Livia: Can you tell me a bit about Vida Homeloans?
Louisa: Of course. Vida Homeloans launched in October 2016 to support the specialist Intermediary market and work within both residential and the Buy-To-Let (BTL) sectors. Generally supporting customers that are underserved by the mainstream mortgage lenders.
Livia: Can you tell me a bit about yourself and your background?
Louisa: I’ve been in the financial services for 26 years, most of my career was actually spent at Bradford & Bingley and Mortgage Express. Bradford & Bingley was the retail side of financial services and Mortgage Express purely looked at the intermediary lending primarily in the BTL sector. I left there after the credit crunch in 2011. I spent a bit of time doing some consultancy work - which I loved as it allowed me to spend time with my five year old daughter which was even better. Then I joined Leeds Building Society to support their intermediary proposition. I spent two years there and then two and half years ago I joined Vida Homeloans to help start a brand new mortgage lender.
Livia: As a specialist lender how does Vida identify the need for new products?
Louisa: In the very beginning before Vida launched, we looked at the whole of the marketplace and said “ok, where are the gaps?”. That's what we did ahead of launching and we came up with the lending criteria which filled those gaps. From there it is quite difficult to actually look for new opportunities simply because you already covered most of them but we are constantly looking at new opportunities to help those underserved by other lenders.
Naturally, as the world evolves, as people and circumstances change, then the likelihood is that they need help with their finances in a different way. So a great example of that would be someone that is newly self-employed. Some mainstream lenders choose not to support them, however, from a specialist perspective, we can. We only need to have a 1 year trading account and that's a great opportunity for us to be able to service their needs.
Then we started to look at things like first-time buyers and what's happening in that market. The feedback is that a lot of first-time buyers can't get onto the property ladder. Not necessarily because they can’t afford the mortgage payment, but because they can’t afford to save the deposit. That's how we came up with the Helping Hand proposition which is where parents can help get their child into the property ladder. That fits beautifully with the Bank of Mum and Dad which is a top 10 lender.
Generally we talk to our brokers and say what is it that you are not finding to help your customers. If a customer wants to get a mortgage, why should they not? We try and fill the void.
Livia: So you basically listen to the brokers and create a product.
Louisa: Always. When we launched Vida Homeloans, what we chose to do was take on Key Account Managers, not BDMs. We looked for Key Account Managers that have around 10 years of experience in the mortgage industry. They have really good established relationships and they can build on those relationships further with a particular broker. They can go out and ask the brokers what is it that you need, how many customers are walking through the door that you’re not being able to service and why. They get a lot of feedback that way and helps us to adapt our proposition to help them.
We've also got a telephony team here in Staines and they talk to between 250 and 300 brokers per day. Again, as part of that conversation, it’s “What is it that we are not being able to fulfill?”.
Another great example was Expats. We were getting regular calls from Intermediaries with customers living in Australia, for instance and we weren’t able to fulfill their needs. So we looked into that and actually now we have a proposition that can help them too. So we listen all the time and try and develop and when we do develop something new, we go to market and ask the market first, before we launch it so make sure its what brokers want.
Livia: How is Vida leveraging technology to improve business and how are you doing that?
Louisa: Vida has a fantastic website, it’s absolutely stunning and it’s commented on by a number of brokers on a regular basis. We lifted the front-end so the window to Vida is really strong; it's really accurate and the brokers can find virtually everything they want whilst in there. As a new lender we decided to establish an online proposition for applications and DIPs, allowing a broker to track their case from DIP all the way through to completion even to the point whether procuration fees have been paid. They can upload documents as they go on, whatever we need from them, or ask for additional documents to support the case. Everything is in real time and it tracks the case from start to finish and into completion, so we support the broker in the front-end.
As far as the back-end is concerned we are establishing new ways of working. We are looking for a fully automated solution which will come in time. But we are very aware of the fact that we need to be able to fulfil the needs of both the consumers and brokers alike.
Livia: This is a good follow up to the next question. How do you balance technology and the human-human interaction?
Louisa: It’s incredibly difficult and the reason being is because in the specialist market it is not one size fits all. We have 31 underwriters that work through a variety of different sites, of which some of them are homeworkers. Some of them work in our Skipton office and a large majority are in Staines. A case comes in and within 24 hours it will be looked up by an underwriter to make sure that it fits all the aspects of our criteria and our process. They will then take it from there to make sure they go and ask for the right documentation to support the case.
As much as we can automate things to make it slicker and easier for the broker, we have to have that hands-on approach as far as the underwriters are concerned.
Livia: How is the digital transformation in the mortgage process changing the relationship with the customers?
Louisa: With the end consumer, I think that from a mainstream perspective its changing because they will use aggregate websites. They will go and talk to their brokers through different means. So it may well be that when they get to a certain point, they will fill in a DIP for example. They look at it and then it goes to a broker who maybe buys that lead as a customer. I think the customers are getting to a particular point and then go “Ah, actually I’m not confident with this at all, I need to speak to someone now either face-to-face or by telephone” but I think that over time, if you have a mainstream remortgage customer that has done that transaction several times and is very confident, then they will go down the fully automated solution. That's absolutely fine for them.
But in the specialist market we are some way away from that because the customers needs are very different. You get to the point where you need that human approach. So I think there is an overarching lack of confidence in the consumer world to take it all the way through from start to finish.
With mainstream customers who have a 50% LTV and have completed this transaction several times, all they want is cheaper rates, they don't want to borrow any more money, everything is fine - that works in a fully digitised solution. From a specialist perspective I don't see that solution anytime soon. From a mainstream proposition I think we are probably as little as five years away from having a relatively automated solution.
Livia: How is the digital transformation in the mortgage process changing the daily relationship with the intermediaries?
Louisa: The thing is we are all in different stages within the whole process. We have some lenders that are working with APIs and that's working really well. But actually the APIs are a one-way API or, say, a DIP to an application or a broker from the CRM system to a DIP and then it stops. So there is various different parts of that, I think we’ve got a lot of brokers that have integrated solutions into some lenders but not that many. I think that transaction has a long way before it evolves into a digitised transaction. I heard some statistics recently that suggests less than or 25% of brokers don’t have websites and of them only 8% have an interactive website. So actually that in itself tells you we are a long way away from having that level of interaction or totally digitised interaction, in my view.