2023’s Most High-Voltage Technology Trends Revealed

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2023 was the year technology ripped through bridging finance like a bolt of lightning in the night “We’ve definitely seen a lot more bridging lenders”, confirms Nicola Firth, Founder and CEO of Knowledge Bank, a sourcing solution for lenders and mortgage providers.

1.     Sourcing Technology Rocketed

A burst of lenders first signed up to the platform in 2020, including Central Bridging, Roma Finance, and MT Finance. It sparked a trend. Throughout 2022, Knowledge Bank scooped up a further 16 bridging lenders. By 2023, more big names joined, including TAB.  “[It] is a brilliant opportunity for TAB to extend our reach to the brokers”, commented CEO Duncan Kreeger in a press release.

Like Mary Berry preparing an Apfel Strudel, Knowledge Bank has served layers upon layers of innovation. The platform takes lenders with them into a new universe of digital opportunities.

According to Firth, Knowledge Bank welcomes “way over 4,000 brokers on a daily basis”. Using technology to match up UK-wide brokers with lenders doesn’t just unlock new business, it improves “cost saving”, “efficiency”, and “transparency” too.

Tiba Raja, Executive Director at Market Financial Solutions (MFS) agrees. “We’ve seen dramatic improvements in sourcing systems in the bridging world in recent months, with a notable example including the technology put in place by Knowledge Bank”, she comments.

2.     Automation and Artificial Intelligence Ramps-Up

But sourcing is just the beginning. MFS have also added One Mortgage System (OMS) to their stack. “Its technology allows us to progress and track cases more easily”, explains Raja. The program has long fingers, reaching into the Customer Relationship Management hub and automatically updating users with notifications. It organises data and avoids the age-old headache of double work.

“This allows for the business to take advantage of automated and one click checks and document gathering”, Raja highlights. “As well as keeping our brokers up to date with the progress of the case, so they are never left in the dark”.

3.    Huge Strides in Data Optimisation

Being left in the dark may soon is becoming a burning concern for lenders. Bridging finance has traditionally relied on private deals, usually face-to-face behind closed doors. Today, lenders must keep that same personalised touch, but with mortgage-beating speed and unparallelled convenience. “That’s one of the biggest things that technology can help with”, reveals industry expert Maria Harris.

As well as being a seriously big name in PropTech, Harris advises the likes of United Trust Banks and Fundkeet. Over 2023, she noticed bridging lenders making “much better use of data”. According to her, this unlocks the potential for “open finance, digital identity, open property data” and more.

4.     Artificial Intelligence is a No-Brainer

Hand-in-hand with automation and data optimisation comes Artificial Intelligence (AI). It took centre-stage in 2023 with the likes of ChatGPT. But some think AI is just getting warmed-up. “We expect it to play a more prominent role in 2024!”, highlights Mark Gillis, Technology Director at TAB.

He’s excited about the business potential. “AI can help with streamlining processes, as well as reducing the everyday tasks”.

Many lenders were left battered, bruised and gasping for air by 2023’s market conditions, as they tried to swerve punch after punch of rate rises, dodgy policies and volatile demand. For Firth, AI can help firms with tight resources make a comeback in 2024. Darlington Building Society has even appointed a Digital Development Manager to plug the gaps.

5.     Big Tech Creeps onto Bridging Lenders’ Turfs

While the industry whipped-up a technological storm in 2023, Harris cautions that outside competition is about to reach boiling point. Big tech is hot on the heels of lenders. “Apple, Facebook, WhatsApp… they are all offering financial products today”, Harris warns.

Gillis also cited Big Tech Lenders as one of the major developments of 2024. Are they circling traditional bridging territory like vultures? And what can lenders do to keep them at bay?

6.     Machine Learning Will Be Fundamental for 2024

To avoid getting swallowed up by competition, lenders cannot afford to maintain the pace of change 2024, they must accelerate. “There’s a whole bunch of stuff we could be learning from other industries”, Harris advocates. “The rest of the world has already moved onto machine learning”.

Machine learning is the robotic alter-ego of AI. Instead of replicating what a human can do (like talking or writing), it performs robotic or superhuman tasks like running thousands of calculations in picoseconds. Machine learning will soon become the vital lifeblood of competitive underwriting. This is where, according to Harris, other specialist lenders are racing ahead.

“It’s almost to the point of applicants knowing that [their loan] is going to be successful and who will do the lending, before they even submit”, she explains. Firth “absolutely” agrees. “You’ve got to start using and embracing the technology”, she urges lenders.

7.     Standardisation is Key to Unlocking Progress

To get to a happy place of machine learning, one fundamental piece of the puzzle is missing. “There’s no standardisation”, Harris grimaces. “Every bridging lender has their own application process and publishes their own criteria in their own way”.

While there is no universal standard currently, the floods of lenders seeping into platforms like Knowledge Bank and OMS may lead to a de-facto version. If all the bridging players input and receive data the same way, this might create a sort of unity.

Could the combined efforts of lenders outpace and overpower threats from big tech? Only time will tell.

8.     The Seeds of GreenTech Sprout Roots

In the meantime, forward-thinking lenders are striding through technological innovations like a champion Nordic walker hurrying home for lunch. TAB, for example, made it into the finalist stage of the glittering 2023 PropTech awards. “We were shortlisted for the scaling at pace award”, beams Gillis.

Gills has a bullet-proof ambition to use PropTech to drive “positive environmental change”. In the midst of COP28, and with so much pressure to reduce carbon emissions, this is surely a sensible way forward. It could even help to shield the lender against aggressive competition from other players.

As we look forward to the new year, sustainable PropTech will explode into the mainstream. Lenders already up to date with the mainstream technology are best positioned to can grasp the newest innovations of tomorrow.

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