What Can the Mortgage Industry Learn from the Financial Services Sector?

Mortgages in the US have been the subject of considerable speculation recently, as the largely unpalatable specter of the election has continued to loom large. It stands to reason that this dialogue should be largely negative, of course, particularly with mortgage rates predicted to rise exponentially and disproportionately to national earnings.

What Can the Mortgage Industry Learn from the Financial Services Sector?

While the state of the mortgage industry in the US may be better than initially appears, however, it remains a rigid and largely outdated market that has failed to move with the time. These deficiencies become apparent when the industry is compared to the financial services sector, which has far greater flexibility to deal with threats.

With this in mind, there is a great deal that the market can learn from financial services, including the following lessons: –

Leveraging Online Resources to Inform the Consumer

If there is one characteristic that underpins the financial services sector (particularly trading on the financial markets), it is the wealth of accessible data and information that exists online. This has resulted in the emergence of instantly accessible, virtual broker resources, which can be used by customers to garner detailed information and analysis in real-time. So whether users want to trade shares through CFDs or commit themselves to spread betting on the financial market, they have a single resource through which they can access everything that they could possibly need.

This is a lesson that the mortgage industry could learn a great deal from, particularly given the restrictive lending criteria and complexities associated with this market. By affording customers greater access to information, products and services, they could increase the efficiency of their operations and the success-rate of applications in the UK.

Reinventing the Mortgage Broker Service Through a Virtual Platform

At this stage, it is important to note that financial traders can use these one-stop platforms to execute orders and actively manage their portfolios. Essentially, this eliminates the need for a third-party broker when completing deals, which saves time for those who are looking to trade successfully on the market.

A similar concept would work well in the mortgage industry, where inexperienced customers and first-time buyers often utilise skilled mortgage brokers to achieve the best possible deal. By creating accessible and ‘live’ broker resources online, the industry could cater more effectively to the needs of their customers while also reducing the overheads associated with market leading operators.

This would simply require an evolution of existing technology, which is currently used by customers to enter their financial details and determine how much they may be able to borrow through a mortgage.

Maintain a Diversified and Balanced Range of Products

If you look at the financial marketplace and other areas of the fiscal service sector, you notice that the range of available products continues to expand and diversify. This evolution usually occurs in line with consumer habits and trends, as companies look to alter their range to deliver an effective and viable service.

While this is true to some degree in the mortgage industry, the rate at which new products are brought to market is far slower. There is also a lack of innovation within the market, meaning that customers are often limited in terms of the type of offers that they can access. Some of this is due to the restrictions placed on applicants, of course, while previous innovations such as the 100% mortgage (which contributed to the sub-prime mortgage collapse of 2008) have proved far from successful.

Still, the mortgage industry can learn a great deal from the financial services sector, particularly in terms of strategic innovation and adapting to suit the needs of consumers. This, along with greater understanding and communication between service providers and customers, would create a more progressive sector with genuine growth potential.

Melissa Thompson

Melissa Thompson writes about a wide range of topics, revealing interesting things we didn’t know before. She is a freelance USA Today producer, and a Technorati contributor.