Text Message Mortgaging

Conveyancing advice

10.10.2007

Text messages are becoming an increasingly popular way for mortgage providers to keep in touch with their customers.

Scottish Widows has become the latest financial institution to offer the service to its mortgage-holders and the move is aimed at providing an improved channel of communication between the mortgagee and the company. It is hoped that such facilities will also engender a greater trust in the mortgage sector, with customers feeling that they are being kept fully informed with up-to-the-minute information from their mortgage provider.

The new service is akin to ones that have already been implemented by other financial institutions. It sends information directly to the customer at key stages of their application process and the bank hopes that in the future this approach will be used to provide greater details throughout the course of the mortgage arrangement. In June this year, Lloyds TSB announced the creation of a text service to provide customers with updates on their mortgage application.

Among the messages to be sent these services at present are notifications of valuation being instructed and being received, as well as the offer letter being sent. This approach is designed to alleviate the stress of customers when applying for a mortgage as well as giving them immediate access to information on each stage of their application.

This was followed in August by HSBC, whose text messaging service has gone down a slightly different route and is focussed on providing information on bank statements and other areas of current accounts to clients.

A number of mortgage brokers have also invested in technology that enables them to send text messages to their customers and the innovation has helped to boost sales for a number of organisations, according to text messaging system, Text Connect.

The text messaging service has become the latest must-have option for many in the mortgage industry because of the immediacy with which consumers can be contacted. In many ways, the mobile phone sector has become the newest frontier, taking over from the internet as the quickest way to provide information to consumers.

While the industry may need to be careful that it does not go too far and begin overloading consumers and bombarding them with information, text messaging is clearly an important tool in building trust between the sector and consumers. The importance of building this trust is perhaps now more important than ever, given that the credit crunch has resulted in increased scepticism in the public domain over lending practices.

Amanda Docherty, communications manager at Scottish Widows Bank, explained that the company would be looking to expand the text service "into other areas" if this current pilot proves popular. HSBC might offer the bank one example of how to expand the text service, if its current account focus proves popular. With so many pilots underway from some of the country's leading lenders, it seems that the text revolution is set to continue to have a major impact on the property market over the years ahead.