First of all, a huge congratulations must go to the lenders and CRMs who have dived in to solve this problem. Building APIs is incredibly complicated, and this is a complex industry. Nobody wants to be the first mover, simply because the risk/reward ratio is so high. For the lenders who have taken this step, pat yourself on the back, because you've shown what needs to happen for meaningful adoption to take place.
I'll save you reading the whole post and jump straight to the punchline:
API adoption has been suprisingly low for one key reason. Building an API is only half the problem.
What does that mean? Let's take a step back.
The concept of a mortgage has changed massively over the last 20 years: joint borrower sole proprietors, RIOs, SPVs, multi-credit-commitment debt consolidation, 3-4 Applicants, Shared Ownership, new gradual ownership schemes etc The list goes on.... In short, the more niche scenarios are becoming more common. Throw in GDPR, PECR, deploying legitimate interest campaigns (correctly), and this becomes a complex melting pot. Most CRMs were built 10–20 years ago, built to handle large industry clients, so they're full of technical debt. An API on its own isn't going to deliver results.
Why? Speaking from experience, the biggest problem we've found is that every firm seems to do something different, whether it's not keying credit commitments where there's a balance of £1 or less, how they calculate the net monthly income on a lender's affordability calculator, or passing key details in the notes section for an underwriter to review. It's even more striking to compare how experienced administrators key cases compared with new mortgage brokers. We've had to completely re-architect the way we do things so that every firm can have its own rules.
To do this at enterprise level for APIs is even more complicated because, let's be frank, brokers don't want APIs. They want the results that come with them. They want a way to submit a case as quickly as possible and trust that it will be submitted in exactly the same way they've submitted cases for 20 years. Right now, that doesn't exist, yet industry press releases continually tell them it does.
That's the real problem: how do you build that trust? How do you take a broker who has used Lender A's portal for 10 years, who knows they can key a DIP/FMA in 20 minutes and get the result they want because they've done it a thousand times before? How do you take a broker who has seen announcement after announcement from tech providers about API integrations with lenders, only to find the experience falls short of what was announced (often 12 months early to bank sales, but that's a different problem altogether)? The brokers we speak to who have tried APIs in some capacity all say the same thing: sometimes it works, sometimes it doesn't. At Instamo we've learnt the hard way, the first experience matters the most.
How do you build that trust?
You can't do this overnight; it's going to take time. I look at the lenders who have built APIs and integrated with CRMs as asked, and I feel they've been let down to a degree. For a lender to undertake a project like this has relatively little benefit to them, especially if they're a Top 6 lender and Consumer Duty means an advisor will, more often than not, have to place the case there regardless of an API. I firmly believe lenders need support from a trusted framework, so that Broker A knows that if he fills in a portal in an xyz format, he will get the DIP/FMA result he expects. To date, that framework doesn't exist. Until that trust exists, I don't believe we're going to see meaningful adoption.
Maybe I'm wrong? I'd love to hear your comments.