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Interview: Steve Carruthers, Principal Consultant at Iress

Livia Thimotheo
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23 minutes

Can you tell me a bit about Iress?

Iress has been in the UK now since 2011, although its origins in Australia date back to 2000. In a nutshell, Iress is a technology company providing software to the financial services industry. We provide software and services for trading & market data, financial advice, investment management, mortgage (sourcing, advice and originations), life & pensions and data intelligence. Our software is used by more than 9,000 businesses and 500,000 users globally. We have 1,950 people based in offices across Asia-Pacific, Canada, Africa and Europe.

Here in the UK, we started with a small presence in 2011 and have grown through acquisition and organically to the recognised market leading position we enjoy today. Our software portfolio includes names that many brokers will be familiar with, such as MSO, Xplan Mortgage, Trigold, Lender Connect and The Exchange.

Can you tell me a bit more about your mortgage products?

There's a number of things happening in the mortgage space. One area of focus for us and the partners we work with is simplifying the mortgage journey and connecting everything up. Connectivity is a bit of a buzzword at the moment with key stakeholders across the industry striving to improve the customer experience and create efficiencies through a simplified connected journey. Our product portfolio is aligned to supporting this connected journey end to end encompassing software solutions for CRM and advice, for mortgage and protection quote comparisons as well as mortgage sales and originations.

So to give you a quick overview, brokers use Xplan Mortgage, Trigold and The Exchange to source and give advice on mortgage products and protection. Lenders use our Mortgage Sales and Origination system, MSO, to power either their broker portal or their direct business portal (or both) as well as digital enablement for direct to consumer and their backend originations. And, as I mentioned earlier, we’re also working with a number of partners across the industry, both lender and distributor, on Lender Connect - I’ll come back to this in more detail later.

And what do you do at Iress?

I'm Principal Consultant, Mortgages at Iress and have been in the role since February this year. My previous roles over the last thirty years or so have all been with lenders. I’ve worked with lenders of varying sizes and sectors from large corporate banks to new challenger banks and in the regional building society world. I've taken this role with Iress as Principal Consultant very much to work with lenders, to understand their strategic needs, their digital mortgage journey and platform needs moving forward. A core function of my role is consulting with lenders, helping them understand how current and potential new technologies could support their strategies and their business needs. I then work closely with the teams here at Iress to ensure that our products meet the needs of lenders, their broker partners and end consumers as well.


So what are the lenders asking for?

One of the challenges that many lenders have is that they have disparate legacy systems. If they are to move forward they need the ability to use new and future-proof technology that integrates with their existing systems. If you're a new challenger bank or you're a new mortgage lender you can buy off the shelf and away you go. It is much easier for that type of lender. But obviously for the majority of UK lenders, whether they be banks or building societies, this isn’t the case. They need robust software that integrates with existing systems, is easy to connect to and is safe and secure. They're looking for systems that offer flexibility and an opportunity for them as a lender to maybe diversify their business models into other lending areas that they might not be in at the moment. 

It's a tough market for lenders just now to compete and differentiate their offerings. Mortgage product pricing has never been lower, creating real margin pressure for lenders. Many lenders are looking at areas other than just standard ‘vanilla’ purchase and remortgage business. They're looking at more niche markets and need a technology provider that supports this. 

Data security is also front of mind - we increasingly hear about cyber-attacks across many industries and financial services is no different. So lenders want to have the confidence that the partners they're working with provide safe and secure systems. These are just some of the many considerations for lenders right now – they all have busy agendas and competing priorities!

How is Iress helping them?

We have a strong track record in supporting lenders and delivering what they need. Certainly through our mortgage sourcing software we are currently supporting in excess of 15,000 regular users in terms of searching for and advising on mortgage products. Many lenders in the UK, will use Iress mortgage sourcing (Trigold) to distribute their products to the market. Then we've got our market leading Mortgage Sales and Origination software, MSO. Atom Bank has taken advantage of new technology and functionality offered by our software and we worked closely with them to deliver the next generation of MSO in 2015.

