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Fail To Prepare, Prepare To Fail

Tuesday 12 July, 2022

A unique moment in time demands the right technical transformation from lenders.

Building Society leaders are feeling emboldened by recent results and confident of making changes within the organisation to remain relevant to consumers and fend off the inevitable competition from specialist lenders with more modern digital technologies.

The time to act is now. Building societies are in a unique place in time and need a unique response. But that response is not and should not be ‘a one size fits all’ solution. What is clear is that every lender has nuances that are integral to the way in which they can address the issues they face. Lenders must understand which problems they are trying to solve and then the order in which they must address them before leaping into the technological solution.

The pandemic may have left many societies with bolstered reserves and a renewed vigour for their social purpose and commercial missions. But our new market of rising rates and stretched borrowers is changing what lenders will need from their operational systems and processes. Lenders need fresh thinking and bespoke strategies to deliver new product propositions and customer experiences quickly if they are to meet the rising risk challenges head on. The right strategy will dictate the right solutions – not the other way round.

Borrowers’ circumstances are more complex than ever and as they feel the cost-of-living squeeze, so the mortgage propositions on offer should evolve to deal with those conditions. Whether that be through developments as diverse as delivering longer-term fixed rates or the understanding of borrower expenditure through open banking, the need to deliver quickly operationally, often at scale, but also securely is crucial.
The number of technical solutions, of course, can appear overwhelming. There is no silver bullet either so when you plan your technology investment, be aware that the race to solve these systems and operational issues has left lenders in the past repenting at their leisure. The road to navigating market change is littered with lenders who have jumped to solutions before they have really understood the problem they are trying to solve. Understand how your business strategy defines your operational policies and procedures. Then you can consider your technology needs.
Investing in the right Target Operating Model and selecting the technology partners that enable you to be agile in future isn’t a cost when doing nothing is no longer sustainable. That change can be daunting, but you are not alone. It is possible to learn from the people who are doing it already.
Coeus has wide ranging experience in shaping operational models and aligning IT strategies from across the financial services and utilities industries, understanding the impact upon operational effectiveness, conducting vendor selection programmes, and carefully constructing supplier contracts. Now, in partnership with Tim Hague at Sagis Consulting, which brings specific mortgage and savings expertise, we are ideally placed to bring a new independent, fresh, and unique 360-degree advisory package to the sector.

This unique moment is not an opportunity to merely lift and shift existing legacy technology and legacy process issues onto another platform. If you truly understand what your business needs in terms of operational excellence there is a fighting chance you will make the kind of targeted change you really need that will enable your business to pivot quickly and effectively.

If you are planning to rationalise and evolve your business in response to these changing market pressures but you’re unsure where to start, then get in touch.

Blog by Robert Walker, Director, Coeus Consulting

This article appeared in Mortgage Finance Gazette in June 2022.

View more about Coeus’ work with Financial Services companies here