Page 56 - Future Demands Jan 2021

But, it’s more than just a memory exercise. I look back and can see that I was subconsciously reviewing these averages against different variables, and making decisions accordingly. From knowing I’d be statistically likely to give away more runs if I bowled short in certain weather conditions, but more likely to take wickets, through to knowing I was more than half as likely to get a left handed batsman out as a right handed, I was running probability outcomes in my head, without realising.
Then, when I came up against a new scenario, I would deliberately try different tactics to see which – if any – was most effective, thus inadvertently introducing myself to the concept of A/B testing!
All of which brings me out of my nostalgic haze to where we are at as a mortgage industry today, and what our shared future might look like.
For the last decade, Aldermore has been helping people overlooked by the big banks, and finding ways to say yes to landlords, First Time Buyers, and those self-employed.
In that time, the mortgage market has seen unprecedented change with the rise of digital capabilities. Data, insight and analytics now play a huge role in helping us to understand not only who we can help, but also how we can help them.
We now have access to a wealth of information too numerous to mention, including the macro-economic environment, how our competitors are performing, and how brokers are
working with our products, alongside a raft of internal data, such as operational, risk and customer insights.
Consequently, there’s a danger you can become data-blind, and too reactive to short-term metrics. Handling large quantities of data is challenging enough, but the value comes in understanding what’s happening beyond the numbers. What are the key drivers behind the data? What does this mean for our customers? Our brokers?
Thankfully, advances in data science, artificial intelligence and machine learning are transforming our ability to consume and interpret data, translate it into insight, and crucially turn this into meaningful actions that can be deployed, tested and measured across the business.
Essentially, it’s like giving my teenage self the cricketing playbook on almost every scenario I may have faced, leaving me to worry only about executing the plan. That’s why we’re investing so much in our insight teams, along with the infrastructure required to manage the large number of data sources.
We now have the ability to combine and analyse multiple data sources and gain richer insights into the needs of our customers and brokers. Every day we see opportunities for data analytics to enhance decision making across the end-to-end product and customer lifecycle; helping us to optimise our product ranges, manage operational capacity, and support our sales teams.
However, that’s not to say the future is being taken over by robots! People are essential.
Historically our industry relied on experienced people to future scan visible market trends, to make best- guess assumptions about why demand had picked up or dropped off, and what the future held. The experience these people possess is still very valuable, but now almost all of the guesswork can be removed – leaving our analysts to apply their insight (and, yes wisdom!) to real- time accurate facts. This provides us with a greater degree of confidence when reviewing the relevance of our products and pricing that our changes will have the desired impact.
However, it’s a journey, and one that’s in its infancy, and whilst the potential benefits are significant, becoming a data-led business is not without its challenges.
Aside from the significant set-up and ongoing costs, many organisations find embedding a new way of working difficult to integrate into their company culture. There are established operating models, processes and people habits that can be very challenging to bring on-board.
And I think it’s that final thought that offers the pathway to firms not only surviving the data-led revolution, but thriving within it. Simply gathering the right data is only part of the battle, and the winners in our industry will be those inspiring enough to bring their teams along for the journey, and agile enough to act on the insights just as quickly as the data is processed.
FUTURE DEMANDS
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