MSO provides lenders of all sizes with a highly configurable and functionally-rich solution to support mortgage strategies for scalable and efficient end-to-end workflow. MSO manages the full mortgage sales and originations process, from initial enquiry up to release of funds and on-boarding to servicing platforms. Following successful deployment with Atom, we have had continuous interest in MSO with TSB also deploying live in 2017 and most recently Yorkshire Building Society in July 2019.

In addition to Atom, TSB and Yorkshire Building Society we announced a further new partnership last year with the Coventry Building Society who we're working with at the moment in terms of integration and implementation of MSO. More recently we've just announced new partnerships with the Leeds Building Society and Principality Building Society in the UK as well as two Australian lenders, Xinja and Volt Bank.

We’re also speaking with a number of other lenders across the market, lenders of varying sizes and who operate in smaller niche markets, self-build for example. You know, often you'll hear people talk about tier 1 lenders, the big six, the high street lenders etc. We do have relationships with those too. However, our MSO digital technology is now being used by lenders of all sizes across the market who are benefitting from its omni-channel and advanced integration capabilities for straight through processing, and it is a digital enabler. Something many are seeking to achieve.

We recognise that many lenders have different needs and are operating in different niches and different spaces. Our products meet their needs and allows for personalisation through configuration, whether that be through brokers or through a direct channel. We recognise that lenders have consumers who will come to them directly over the telephone and via the Internet, walking into their branches or are going to see a broker. So our products have been developed to support all of those acquisition channels and the different needs.

What is the project that is getting you most excited?

I think right now Lender Connect is a really exciting project. The possibility to connect up existing technology is a challenge but it is equally exciting. We're working closely with lenders and distributors through a mortgage technology forum to discuss shared challenges and goals. The one overriding view that all participants hold is that technology is the gateway to delivering an improved customer experience. 

This forum, we’ve called the ‘Lender Connect Forum’, meets every quarter and it’s a refreshingly open and collaborative environment. There has been significant progress made, with a number of lenders and distributors committing to our Lender Connect technology solution that will deliver better customer outcomes. We've developed the software and it's currently being integrated with lenders and distributors existing platforms. I can't say too much at the moment in terms of who's going to be the first to launch, but we expect to see improved connectivity through this become a reality before the end of 2019.

For me it’s a kind of a game changer. It's difficult to describe as there's nothing tangible to see, it's not a physical system that someone inputs to, it all goes on in the background. But the benefits are that it allows brokers and intermediaries to use their existing CRM system and to integrate with lenders' existing systems and it all goes on in a black box ‘in the ether’, so to speak.

It creates a whole lot of efficiencies with brokers only having to key data once for lenders to capture most of the information that they need. There may be a small amount of information that they still need to capture for the lenders own particular needs. Then in the next release it will also feedback to brokers as well in terms of progress that their applications are making with the prospective lenders that they've sent applications to as well. So yes, that's pretty exciting.

Tell me more about Xplan Mortgage and this new Eligibility service.

Xplan Mortgage is a specifically configured software solution that brokers currently use in terms of managing the advice process for sourcing mortgage products or protection products. It provides flexible, multi-device whole of market mortgage and protection sourcing with a range of tools to support client engagement, sales and recommendations.

We've recently added a new feature called Eligibility. It allows brokers to, in effect, do a search on an aggregated lender basis to find the right products for a consumer in one go, in one hit. Without having to go to individual lenders’ websites and check affordability and eligibility across each individual lender's website - they can do this via the one tool.

It’s something we have developed in partnership with Experian’s HD Decisions, as we wanted to make it easier to advise on and apply for a mortgage, stripping out inefficiency and unnecessary delays. The broker collects customer information then uses the Xplan Mortgage eligibility service to send information, in conjunction with HD Decisions, to lenders’ websites. At the same time, of course the system does a credit bureau check as well, it's a soft footprint. Eligibility will report back to the broker the lenders that the particular client could be eligible for. So it's a real time saver, it creates a lot of efficiency, allowing the broker to do it in one transaction, as opposed to going to each individual lender website.

