Technology is replacing paper in equity release
However, adoption of technology in the later life sector has tended to lag behind the main market. Unlike the residential market, equity release processes can often be largely paper-based still. This includes the valuing and conveyancing aspect of the transaction, which means that getting from the production of the key features illustration (KFI) to completion can take weeks at a time.
Digitalisation is happening slowly, though. The last few years have seen rapid growth in the market. With customers unlocking nearly £4 billion of property wealth in 2018 alone, many lenders are investing more in technology in order to meet a predicted uptick in customer demand.
The evolution of API integrations is gathering pace. Mortgage market aggregators such as Air and IRESS are leading the way with this, which means that the entire end-to-end process, from sourcing and KFI generation through to application submission and loan completion, can now be achieved in ways that were unimaginable just a few years ago.
The development of systems like online application approvals, electronic tracking and SMS updates is also bringing huge benefits for both clients and advisers. With new platforms like these, advisers can track the progress of their clients’ applications, meaning they are better able to manage customer expectations and deal with any issues as and when they arise.
In future, we are likely to see lenders deploying technology to drive further efficiency in the equity release process. The introduction of artificial intelligence and transaction processing systems will enable much smoother sales for advisers and customers alike, shortening the advice process for all involved.
At more2life, our own fastpath portal has already shortened application times significantly, with our fastest KFI production now standing at six seconds, our fastest application to offer (including valuation) taking just two hours and 26 minutes, and our fastest application to completion clocking in at one day, nine hours and 26 minutes.
With benefits like these on offer, further investment in technology starts to look more attractive. Customers now expect the mortgage market to engage with them in digital channels. Today’s forty-somethings are tomorrow’s retirees, and they will expect to be able to interact with their adviser and lender digitally.
This ‘push for digital’ should prompt later life lenders to build ‘digital first’ solutions and technology. Investing in transformative tech today will provide tomorrow’s digitally-savvy retirees with flexibility, access and choice in the click of a button, but will also take cost out of the equity release process for advisers. The later life sector is a growth market and we can expect the distribution capacity in the marketplace to increase as more advisers look to cater to an ageing population with changing demands. Technology can empower advisers to work smarter for clients, putting advice at the heart of the later life sector and streamlining the other elements of the process.