The industry could see M-Day approaching from a long way off and not all companies adopted the same approach and attitude regarding the most effective way to tackle it.Some arrived on the eve of M-Day and, like startled rabbits in car headlights, awoke to realise compliance was about to run them over. Other companies fell into two groups – those which planned to do all they could but as time marched on eventually focused on doing the bare minimum and those which viewed compliance as an opportunity and refused to allow it to jeopardise their offering. For those who pared their activities to a minimum, some negotiated M-Day unscathed while others had to quickly catch up and in either case when they emerged they then had to set about returning to business as usual. To reinforce this point of view, on M-day, 24 out of 110 lenders had not provided Mortgage Brain with the minimum additional information required to produce a KFI on their behalf despite having been requested to do so some six months earlier. The result was an immediate downgrading on October 31 to offer only a “quick quote’ – the product remained on the Mortgage Brain system for comparison but the ability to produce and print a KFI had been removed. As an introducer could not submit an application without a KFI being previously produced, market forces soon kicked in to restore matters but the damage had been done. Introducers have a long memory and will remember those companies who were ready and those who were not. The second group responded to M-Day by using the new requirements to shape the development of products and services, innovation was not halted and new opportunities were realised. From an introducer’s perspective, many took the dec-ision to be regulated directly, either by delivering their own compliance services or through obtaining them from established players. The majority of those who joined networks elected one with an established track record, in particular, Bankhall and Sesame. Out of the new networks, Network Data has been the most successful at attracting appointed representatives by some considerable margin. From a technology perspective, Mortgage Brain first demonstrated KFIs being produced in March, some eight months in advance of M-Day and the point-of-sale “compliance” solution was up and running well in advance of M-Day. We also experienced an acceleration of lenders capable of electronic trading on the Mortgage Trading Exchange (60 per cent of the market now live with 80 per cent committed) with the first five lenders – Bank of Scotland, Halifax, Nationwide, TMB and UCB also able to deliver the new innovative service of integrated, lender-produced KFIs. Following M-Day, the industry has responded. Mort-gage Brain continues to play its part and its proposition invites lenders and introducers to take advantage of service levels well in excess of the minimum requirements of MCOB, for example, for mortgage product data accuracy. Product information is checked and then double-checked. Lenders verify the top product details, KFIs are proactively checked to confirm those produced from Mortgage Brain are within tolerance when compared to those produced by the lender. At present, more than 60 lenders proactively verify product data and up to 10 KFIs are checked for thousands of mortgage schemes for around 40 lenders. All this information is clearly visible to the introducer. Alongside these advances, several leading lenders have amended their service to enable introducers to request a lender-produced KFI during the point-of-sale process via MTE. This means that information does not need to be re-keyed and, as they share a common look and feel, it is far easier than using the lender’s website. The approach of M-Day accelerated both the availability and use of the MTE and electronic applications which have been instrumental in driving a higher than natural market share of business levels for participating lenders. Electronic trading has been adopted by many thousands of introducers and the key drivers of ease of use and improved service are successfully pushing up volumes as more introducers and lenders realise the benefits. The facts substantiate this – lenders accounting for over 60 per cent of lending in the UK are live on the MTE, transaction volumes are at an all-time high with record week following record week and the current trend indicates continued exponential growth. Compliance has also represented a watershed for introducers and how they use mortgage sourcing systems; hitherto a means of locating an appropriate product. Now they are being used to fully support the compliance process including producing IDDs, fact-find, needs’ analysis, KFI production, reasons for recommendation letters, together with electronic submission of eKFIs, AIPs and applications. Furthermore, a comprehensive audit trail and electronic document storage solution means an advisor can retrace their steps in years to come. Introducers who have adopted this shift now use a point of sale compliance solution with integrated sourcing and customer management application closely coupled with electronic trading on the MTE – front-end compliance and sourcing allied to back office trading via MTE. If you are looking for an analogy for compliance, it represents a tunnel positioned in front of us. Without any indications as to its height restrictions and with possible obstacles inside the tunnel, negotiating it for the first time proves tricky. Having once made any necessary adjustments to ensure you negotiate the obstacles, the important thing is then to focus on what the road is like on the other side of the tunnel. Integration of the point of sale with electronic connectivity to lender systems is not only here to stay but it will also be extended. Introducers will demand and expect much more aspects of the mortgage process to be carried out electronically. It has to follow that more lenders will respond to this and will deliver integrated eKFI, AIP and application capability. In other words, introducers and lenders which adopt electronic trading, which is fast becoming the norm, will put more clear water in terms of customer service levels and efficiency between themselves and their competition. We started this article discussing the premise of electronic applications in the reg- ulated market – is compliance the driver over offers?The answer is that for a short while it may have been, but once the driver(s) negotiated the compliance tunnel (no apologies for the pun)a quick change of gear and the industry is accelerating ahead.