Iress has recently launched a mortgage client portal, what are the main benefits for brokers and what sort of response have you had?

When we're buying anything, whether that be on Amazon or direct from a retailer’s website or financial services, as consumers we like to have the ability to track how things are going and check on progress. Xplan client portal simply allows consumers the ability for secure communication really efficiently and effectively with their broker. It also, again, creates lots of efficiencies such as allowing document exchange. So if there are documents that need to be uploaded and authenticated, that can be done via the portal, using digital signatures both ways. There's also the ability for a broker to personalise and brand the portal using a range of templates and website designs that they can then easily align with their own client portal and brand.

What can you tell us about the lenders who are using MSO? Who are they? What do they have in common? What makes MSO right for their business?

I've partly answered that one. Atom Bank were the first lender to take the latest iteration of MSO and as we know they were a new digital start up. Consumers interact with Atom via an app and brokers through a dedicated portal, using mobile technology which our software supports, so there was a really good alignment. We were looking to give MSO the flexibility and appeal across a wide spectrum of lender types and so our partnership with Atom fitted well. They had a lot of really new and fresh ideas as to how they wanted to serve their customers and to support brokers. That really worked well for us as we developed MSO to ensure we were providing something that was fit for purpose, to meet their needs. On the back of that success it attracted other lenders to our proposition. TSB was the next lender to come along, then Coventry Building Society, Yorkshire Building Society, the Leeds Building Society and Principality Building Society. And our lender conversations are growing!

One of the key benefits, and certainly one of the attractions, is that it delivers consistency across the market. We believe by early 2020 in excess of 35 percent of all UK mortgage applications will be transacted by lenders using our MSO software. So from a broker's perspective they're using a lender portal and software that's consistent in terms of the functionality, process and user experience. The branding will be different with each lender offering a differently branded version of MSO however from a consistency perspective, it's simple and it's easy to use. Brokers are creatures of habit as we know and they will feel comfortable using a system that they understand and they recognise and they're familiar with.


In a recent report, Iress checks the pulse on the use of robo-advice. I don't feel like the industry has reached a consensus on how to use it yet. What is Iress' opinion?

Our view is very much informed by the views of lenders and intermediaries that we've assimilated through the annual Iress Intermediary Mortgage Survey which we published a few weeks ago. We did ask a number of questions in the survey around digital advice or robo-advice and it's really interesting the responses that we received. There's definitely different views and different understanding of what robo-advice really is.

So robo-advice was born out of the investment and wealth market and there are some examples where it works and does “what it says on the tin”. It's automated or ‘robotic’ advice without human intervention. For the mortgage market, however, the term ‘advice’ in this context isn’t entirely accurate. In fact, for many in the industry, there is now evolving clarity that what the gap is and how automation can fill this, is enabling a simpler or guided service as part of a wider proposition.

For me it remains to be seen how and if it will work in the mortgage market. I think machine learning and decision tree type advice does exist in some places and we've seen some digital brokers try to harness this over the last couple of years. I also think that there's a view from the intermediary sector, particularly, that it's seen as more of an enabler. It's a technology enabler to create a more efficient process, a more efficient journey that takes the heavy lifting out of the process and allows brokers more time with their customers.

I also believe that it's not one size fits all either. I think there will be life stages or types of customer when robo-advice or digital advice could be very appropriate. An example being someone who's got very straightforward and non-complex needs, perhaps a like for like remortgage or product transfer. I’m aware that lenders and brokers are looking at how they can harness that type of technology. I do firmly believe though that there will still be a need for face-to-face advice. Increasingly, consumers have got more complex needs and they want to talk to somebody. They might start their journey online. They might start any digital online type advice scenario and may reach a point where they think, “you know what? I actually could do with some advice here”. So they may then turn to a broker or an adviser and go for more specialised face-to-face advice. 

