KBC banks on three-hour ap­provals for mort­gages

Sunday Independent (Ireland) - Business & Appointments - - FRONT PAGE -

tra­di­tional bank­ing checks. “Map­ping tech­nol­ogy is more so­phis­ti­cated than the hu­man eye.”

Just un­der 20pc of new ac­counts opened at KBC have been done via the app in the past few weeks. “That is much stronger than we would have thought even in the early cou­ple of weeks.”

The bank has 250,000 cus­tomers in to­tal, across cur­rent ac­count cus­tomers, de­posit cus­tomers and mort­gage cus­tomers. From a mar­ket share point of view, in the first half of the year, about 15pc of all new ac­count cur­rent open­ings were KBC ac­counts.”

“Vol­umes are up,” she says of ac­tiv­ity since the launch. “And in­quiries are up.”

At the mo­ment the five steps cur­rent ac­counts are lim­ited to the app but it will trans­fer to on­line bank­ing across the board. “We are de­sign­ing for mo­bile but then mak­ing those pro­cesses avail­able though ev­ery sin­gle chan­nel,” she says.

Next on the hori­zon is per­sonal loans. “We want cus­tomers to be able to get ap­proval in an hour and our ob­jec­tive is to mort­gage de­ci­sions in three hours.”

She says that while in the past get­ting a mort­gage and mov­ing house was seen as a ‘night­mare’ of a process, tech­nol­ogy was mak­ing it smoother.

“The re­al­ity is that a lot of the data that we as a bank needs ex­ists. It’s not about slim­ming down a process and tak­ing a cou­ple of steps out, it’s re­think­ing how mort­gages can be brought to the mar­ket. We are very far along in per­sonal loans and we’ll do the same with mort­gages. Our ob­jec­tive is to do it by the first half of next year.”

Tech­no­log­i­cal ad­vance­ments are an im­por­tant sell­ing point for a bank with only 15 branches or hubs, as Deer­ing calls them. But even far more im­por­tant are in­ter­est rates on mort­gages.

AIB has sparked a new wave of com­pe­ti­tion in the mort­gage mar­ket by slash­ing its vari­able rates, with oth­ers fol­low­ing. KBC has launched a com­pet­i­tively priced 10-year fixed mort­gage rate. “We’ve gone from a sit­u­a­tion where about 25pc or 30pc of new mort­gages were fix­ing to a sit­u­a­tion in the past six months where it went up to 70pc,” she says. In re­sponse to this a longer fixed rate was in­tro­duced.

The bank has been crit­i­cised by those on the older stan­dard vari­able rate (SVR) for leav­ing it un­changed.

How­ever, Deer­ing says that SVR is a legacy prod­uct and there are ways for cus­tomers on this rate to re­duce their in­ter­est rates.

“The SVR isn’t a prod­uct we of­fer any more so in­stead we de­cided that all our new busi­ness pric­ing is of­fered to our ex­ist­ing cus­tomers. So ex­ist­ing cus­tomers on that SVR can get an up-to-date val­u­a­tion and de­pend­ing on their loan-to-value ra­tio can avail of new busi­ness pric­ing.” Since this op­tion was in­tro­duced in De­cem­ber, only one in 10 el­i­gi­ble cus­tomers have availed of it.

Deer­ing ac­cepts that in spite of mar­ket­ing and in­no­va­tion, the bank­ing sec­tor still has some way to go be­fore be­ing em­braced by consumers fol­low­ing the bank­ing crash and fall­out from the re­ces­sion. “Trust in bank­ing in Ire­land was the low­est in Europe,” she says.

“Cus­tomers want to re-en­gage, whether it’s buy­ing a house to sav­ing for the fu­ture, but I wouldn’t say they have for­got­ten. I would say that trust fac­tor is still a chal­lenge,” says Deer­ing. “The les­son it has taught us is that trust is very hard to build up but it is very easy to lose.”

KBC’S Dara Deer­ing says speed­ing up the time it takes to open an ac­count is cru­cial as the bank em­braces tech­nol­ogy. Pic­ture: David Conachy

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