Yorkshire Building Society has managed to overcome the problems which seem to be besetting many lenders in preparing for M-Day.
Sales operation manager Richard Forster says the soc-iety's mutuality has helped it take a reasonable and harmonised approach, rather than the frantic and fragmented approach of many other lenders.
Yorkshire was about to begin designing a new sales system when mortgage regulation was announced so Forster says it was able to plan and execute a strategy for implementing regulation that spanned the length and breadth of the organisation.
“We also saw it as an opportunity to review existing processes and have coupled the development of our sales system with the implementation of regulation,” he says.
But Yorkshire's experience also highlights how resource-intensive it is to pre- pare for regulation. Out of a total staff of around 2,000, Forster says the society has had 25 people devoted full-time to regulation, with a further 100 spending a large amount of their time on the project. He says: “The project has cost significantly more than was projected.”
Like many lenders, Yorkshire has wrestled with the creation of its key facts illustration. It has come up with a system that should make life a lot easier for IFAs accessing it directly or via its dedicated intermediary lender Accord.
Forster explains that Yorkshire has devised a way of automating the generation of key facts illustrations. “With the new system, brokers and customers can fill details in online and the system will generate customised key facts illustrations,” he says.
Accord managing director Linda Will says online key facts illustrations were the only logical choice. “With more complicated key facts illustrations, we wanted to have a slick approach to remote access for IFAs. One problem for IFAs is that they probably have a choice of around 20 to 30 websites to work from offered by lenders and sourcing systems.”
Will says Accord runs around 30 focus groups a year to gauge intermediary opinion and has learnt how to deliver an intermediary-friendly approach to regulation. She says: “We are getting information out to brokers as quickly as we possibly can to make sure they are ready and confident to begin doing business in the regulated world.”
The society's marketing department has also been kept busy in preparing for M-Day, with the massive logistical exercise of replacing its entire documentation from business cards and stationery to advertisements and posters.
Product marketing manager Alison Gregory says there has been significant cost in reprinting every piece of literature, not to mention the need to manage the process carefully so that branches do not run out of stock and that every base is covered.
The content of advertisements has not had to change much. Gregory says: “The regulatory requirements for promotion are not a huge step from where we were. We have never hidden the small print. The advantage for us now will be that regulation will raise the competition to the level we are presently at.”
She says one of the biggest challenges for marketing departments will be to produce rate-led campaigns. “Under the new regulation, you will now have to list every single rate that will be applicable throughout the life of the product. This will stop unscrupulous lenders from hiding massive rate hikes down the line.”
Gregory was also charged with producing an internal booklet which explained to staff just what mortgage regulation means for the building society. She says: “It was important to us that everyone at Yorkshire understood what all the change was about. The booklet puts into plain English what regulation means, stripping the jargon.”
By all accounts, the booklet has been well received. Training manager Gary Marlow says it has helped staff recognise the regulatory implications for the organisation and their own individual work. He says it has formed an excellent base of knowledge from which to build on with targeted training programmes.
From a training perspective, Marlow believes the change to a regulated mortgage market has been the single biggest project that Yorkshire has undertaken in the past 10 years. He says: “We have always taken a proactive approach to industry qualifications and have been no different with mortgage regulation. The majority of our mortgage advisers were Cemapqualified in 1999. As soon as staff move into this area they must become Cemap-qualified.”
Marlow says this created an expectation among staff that Yorkshire would be proactive when it came to M-Day. A new training and competence scheme was designed and has already been implemented, requiring higher qualifications and a new way of supervising branch mortgage advisers.