First of all, tell us a little bit about yourself and your role at Ohpen?
I’ve been at Ohpen for the past three years as UK Managing Director, setting up our great team in the UK and driving Ohpen’s mission to make financial services fit for the future. We’re a Software as a Service (SaaS) core banking platform supporting financial institutions that want to serve customers better. Ohpen was the first fintech platform to bring a bank to the cloud. In the UK, we have focused on transforming and digitalising the mortgage technology market which has been dominated by large legacy platforms. We have already announced clients in the building society, specialist lender and greenfield/start up spaces and expect to be able to announce more new clients in the next couple of months.
For the last 30 years I have focused on digital transformation. Firstly, at NatWest/RBS in the early days of ‘e-commerce’, and then driving digital adoption through the simpler financial products at IE Digital and moving into the larger challenge of mortgages at Sopra Banking Software. At Ohpen, my key area of focus is how you harness the simplification and automation that technology can provide with the desire to give the expert (broker/underwriter etc) the tools to do their job most effectively. It is a very different form of digitalisation.
What do you believe are some of the fundamental challenges holding back the mortgage lending market? What is Ohpen’s role in helping solve these problems?
The mortgage lending market is facing multiple challenges from economic volatility, changes in regulation and government policy (with a new government focussing on the housing market) through to increased competition as new players enter the market and pressure on volumes increase.
All these challenges require a different operating model for lenders. It is about creating an agile and responsive organisation that quickly reacts as opportunities present themselves or challenges materialise. Technology has a key part to play here, and it is clear that legacy technology has stifled mortgage lender’s ability to meet their strategies. The industry has been crying out for a less complex and more streamlined end-to -end processes for a long time, to ease and speed up the challenging journeys that we ask customers and brokers to go through.
Our proposition at Ohpen is to not only provide the best user experience for clients, employees and brokers by taking in data across the full journey (and working with partners who will expose their APIs) and digitalising and validating in real time but also by providing lenders with the all the tools required for them to rapidly make changes to products and processes so they can gain competitive advantage. The business case works from both a cost perspective (freeing up underwriters and operational staff to focus on added value activity) and from a revenue perspective, taking advantage of new opportunities.
Ohpen was founded in the Dutch market. What were some of the differences – or similarities – you came across as you entered the UK market and as you look internationally at new opportunities in different mortgage markets?
The needs of the Dutch and UK markets are remarkably similar from a technology perspective. Both markets are heavily focussed on the broker channel and the complexity of the types of products the specialist lenders offer are very similar.
The key differences are that the Dutch market is very much focused on the longer-term products, as demonstrated by our client April Mortgages when they launched into the UK, and that the Dutch have built their technology to integrate with a central hub. All lenders and brokers are connected through HDN (Hypotheken Data Network) so an API first strategy is essential. In the UK we are still so dependent on individual broker portals.
As we work with partners to target new markets we see the ‘international hub’ we have built in our product means that the job of ‘localising’ our platform is broadly around connecting to the local ecosystem and ensure regulatory compliance. The complexity of the Dutch and UK markets means that whilst there are significant differences in products across Europe, the markets where brokers are key have strong areas of similarity.
What are some of the common conversations you’ve been having with customers and partners in 2024?
Lenders are going through the internal battle of finally making decisions to move off platforms which are 30 years plus old.
For many years the balance of risk has been in favour of staying and putting up with less and less flexibility and mounting costs. I think the big change came during the Covid lockdown with lenders realising that they require much more flexibility moving forward and that putting a front end across a legacy platform really doesn’t meet the needs. There have never been more lenders who are or will make the change in the short term.
So, a lot of ongoing conversations concern questions of ‘how’ rather than ‘what’. If lenders are replacing their platform, they require a clear strategy to ensure that the business objectives and the IT strategy are aligned, and there needs to be clarity around the organisation on the digitalisation they will be going through. Often the greatest challenge is the internal battle with people who have used the legacy platform for most of their career and just want a more modern version of the same process.
As we dive into automation and AI, we talk about how the process can be improved for underwriters and brokers and whether the lender is willing to jump straight there or wants to adopt a more staged approach. Real-time document validation is a key example. Lenders/brokers have been taking in physical documents for so long, that some will decide to put an underwriter check in before allowing validated documents to flow straight through.
Our partner discussions are often about how, together, we can take the fear out of this change and support lenders in their overall digital migration.
Having the right team available from a lender perspective is key to any successful implementation, and where that can’t be fulfilled entirely from within, it’s key that the lender works with a partner with real experience that can support the level of change required.
