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The right line for loans

Over the last few weeks, there has been a stream of announcements from service prov iders and life offices as they launch their electronic new business services.

It is not only in the life and pension industry that significant advances are being made with the adoption of e-commerce. About a month ago, IFonline went live with its electronic trading platform for the mortgage industry.

Through its system, mortgage advisers can submit electronic applications to 41 len ders. A further 16 lenders have signed contracts and are in the process of integrating with IFonline. It is important to recognise that the company is in no way connected nor should it be confused with Halifax subsidiary Intelligent Finance.

IFonline has developed an environment that allows any mortgage adviser to connect easily with any lender on its system. This provides advisers with what appears to be an unparalleled end-toend solution.

Having identified the lender they want to recommend and provided they are one of the 41 lenders able to accept electronic applications, the adv iser can complete an e-form, carrying forward the data already entered in the product research process.

As an electronic form, it can recognise which questions to generate relative to previous answers given. Consequently, there is no longer the need to trawl through questions on salary where you have already identified the applicant as self-employed.

As each answer is given, it is checked against the lender&#39s specific criteria for the sel ected product in case any response does not adhere to the criteria. If this happens, the user is aler ted. However, the application can still proceed to submit cases that have been agreed. This process greatly reduces the scope for errors.

Having submitted the application electronically, the system allows advisers to create a full compliance record for Mortgage Code Compliance Board purposes. In addition to current requirements, the service will already produce a onepage key features summary. This is a requirement that is widely expected to become mandatory once the current review of mortgage compliance is completed.

Although there are a number of other mortgage research and compliance tools, this is the first service that I am aware of that not only links both these function to electronic submission of applications but is also entirely free to advisers. As most of the existing mortgage sourcing packages charge a subscription, this free alternative is, at the very least, likely to put pressure on the other suppliers to cut their fees.

All costs for using the service are borne out of fees charged to lenders for completed applications. From the lenders&#39 perspective, the arguments for supporting a platform like this appear compelling.

Not only will they get applications more quickly than by post, they can be received straight onto their systems. Because a validation process is carried out as the application is completed, this drastically reduces, if not entirely rem oves, the number of cases that can be rejected or that do not indicate the product required.

Typically, lenders will print 20 applications for every one they receive. Using this kind of system, not only are the printing costs saved but there is no longer the need to distribute new forms or marketing literature on a regular basis. They just alter the forms or other information on the system.

As lenders control the product information on the system, they can also remove products more quickly or launch new ones in the event of rate chan ges. All these changes can create significant cost savings for lenders.

Further developments currently being built include a full tracking service to allow users to find out the progress of applications without having to make calls to lenders and an automated credit-scoring service based on the individual lenders&#39 own criteria to further reduce the chances of applications being rejected. Both these services should help to reduce processing costs for lenders and advisers.

As with the new business services launched in the life and pension market, the crucial issue is now one of take-up by advisers.

With lenders making significant investment to integrate with IFonline, they will now no doubt want to see significant numbers of advisers taking advantage of these services before supporting further enhancements. Advisers now have access to highly sophisticated tools to enable them to cut their own costs via electronic trading. In my view, these should be embraced at the earliest opportunity.

Regrettably, a small number of lenders, most conspic uously Halifax and Abbey Nat ional, have chosen not to support these online application tools, preferring to prom ote their own extranet solutions. This is in stark contrast to the life and pension market where providers tend to see their extranets as complementary to rather than in place of service providers such as IFonline.

It is possible that increased regulation in the market will make these lenders recognise that, by failing to support services that offer access to a full range of lenders, they are sev erely undermining the mortgage compliance process.

Operating via a single len der extranet makes it far more difficult for advisers to demonstrate that they have met their obligation to research fully the market. After all, most mortgage brokers I know fiercely defend their right to give their clients a full choice of lenders. Making maximum use of this new service is an ideal way to prove to Halifax and Abbey the errors of their ways.

IFonline is running a series of roadshows to explain the service to advisers. Visit for more details.


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