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Increasing competition combined with a dramatic surge in home loan applications, have caused an inflection point. Building societies must now re-evaluate their processes to remain relevant in a post-COVID world.

Many industries have worked tirelessly to combat changing market conditions caused, in part, by COVID-19, and the UK mortgage sector is no exception. Like a lot of lenders, building societies in particular have been forced to shift gears in order to be nimbler; continuously making changes to their lending criteria and product set to match demand.

The challenge

Home sales in the UK have been skyrocketing. Data from Twenty7Tec reveals that the volume of standard residential mortgage searches in March 2021 grew 27% in a single month. Despite lenders tightening their criteria, buyers were able to save more money, having decreased spending under lockdown. This is supported by the growth of first-time homebuyer deposits; in 2020, only 73% percent of those new to property ownership were able to afford a deposit greater than £15,000, but this year, that figure has risen to 87%. However, over 30% of mortgage applicants report that they found the mortgage experience stressful (Fig. below). Fast, efficient, and error-free mortgage lending is the expectation of today’s borrowers who are now accustomed to the anytime-anywhere digital experience that defines the modern lifestyle.

A competitive advantage

To win in this hot market, building societies have responded, in part, by offering more competitive rates. For example, Hinckley & Rugby Building Society recently launched a two-year discount mortgage with an interest rate of less than one per cent. This is consistent with consumer preferences as 99% of respondents in a global mortgage survey identified competitive interest rates as an essential factor in applying for a mortgage, followed by competitive arrangement fees. Apart from price, the largest opportunity area for building societies is to replace legacy offerings that perpetuate slow loan cycles, member and colleague dissatisfaction and high operating costs. In this saturated market, building societies that combine their reputation for personalised service with digital offerings can gain a competitive advantage.

Creating a unified lending experience enabled by automation, integrations and partner connectivity

There are three key areas that building societies should evaluate when choosing to replace their legacy offerings.

Lending automation

By automating the lending process from agreement and decision in principle, through underwriting and closing, building societies can deliver an integrated experience that delivers quicker communication and faster funding.

Partner portals

The surge in mortgage applications has caused a strain on third parties, including brokers and conveyancers. Building societies must focus on bridging the gap between their systems and these third parties to help enhance collaboration and eliminate the duplication of data entry in order to create a faster and more seamless process for borrowers.


Rather than try to be all things to all people, building societies must leverage integrations with technology partners to streamline and enhance the mortgage experience while simultaneously crafting a quick and modern homebuying experience for buyers rather than a risk-based credit process.

Building societies should look at the innovation that is happening in the SME sector as an example of how they can transform their lending processes. Recognise is a new SME challenger bank that received its banking license in 2020. Recognise was looking for technology that would ensure its relationship-based model would be delivered to its stakeholders. To do this the bank implemented Mambu, and paired it with the nCino Bank Operating System™ - two cloud-based systems working seamlessly together. This partnership has allowed the bank to quickly become operational by providing simple and streamlined SME lending. nCino’s intuitive workflow mirrors the loan journey, allowing applications from enquiry or referral, through to the loan drawdown, to be rapidly processed on a single, end-to-end platform. The technology helps Recognise meet various compliance obligations while providing valuable, timesaving automation in lieu of tedious, manual tasks.

Building societies are well positioned to leverage the benefits of technology to better serve their existing members - and gain new ones. However, to survive in this competitive environment, building societies should leverage technology partners to streamline the entirety of the mortgage process, from application through underwriting and closing. With an enhanced digital proposition, lenders will be able to increase overall conversion rates, reduce time-to-offer and gain operational efficiencies to not only weather the remainder of this pandemic, but gain competitive advantage into the future as well.

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Rob Martin
Rob Martin serves as the Technology Partner Manager at nCino EMEA, where he manages the technology partner programme, helping to align customer and partner needs to create a world class cloud banking platform. Rob has 17 years of experience in financial services and financial technology. As a result, he’s a passionate advocate for digital transformation in the industry; focused on how technology can help shape a best-in-class customer experience. Prior to joining nCino, Rob has held a number of strategic roles focused on building fintech companies. Rob holds an MEng in Electronic Engineering from the University of Warwick.
Rob Martin