Technology Review

Weddings, divorces and being cheerful

David Bennett

commercial director, eKeeper

It would be safe to say that Zoom, Teams, WebEx, etc. are no longer the preserve of the technosavvy nor the office linguist who craves more jargon to justify their employment.

Now children, parents and grandparents are meeting virtually for pub quizzes, catch-ups and in some quarters to marry, albeit without the consummation.

Broader online interaction has quite literally evolved in just two months, what would normally take two to three years, not out of choice but out of necessity. Take the bell curve of product adoption; rather than being the title of a prog-rock album, instead it has consistently tracked the innovation adoption lifecycle of “new technology” from the initial innovators to early adopters through to those pesky laggards.

Think of a technical product in the past ten years like a tablet or mobile phone and then think about your friends, family and co-workers, to work out who is where on the curve.

The initial innovator would be that friend who has to buy the latest piece of kit, typically a risk taker who simply has too much disposable income.

The early adopters, are a bit more informed but tend to push their newfound piece of shiny onto us, regardless of whether we’re interested or not, the “look, I can Bluetooth into my water filter” type.

Finally, the laggards, those who are resistant to change and revel in the traditional, often at the expense of being left behind; think of the hours a grandparent takes signing up for Facebook. Most of us fall into either the ‘early’ or ‘late majority’.

But through COVID-19, we’re not talking about some luxury gizmo to fascinate the credulous, what we’ve seen is a mass acceleration of adoption of remote technologies, not only in the intermediary world but those of the general population – because we have to. This is likely to permanently alter the way we will work going forwards, even given the return to some resemblance of normal.

It is likely to alter not only how accepting mortgage customers are to interact with remoting technology, but also change their expectations that remote technology should be available as a normal part of business.

Now at this point, the seasoned technologist would refill their pipe and regale the listener about how such and such product will achieve this. Instead, let’s look towards the potential reality of the COVID-19 world, prior to any vaccine.

REASONS TO BE CHEERFUL

It’s hard not to be positive about a post COVID-19 world. With research and statistics, announcing that there’s £82 billion of property “in the hopper” (Zoopla) and 75% of homeowners are still wanting to move (reallymoving) after lockdown, I look towards the more simple and realistic fact that financial services continues to be driven by an individual’s personal circumstances.

Just as Zoom is facilitating weddings, other natural factors come into play

M I

– for example, a potential boom of children in Q1 2021 – and my personal favourite from Wuhan, the epicentre of the outbreak, when their lockdown was lifted the administration office receiving divorce filings had to close due to the record numbers of submissions, something that has been consistent with cities lifting lockdown across China.

With record-low interest rates and encouraging signals that the mortgage market will not only exist but is likely to aid in the returning to some normality, what will be the challenges? Is it that video conferencing will permanently replacing face-to-face meetings? Is it non-interactive due diligence such as AML and Credit Reports speeding up the process and qualifying the customer? How about direct-to-lender submissions via API connectivity? Or is it building or reinforcing your online presence and using more effective qualification and acquisition at the lead stage? It is actually likely to be all of these.

In an industry not known for speedily embracing technology, intermediary software has previously been positioned, not as a fundamental part of the business, but on its merits as a convenience to: the client, the adviser, the administrator or the business principal. Now that has changed and technology is the necessity for the continuation of business, remote or otherwise. It starts from the backoffice, by structuring your sales, fulfilment and post-sales processes, but it also starts with the security of your biggest asset – your client bank.

Once you’ve got that, the rest will fall into place. Convenience features such as client portals, electronic signatures, ID verification and the like will start to flow to deliver that digital / remote journey that your customers will expect in today’s new reality.

But if you have built your business on poor foundations, when the market accelerates (or returns to something like before) the world will have irrevocably changed. If your approach to technology is the same as before or worse, embracing the laggard, you may well find that the world has moved on and left you behind.

Discard manual AML checks

John Dobson

chief executive, SmartSearch

The advent of social distancing has highlighted the shortcomings of many outdated business processes. With lockdown restrictions in place, it simply hasn’t been feasible to conduct business face-to-face, and the physical exchange of documents has also been all but impossible.

The Financial Conduct Authority (FCA) has – unwisely in my view – let it be known that it will temporarily allow firms to use various workarounds for their know your customer (KYC) and anti-money laundering (AML) due diligence. It’s clear, however, that scanned PDF documents and ‘selfie’ photos and videos are not sustainable.

It is hard to imagine that this approach will be allowed to continue, as it simply makes life too easy for money launderers.

BACK-UP PLAN

Firms that are currently relying on the hotchpotch of measures set out by the FCA need to think about a back-up plan for when these workarounds are no longer deemed acceptable. Otherwise, they could find themselves unable to take on new business.

There is now some suggestion that restrictions may be eased, and it is tempting to think that firms might be able to go back to physical document checks. This would be a mistake for several reasons.

First, it is clear that any easing of restrictions will be partial and phased. Even if some retail and catering facilities are permitted to reopen soon, it is unlikely that office workers will be part of this initial phase, so the problems associated with manual document checks will remain.

We also have no way of knowing if and when we will all need to go back into lockdown. In the absence of an effective (and widely available) vaccine, we could face several ‘waves’ of these restrictions.

Even if a vaccine is developed quickly, there is no guarantee that another pandemic – a mutation of COVID-19 or something totally different – will not materialise.

From now on, business continuity plans will need to reflect the possibility of another major public health emergency, a risk that arguably overshadows even that of a terrorist attack. This will include making provisions for staff working remotely.

But the most important reason it would be a mistake to cling to manual document checks is that they are simply unnecessary. Fully digital solutions are available that

can completely remove the need for physical documents to change hands, while allowing firms to remain 100% in compliance with regulations, regardless of where their staff work.

M I WAKE-UP CALL

Electronic verification is not only more convenient, it is also more costeffective, especially when you consider that a full check can be performed in a matter of seconds. It is also much more secure, eliminating the possibility of fake or falsified documents being used. It shouldn’t take the threat of a global pandemic to force businesses to discard outdated practices, but if they are still clinging to manual ID checks, this should at least serve as a very loud wake-up call.