The adoption of electronic new business in the life and pension market can at best be described as erratic but there are increasing signs that online submission is becoming the norm in the mortgage market.
It is not difficult to identify the reason for this. On the whole, mortgages are far more time-driven than most investment transactions.
With the possible exception of single-premium business, if you are investing for five years plus, then investing money today in a mixed fund or doing so next week is going to make little difference.
When it comes to a homeloan, however, knowing if the application will succeed is critical.
Personally, I spent more years than I care to remember mortgage broking and I am convinced that it is an occupation for masochists.
You get yourself in the middle of one of the most emotional transactions of your client's life, not just for one set of clients but for dozens at a time.
Whatever goes wrong is never the applicant's fault, even if it is little things such as they forgot to tell the whole truth about their income or their credit history. Whatever the problem, the broker is supposed to be able to solve it.
You cannot help thinking that Superman has an easier job than most mortgage brokers. At least these days, an increasing number of lenders are delivering the capacity not just for applications to be submitted online but also agreements and decisions in principle can be obtained in the same way.
This is really helpful but having to learn the different ways that each lender operates their online services does not make life any easier.
Having a single system that could access multiple lenders would make any mortgage advisers' lives easier. This is, of course, the logic behind the launch two weeks ago of the Mortgage Trading Exchange.
It is backed by six lending institutions – Alliance & Leicester, Halifax Bank of Scotland, Royal Bank of Scotland, Nat-ionwide, Northern Rock and Woolwich (Barclays) – which account for 15 different lending brands and about 60 per cent of all mortgage lending so the service has the poten-tial to deliver considerable economies to brokers as well as lenders.
MTE software is free to advisers. However, to get the best out of the system, you are almost certainly going to want to use one of the mortgage sourcing systems it links to. These are currently Mortgage Brain and Mortgage 2000.
The system also shares data with a number of specialist IFA client management systems such as Adviser Office from 1st Software, Client Care Desktop from Quay Software and Mi-Solution from Sesame.
This is particularly important as applications can be pre-populated from information contained within any of the above systems and any data entered into a lender's application is also moved back into those systems for future reuse.
This is a major advantage over using individual provider extranet sites where, for the most part, the adviser is having to key in data they have already put into their own system and there is no ability to reuse the data.
When users enter the MTE software, they are presented with a summary screen of the cases they have in progress. This includes the stages reached by the case – AIP completed, full application, etc, and the status of the case, that is, has it been transmitted and the progress.
Information on the latter area is at the moment very limited. It will be important for the platform to enhance the level of tracking information available in the near future as this can deliver major savings to lenders in terms of reducing the burden on their call centres and improving the enhanced service to both advisers and clients.
Access to case tracking in real time would undoubtedly be a huge advantage. For the time being, however, the priority – correctly in my view – is to concentrate on delivering the ability to submit applications via a single system.
Eventually, all lenders will use an application generated by the MTE system. This still has the lender's own branding, format and quest-ions but is generated via the MTE software.
This approach is already being used by Nationwide and Northern Rock but in order to deliver a critical mass of key lenders, Halifax and Alliance & Leicester applications are currently set up on the system using their extranet systems. These still benefit from the full cross-population of data, however.
I understand that other HBOS brands such as Bank of Scotland, The Mortgage Business and BM Solutions are developing the ability to use the MTC application form process, as are NatWest, Royal Bank of Scotland, UCB, and Woolwich.
For any adviser using one of the integrated mortgage sourcing or adviser client management systems, using MTE for mortgage applications must be a no-brainer. Users of other sourcing systems may find this a more difficult choice. No summary of electronic trading in the mortgage market would be complete without making some reference to Trigold and its electronic trading capability. This does, of course, include Abbey National and about 60 other lenders but none of those who have backed the MTE initiative.
For reasons I have never really understood, a significant number of mortgage advisers operate multiple-sourcing systems. This may mean the market can evolve, with different lenders choosing only to support one or other of the platforms but I cannot help thinking that it would be more efficient if a way could be found to have a more open environment.
MTE has clearly done some excellent work and the current ownership would appear to make sense while the system is being expanded to its full potential.
It will be interesting to see how many advisers switch sourcing platforms to be able to have access to these new electronic trading facilities.