One thing that will be key to this kind of ‘hop-on / hop-off’ approach will be connectivity. After all, if the customer has spent time in putting their details to an automated service, when they do choose to speak to a broker, they want that broker to have those details. I sense that a hybrid model of part human / part machine will evolve for consumers who want a level of advice coupled with a more efficient experience. 

It's an evolving and emerging technology and one that I believe will continue to evolve. But I do think it will never replace the value and professional service of an intermediary who provides advice in more complex and bespoke scenarios as well as for those consumers who do not have the experience of the mortgage process.

What are the other technologies that mortgage companies should embrace in order to prevail in the next years?

The survey that we did recently covered a number of the key technology themes. For example, Open Banking, robo-advice - which we've just covered - then there’s blockchain and APIs. So lots and lots of different sorts of technologies that are routinely spoken about in the marketplace. I think that the two in particular that are making progress and offer opportunity are Open Banking and API technology.

We've already seen some momentum here, in fact earlier this year, Marks & Spencer’s Bank and Bluestone announced that they are using open banking technology, which is great. From the survey that we did, 98 percent of lenders that participated in the survey felt that Open Banking will deliver benefits to the marketplace. It's a growing technology and there's still a significant lack of awareness and knowledge on the consumer side. I don't believe that many consumers truly understand what Open Banking is. There's still work to be done to ensure consumers understand the benefits and how their bank account data is used in the mortgage process and also that they are comfortable with providing permissions for lenders and or intermediaries to access their bank account transactions.

On the assumption that we get there, consumers understand why and how it works and what the benefits are, I think that it will help to quicken up the process. From an underwriting perspective, with my old lender's hat on, rather than asking for bank statements and waiting for them or access to printed documents, I've got the permission from the customer and I can access the customer's bank details and I can see very detailed transactional information. That sense of immediacy allows a decision much quicker in that scenario. So I do think it will add a lot of value in that respect and I do see more and more lenders using Open Banking as they build it into their proposition strategies. Like many new initiatives and technologies they'll test it first, perhaps in the direct space, before offering in the wider intermediary space.

API technology is already being used and has actually been around for years in other industries. We’ve only started to embrace APIs in the mortgage industry over the last few years or so. Almost every juncture, every event you go to, someone's talking about API technology and who's opening up their APIs and who's connecting to who etc. In part, the challenge many lenders and distributors talk about is who do you connect with? Everybody's sort of backing everybody because no one's quite sure who's going to emerge as successful and with a sustainable model. 

Without doubt the biggest driver is to try and create a smooth seamless journey and API technology allows that to happen. Nobody wants to rekey information multiple times so hopefully the days of paper applications and printing and rekeying in data are long gone. Brokers want to key in the data at a single point of entry one time and then the whole thing to be seamless thereafter. API technology allows that. I do think though there's still a way to go in terms of a whole connected journey because not everybody has that ability right now. There'll be a number of lenders at different stages of the journey. In many respects, there's a fair amount of catch up to be played. Equally, I've been around long enough to know that the mortgage market doesn't move at the speed of light. Change doesn't happen that quickly.

Maybe I'm being young and naive, but I feel like there's a tech momentum in the mortgage industry.

I agree, I've spoken to numerous people in the industry who all feel that we stand on the edge of something fairly - not so much seismic - but fairly fundamental. There's a significant change happening and will continue to happen over the next two to five years. This change is driven by what technology can give us and how as lenders, as intermediaries, as technology providers, how we harness that and how we work together. Much of the solutions and success we are all striving for is about how we collaborate, how we partner together to make sure that we build products and solutions that really do meet everybody's needs and ultimately improve customer outcomes.

