The Financial Conduct Authority has stated that changes in technology could lead to lenders becoming less dependent on traditional mortgage brokers.
The prediction was set out in its corporate document, ‘sector views’, which provides an overall view, from the regulator, of how each sector is performing.
Highlighted in the ‘retail lending’ section of the document, a sector which the FCA highlights as particularly exposed to changes in the external environment. In turn, this has an impact on consumer demand as well as the methods firm use to engage with their clients.
Products were outlined as one particular area of interest, with the FCA setting out their expectation for growth in the range of products as the needs and requirements of consumers continue to evolve.
They also move on to discuss PSD2 and Open Banking, and the anticipated impact which they will have on the drive for transformation in a digital sense. In turn, the regulator predicts that as well as new firms entering the market to drive competition, it also expects that ‘technological developments to lead to mortgage firms reducing their reliance on traditional mortgage brokers.’
A spokeswoman from the FCA has confirmed to MoneyMarketing that “mortgage firms”, in this case, means mortgage lenders.
Further, the FCA went on to state: “We expect more firms to respond to changes in the socio-economic environment by developing products in the short to medium term for consumers on zero-hour contracts, older borrowers, and the very-recently self-employed within the framework of our existing affordability requirements.”
The document can be accessed here.