

Consequently, advisers are far more likely to run a client&#39s loan details through one of the many mortgage sourcing systems such as Mortgage Brain, Mortgage Link, Mortgage 2000 or Trigold or one of the solutions on offer within both the AssureWeb and Exchange portals rather than a system including the products of a single lender.

Although not a sub-prime lender, Mortgage Express has a range of products that are designed for borrowers looking for something outside the purely vanilla market. This might mean it is slightly more practical than a single lender extranet at the prime rate end of the market but I believe that this functionality would be better employed supporting portals that are far better placed to follow the ways advisers actually work.

To its credit, this is recognised by Mortgage Express who claim that having developed its extranet it is ideally placed to support mortgage portals in the future.

No significant product enhancements for the client, or advisers, are being promoted to encourage use of the online service as compared to their paper products, a situation I find rather disappointing.

Although I did not have the chance to test it properly, the case tracking clearly has significant benefits for mortgage advisers and this is a service other lenders would do well to replicate. I can&#39t help thinking, however, that only offering such updates on cases submitted electronically is severely limiting what can be achieved by the service.

Given that it is populated by Mortgage Express&#39 back-office processing system, it seems to me that both they and their introducers would benefit from all current cases being available on the tracking service. Once brokers had become used to using the tracking service regularly, they may well be more inclined to use the new business facilities.

Given that this site is, I am told, effectively a prototype for the sort of services Mortgage Express wants to offer in the future, the most disappointing area to me is the lack of any facilities to aid the compliance process. By this time next year, it is going to be essential for lenders to have a whole raft of additional processes in place to ensure that sales have been conducted in a totally compliant manner.

To me, there is little doubt that such tools will have to be electronic and indeed I believe that the need for compliance will actually be the biggest driver to take the mortgage industry online. I suspect that many lenders will rapidly move to a situation where they will only take new intermediary applications in this as it will greatly aid their ability to comply.

To meet these challenges it will become essential to have a vibrant competitive portal market and if this site is designed to help Mortgage Express prepare for dealing with a wider range of electronic platforms, then, by failing to include compliance tools, it has missed a golden opportunity.

Ian McKenna is a consultant and director of the Financial Technology Research Centre, which works for a wide range of industry organisations, life offices and technology companies, including Microsoft, Assuresoft and The Exchange. He can be contacted by email at ianm@financialtechnology.net Tel: 020 7935 2599

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