Over half of millennials open to buying mortgages through challenger
26th October 2016
51% of millennials would consider taking out a mortgage with a challenger bank 2
London, 26 October 2016 – Over half (51%) of millennials1 would consider taking out a mortgage with one of the new challenger banks, according to new research2 conducted by EDM Mortgage Support Services’ (MSS).
Only 8% said they would not consider dealing with challenger banks, which have no high street branches and only deal online. The remainder of respondents is undecided.
More than two in five (41%) millennials say they would be willing to use an app to buy a mortgage if one were to exist, although nearly a third (31%) say they would definitely be unwilling to do so. Three in five (61%) of all millennials say it would be desirable if their mortgage lender were to provide an app.
One in four (25%) of millennials say they would be ‘happy’ or ‘very happy’ to take out a mortgage online using a so-called robo-advice service and/or deal with an automated adviser that is based on artificial intelligence. Over one in three (36%) say they would be unhappy to do so and 39% were neutral or did not know.
Of those millennials willing to use an app, 59% say their reasons for doing so would include the higher speeds available. Other reasons cited include: being used to using apps (50%); the ability to arrange a mortgage at any time (41%), getting a better deal (37%), greater accuracy (15%) and the reduced risk of fraud (5%).
Three in four (75%) of those who would be unwilling to use an app say they think something as important as a mortgage should be explained face to face and 21% cite the risk of fraud.
Joe Pepper, Managing Director, EDM MSS, commented: “Millennials are the most tech-savvy generation ever. While our research shows many of them still prefer to negotiate something as important as a mortgage face to face, the fact remains that technology is an inherent part of their lives. The digital approach of the challenger banks will increasingly appeal to them going forward and traditional lenders will have to become more digital themselves if they are to compete with the challenger banks in the longer term.”
EDM Mortgage Support Services believes strongly in mobile technology and has recently partnered with Stroma to deliver a mobile application as part of EDM’s VEX platform. VEX enables lenders to distribute work to, and receive work from, qualified surveyors. Surveyors can also use it to capture information at a property and upload it straight into VEX for communication to lenders.
1 Note: millennials defined as UK adults aged between 18 and 35 years
2 Source: Consumer Intelligence. Research carried out among 515 UK millennials, 23 August to 8 September 2016
NOTES TO EDITORS
About EDM Group: Headquartered in London, EDM Group employs over 1,400 people across the UK and US. For the financial year 2014/2015, the firm reported an annual turnover of £70 million. In September 2015, EDM Group was ranked 43rd in the annual Sunday Times Hiscox Tech Track 100 league table, up from 57th in 2014 – a reflection of the fast-growth success of the firm and its position as a leading, global information management and digital transformation specialist. In June 2016 EDM Group was ranked number 1 in the annual Sunday Times HSBC International Track 200.
EDM Group combines best-practice consulting and technical experience to develop bespoke outsourced solutions for a range of clients across the private and public sectors. The success of the firm has been built on its powerful Digital Mailroom document scanning and storage capability, which continues to be a core, in-demand product offering. EDM Group’s growing client base spans sectors including financial services, automotive, professional services, private healthcare, and the public sector (central and local government, and NHS). Specific clients include HMRC, Legal & General, Bupa, Avis Budget EMEA Ltd, Nationwide Building Society, Barclays, Santander, Companies House, Lloyds Banking Group, Grant Thornton and healthcare providers including NHS Trusts and BMI hospitals.
EDM Group is accredited to ISO standards for Information Management Systems (ISO27001), Environmental Management (ISO14001) and Quality Management (ISO9001).
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