We want to transform the experience of obtaining a mortgage. Nobody actually wants a mortgage, what they want is to buy a house, or improve their house and we want to make that journey as easy as possible. To all intents and purposes the process for obtaining a mortgage and buying a house hasn't changed in years. We all follow the same age old sequential process where someone finds a house that they want or they have a house that they want to improve or to grow from. 

They need finance so they have to obtain a mortgage loan whether that's through a broker or going directly to a lender and they submit an application. An application is made, a valuation is instructed, the legal conveyancing then happens and the mortgage eventually completes with funds released. That process hasn't changed much in 30 years. Technology has helped improve some aspects and created some efficiencies with elements of the process happening a bit quicker however the process remains fundamentally the same. There’s a real opportunity to disrupt and improve that process, really turn it on its head and inject some much-needed innovation, so we’re continually collaborating with key partners to maximise opportunities.


And how do you think this process you've just described is going to be in 5 and then 10 years?

I'm hoping it will be different in five years but I suspect it's not going to be vastly different. With everything I've touched on earlier around new technologies and how everybody embraces technology and change. I think we'll see certain elements of the process improve and happen quicker but I’m not sure to what degree.

What I envisage happening at some stage is you see a property you like, take a photo of it with your smartphone and almost instantaneously, using real-time technology and big data, get an immediate valuation. Perhaps using AVM technology the energy efficiency rating is also included. You are then able to find a quote for a mortgage and submit an application to your lender of choice. All of that could happen pretty instantaneously via a smartphone. 

However, there are a number of stakeholders in the process that need to digitise the data to allow it all to happen. We’ve seen technology significantly improve application to offer timescales, which is great, however it’s post offer during the legal conveyancing process where many delays currently happen. I’m aware that a lot of stakeholders are working really hard on improving the conveyancing process so I think (and hope!) that's where the biggest gains will be in the next five years or so.

In summary, I can see technology taking more and more of the heavy lifting of the process, allowing brokers and mortgage advisers more time with their customers. But regulation will continue to have a part to play and will impact the market. A key aspect of my role here at Iress is to work with new and existing lender clients, distributors as well as the regulators and trade bodies in the UK and I'm working closely with the likes of UK Finance, IMLA (Intermediary Mortgage Lenders Association), AMI (Association of Mortgage Intermediaries) and the FCA to ensure that I understand their members’ needs and how they are interpreting changes in the market, changes in regulations. 

A good example being the FCA's recent Mortgage Market Study that describes how consumers should have access to more tools to find brokers in their locality and also to have greater awareness of the mortgage products they're eligible for in their given set of circumstances.

The regulator also appears more comfortable with non-advised (or execution only) mortgage sales, in the right circumstances. So I can see there being some change in the marketplace on that basis with consumers going direct to lenders who are using new and enhanced technology solutions to create propositions for that type of business - perhaps working closer with price comparison websites and aggregators. Equally brokers and intermediaries will evolve their models to adapt to these and other changes, embracing new technologies to widen their distribution reach and allow them access to new markets and customers as more lenders offer products in new and niche lending areas.

So what's in the future for Iress?

We'll continue to build on the very positive momentum we’ve gathered already. We're growing our lender client portfolio, we're really proud of the relationships we’ve made. We're talking to a number of other lenders of varying sizes and we're going to continue to work with all of them to develop our products, like MSO, to ensure they continue to be fit for purpose. That they’re meeting those lenders needs, in the here and now, and help them with the lending opportunities they want to move into as well.

It's about how we collaborate with stakeholders and partners to develop the proposition across the whole end to end journey connecting everything up seamlessly. One of the challenges we have is making sure that everyone knows who Iress is and what I'm doing here today is to try and help build greater awareness of the Iress brand, our proposition and how we add value to lenders, distributors and consumers.


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Pictures from Judit Toth

Livia Thimotheo

Livia is a UX Designer at Dock9. She's worked in digital products in the financial sector including applications, websites and chatbots. The Design of Everyday Things was her first design book and it completely changed the way she sees the world.