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Coming home to the cloud

How digital transformation is shaping the future of mortgages

Publishing date: 27 September

For today’s mortgage lenders, the challenge is clear: How to deliver the most competitive and cost-efficient products while providing a superior customer experience. To be successful, lenders must embrace digital transformation, leveraging the latest technology to streamline operations, reduce costs, and meet the evolving needs of their increasingly tech-savvy borrowers.

The rise of online platforms and mobile apps has revolutionised mortgage lending, turning it into a highly competitive, commoditised market

The global mortgage market is marked by both opportunity and uncertainty. Despite forecasts of global growth, the retail mortgage sector faces significant challenges.

Declining housing stocks and mounting economic pressures on borrowers are creating headwinds that threaten traditional mortgage models. As households navigate these turbulent waters, fintech innovations are transforming the way they buy, sell, and manage mortgage debt.

No longer confined to traditional brick-and-mortar institutions, borrowers now have access to a wide range of lenders at their fingertips. This shift has intensified competition, particularly in robust home-owning markets such as the UK, Ireland, Australia, and New Zealand, where lenders are under pressure to offer the most compelling rates and services in an environment of rising interest rates.

New players are disrupting traditional business models and exposing gaps in legacy capabilities

The mortgage industry is witnessing a wave of disruption as new players enter the market and incumbent lenders struggle to keep pace. Tier 1 banks are diversifying their offerings, while fintech lenders are breaking into open markets with innovative products and services.

The rise of globalisation, mergers and acquisitions, and disruptive broker networks is reshaping the industry, moving mortgages from a market built on trust to one driven by price, where the lowest rates win.

Many traditional lenders are scrambling to adapt to the pace of change. In many cases, their existing infrastructure is ill-equipped to deliver the diverse range of tailored offerings and digital services that today’s borrowers demand. Legacy systems, with their high costs and inefficiencies, are holding lenders back, making it difficult to compete in a market where agility and innovation are key.

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Revolutionise mortgage lending with cloud-based tools

How switching your lending core to the cloud can help you build innovative new mortgage lending solutions without compromising financial performance, outpacing skills or incurring high infrastructure costs.

Digital transformation is needed now

In this rapidly changing environment, digital transformation is not just an option — it’s a necessity. Regardless of the type of mortgage lending business you operate – a bank, building society, credit union or fintech - any new lending platform must deliver a clear cost advantage.

This means improving overall efficiency, reducing IT costs, and unlocking new opportunities for growth. At the same time, it must enhance the borrower and broker experience, while meeting the consumer’s growing expectations for fast, transparent, and digital solutions.

However, achieving these goals is easier said than done. A Whitecap study of mortgage lenders across the UK, commissioned by Mambu, revealed that lenders with legacy and monolithic systems - and no API capability - had fragmented processes, lacked a seamless front-end, and had difficulties integrating third-party systems. The majority suffered from poor automation (90%), and a poor or outdated customer experience (80%).

The benefits of cloud-based solutions

In contrast, cloud-based solutions offer a range of benefits that can help lenders overcome these challenges and thrive in the digital age. These benefits include:

  • Efficiency and flexibility: Cloud-based platforms allow lenders to quickly adapt to changing market needs and easily integrate with other digital tools. This flexibility is crucial in a market where speed and agility are key to staying competitive.
  • Cost and security advantages: By moving to the cloud, lenders can significantly lower their IT and maintenance costs while enhancing security and compliance. Mambu, for example, adheres to a shared responsibility model that implements best-practice architecture and externally verified security controls, as evidenced by ISO Certification and SOC 1 reports.
  • Better customer experience: Cloud-based solutions enable faster approvals and more personalised service, which are critical to meeting the expectations of today’s digitally savvy borrowers.

The benefits of digital transformation are not just theoretical — they are already being realised by forward-thinking lenders around the world

Mambu customers have seen firsthand the advantages of leveraging a cloud core to power their lending operations.

With an A$11bn portfolio under management, fast-growing Australian non-bank lender Bluestone sought to develop new products at scale without the burden of its existing legacy core banking system. By migrating to Mambu's flexible next-gen cloud banking platform, Bluestone has streamlined its operations and expanded its ability to offer innovative products to its customers, fuelling its growth journey. As a result, they saw an uptick of 25% growth on lending operations in the quarter following the implementation.

In the UK, newly launched mortgage lender Interbridge Mortgages has leveraged Mambu to power its entry to the UK market through its second-charge mortgage offering. In just nine months, they brought their second charge mortgage offering to market with 16 mortgage product variants to fit diverse customer needs. Three months post-launch, they’ve already supported 1,000 customers across England, Scotland and Wales and distributed £60 million in loans — all powered by Mambu.

Another great example is League Data in Canada, the technology partner for the Atlantic Canadian credit unions, chose Mambu to empower its member credit unions which represents more than 320,000 members. Through open APIs, Mambu seamlessly integrates with other off-the-shelf software solutions, providing League Data and the Atlantic Credit Union system an even greater user experience, as well as sophisticated digital tools and services, in a more cost effective and faster pace. More than ten credit unions have already made the switch to Mambu’s cloud banking platform with League Data, and more will follow.

As the mortgage industry continues to evolve, digital transformation will be essential for lenders looking to stay competitive

Cloud-based solutions like those offered by Mambu provide the efficiency, flexibility, and customer experience needed to thrive in this new landscape.

By embracing these technologies, lenders can reduce costs, streamline operations, and deliver the fast, transparent, and personalised service that today’s borrowers demand.

If you're ready to take your mortgage business to the next level, our experts and solutions can help you achieve your growth strategy and operational goals.

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