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The click and the dead

Lenders believe the best online systems will win business, says Andrea Tryphonides

Lenders are competing to build the best online decision-making facilities for brokers in the belief that this will give them a clear market advantage.

As more lenders move away from paper-based processes, they are all bidding to offer the fastest binding decisions.

Last month, Platform launched the latest offering to the intermediary market, Click Decision. Sales and marketing director Guy Batchelor makes no secret of the fact that he waited to view other systems and let intermediaries identify some of the key elements they want from online facilities before finalising Platform’s system.

Intermediaries told Batchelor they wanted a system that was simple to use and gave binding decisions, as nothing frustrates them more than lenders reversing decisions once the application has been received.

Another feature requested by intermediaries was a cascading facility, where intermediaries only need to submit client details once, with the system then advising on which mortgage best fits the applicant’s credit profile.

The Money Centre managing director Mark Alexander says: “We have all used Platform’s system and it is incredibly easy to use. BM Solutions has been in the e-commerce market for about two years or so and GMAC for the past year. It is a case of all the lenders realising the benefits to intermediaries of placing business online.”

Platform has yet to offer an online application system but hopes to go live with this by the beginning of 2006. At the moment, intermediaries have to download an application form, which can be filled in on screen and then sent off. Batchelor says: “The online decision in principle is 75 per cent of the application, anyway. So it is not absolutely inconvenient. We will have online applications by the beginning of next year.”

GMAC hopes to have a cascading system in place by October, according to senior PR and advertising executive Anna Bennett. Already more than 95 per cent of applications receive a binding decision online, according to GMAC, which has abolished decisions in principle and instead gives point-of-sale decisions or binding decisions online.

GMAC claims the average intermediary can save time and money using its system, equating to 35,000 a year, based on an assumed procuration fee of 500 a case, with 10 cases completed each month. This figure includes savings in administration, extra cases being processed in the time freed up and uplifts in procuration fees for placing business online.

Bennett says: “We made some improvements this week with an easier product selection system and a new filter to help intermediaries find the products they want a lot more quickly. Feedback from brokers has been really positive as they know straight away where they stand.”

Preferred Mortgages marketing manager Simon Biddle has long been the voice of e-commerce in the sub-prime market. He says the main benefit of online binding decisions is ultimately the cost and, the more lenders which realise this, the closer intermediaries will get to a truly paperless environment.

By far the leader in the field in terms of longevity is BM Solutions, which pioneered online decision-making facilities for brokers and offers a 24/7 service. However, GMAC executive chairman Stephen Knight questions the point of this service, saying there are few brokers wanting to use systems at four o’clock in the morning.

Mortgages plc hopes to be ready to launch its system in the autumn. Like Platform, it has been looking at other lenders’ systems to assess what works and what doesn’t. Sales and marketing director Peter Beaumont says the main body of work has been completed and the lender is working on the aesthetics.

Meanwhile, Accord is moving towards the goal of being a 100 per cent online operation. Manag- ing director Linda Will says: “We are about 95 per cent online at the moment, so it feels like ‘What is the point of paper?’ We will be announcing soon that we are absolutely paperless.”

The next step for lenders may be electronic commission statements. The Financial Technology Research Centre says more brokers want this from lenders so they do not have to process large quantities of paper.

Director Ian McKenna accuses lenders of not being user-friendly and says: “Savings could be made if lenders and advisers made paying procuration fees friction-free.”

What is sure that brokers will stick with the lenders which make business a sleek and efficient process.

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