"With more specialist opportunities arising, it’s those advisers who can best utilise their tech advantage who will be in a prime position to steal a march in this area."
We’ve seen a number of new entrants across the specialist lending markets really push the tech envelope in recent times and lay the gauntlet down to the more established players to up their game. There are also many more lenders waiting on the sidelines for the right permissions and funding lines to also make a major impact from a product, systems and service perspective.
The age-old excuse that the specialist markets are too complex to accommodate many technological advances have quickly dried up. Solutions have evolved and been developed so that lenders operating in these sectors can seamlessly reduce many of the front and back office barriers of entry which have led to many advisers avoiding or simply ignoring some of the more alternative lending streams in the past.
Of course, this hasn’t happened overnight. Nobody has simply clicked the on/off switch to reboot the system, this has been a gradual movement rather than one big tech lightbulb going off. Although, through being the first system to develop a full two-way DIP integration with a number of specialist lenders, we do like to think of ourselves as pioneers in this particular marketplace. And we have helped pave the way to a faster and simpler online avenue for intermediaries to carry out a full decision-in-principle, without the need to rekey any data, through a variety of specialist lending propositions.
But why is the specialist lending marketplace so important for intermediaries?
Fundamentally, the needs of borrowers across the UK have changed and continue to change. As have, and are, the requirements of the intermediary market from an availability, simplicity and efficiency perspective.
Technology, when implemented correctly and backed by genuine market expertise, is providing brokers and their clients with a gateway to a range of products which might not have been as widely accessible. Take the recent Specialist Lending Study from Pepper Money for example. This found that 15.16m people have some history of adverse credit, including missed credit payments, defaults, CCJs, unsecured arrears, secured arrears or entered a debt management plan. It also found that nearly half of people (49%) who have missed one credit payment say have then gone on to miss further credit payments.
According to the study, 13% of those who have experienced adverse credit in the last three years say that they intend to purchase a property in the next 12 months, which equates to just over 900,000 potential mortgage customers with adverse credit in the coming year. However, 84% of all respondents say the current economic environment will make it harder for them to get a mortgage.
While this is a significant number in its own right, it only represents a small proportion of the specialist lending arena.
As outlined in the commentary around this study, it's clear that the cost-of-living crisis continues to take its toll across the UK and is impacting those people with adverse credit the hardest. However, while these are hugely significant numbers in their own right, they only represent a relatively small proportion of the specialist lending arena. Meaning there is a huge opportunity for the intermediary community to support a plethora of multifaceted borrowing requirements from individuals, families, landlords, developers and small business owners.
With more specialist opportunities arising, it’s those advisers who can best utilise their tech advantage who will be in a prime position to steal a march in this area. A march which will help generate stronger levels of revenue and allow them to service a wider array of client requirements as individual borrowing scenarios and financial situations become ever more complex.
