Head to Head: United Trust Bank vs OpenMoney

A long time ago (in mortgage terms) in a galaxy far, far away…..

It is a period of civil war. Rebel online estate agents, striking from a hidden base (called the internet) have won their first victory against the evil traditional estate agent.

I could go on, but now, unlike Star Wars, we’ve no idea how this battle is going to end but what we do know, is that the face of estate agency in this country has changed forever.

Why did it take an online estate agency start-up to shake up a well established industry and change the perception of selling a residential property forever? In my view, it comes down to complacency and taking the customer for granted, plus not articulating to the wider general public the value of a great estate agent.

I worry that just as the reputation of a great many estate agents has been besmirched and ‘down-valued’ (excuse the pun), then we should look at ourselves and question whether the value of advice when taking a mortgage is also under threat. The rise of Product Transfers and the potential allowance by the FCA of Execution Only seems to indicate that neither lenders or the FCA value it and so what about customers?

With a shrinking UK mortgage market, those of us in the intermediary sector should be looking at how we can ensure the value of advice is understood by consumers before it’s too late. Is this the role of trade bodies like AMI or IMLA or should media partners who straddle both direct and broker channels do more to champion the cause? Alternatively, should brokers take a responsibility and what about those who spend thousands on TV, Radio and print advertising, as their models are still very much based around advice?

It’s probably a combination of all the above, but we should all do our bit before we have to save our people and restore freedom to our mortgage galaxy.

This takes me on to this month’s Head to Head, as I am pleased to say that both firms highlighted are clear about the value they place on brokers and advice in their respective stories.

First up are OpenMoney, who state on their website that they believe in ‘Financial Advice for all’ and have been founded by Duncan Cameron, who was co-founder of Moneysupermarket (and for those of you old enough Mortgage 2000, a mortgage sourcing tool that closed in 2009).

It’s encouraging that despite the success of Moneysupermarket and its aggregator model, this proposition is very much predicated in providing advice and they are launching into mortgages in early 2020. They’ve also hired an experienced Head of Mortgages, who has worked for two major lenders as an adviser, so knows what it takes to be one and the experience is recent. This can only help the development of their advice model.

I’m always a little sceptical when the word unique is used and so my scores on Innovation and Game Changer factor are relatively low, as until we see what they develop, it’s impossible to assess. However, the Newsworthiness is high due to what the business has achieved so far in the world outside of mortgages, plus the fact that Mr Cameron is involved and is getting back into mortgages is very interesting in itself.

In terms of Customer Benefit, again it’s difficult to assess until we see their plans, but from what they’ve done so far, it seems encouraging and the news definitely supports brokers, as they are so clear on the value of advice. It will be very interesting to see how their mortgage proposition develops, I wish them well and am looking forward to their eventual launch.

Facing OpenMoney are United Trust Bank, who have announced their launch of an electronic ‘facial recognition’ ID verification service through a smartphone app that is aimed at saving its mortgage introducers and customers time and money.

I’ve watched the United Trust Bank journey with interest in recent years and it’s obvious that they have a real appetite to improve all aspects of a sometimes frustrating process whether that’s in the 1st charge mortgage world or in more specialist finance sectors. I’ve also noticed that they are taking an active interest in technology and the various solutions offered both in mortgages and in other sectors that could apply to their model.

For Innovation and Game Changer scores, I’ve marked them very highly as I appreciate that such technology is widely used in other areas of banking, but use in the specialist mortgage sector is more scarce.

Undoubtedly, the Customer Benefit is significant and all through the release, Buster Tolfree makes it clear that this solution has been built to benefit brokers too. It’s also very Newsworthy and I look forward to seeing what will be coming next from this relatively new challenger.

The clear winner this week then is United Trust Bank, but in Q1 next year we may schedule a rematch.