Next-gen core platform for debt relief and administration

By Banking, Clientcases

What they wanted
With increasing challenges of people struggling with debt, our client asked us to build a next-gen core platform to handle their operations and client interaction. This market-leading company experienced the need to maintain their competitive edge and reducing the costs to assist and help people in debt even better. With a capricious IT transformation past for the last 20 years, fast and high-end delivery was essential. Their financial and client administration process was highly manual and especially the postal and client interaction required a lot of back-and-forth, precious time and lots of information.

What we did
With all the requested requirements already documented, we started with a sizing in OutSystems. With this sizing we made a precise estimation of the work needed to be delivered. After a highly successful proof of concept containing the most important operational functions, we started building towards a first production deployment. Based on a Microsoft Azure cloud we integrated many third-party solutions to innovate and accelerate. By integrating with a new specialised DMS and a new innovative payment and bank accounts provider these processes were improved significantly. Delivery and innovation were the main driver for success as well as, harvesting value and lessons learned, preparing, and realizing the full IT with premium services, process, and organizational change.

What we achieved
Within a few months we build a supreme proof of concept, directly developed further towards a first production release for a small team. Growing in functionality the core platform was deployed step by step in the whole organisation. As IG&H we doubled the given organisational goals. The new core platform not only accelerates the processes and reduces costs; it also provides whole new capabilities. The focus of debt relief and administration changed towards a more people-oriented approach. Administration was the main workload, with the new core platform and innovations that changed, giving the employees more space to dive into the root causes of client and their debt struggle.

What they said
“The highest code quality combined with fast delivery we ever encountered in comparable large projects”

Award winning data driven mortgages

By Banking, Clientcases

What they wanted
To apply for a mortgage, you need to hand over dozens of documents. From salary slip till debt proof and a copy of your passport. The processing of all these documents takes a great deal of time and is more susceptible to fraud and error. This can be done smarter and better with data. To accelerate the handling time and decrease the number of errors, a leading mortgage lender asked us to make several processes fully data driven. In this way the lender became ready for the future.

What we did
We helped our client to implement data driven solutions to automate their mortgage process. Based on our extensive experience of delivering full straight through processing solutions, we helped our client to select the appropriate partners to process the relevant client-data. In short this came down to three main parts. The first part was the selection and integration of a tool (i.e. iWize and Ockto) to make direct data delivery by clients possible. The second part is related tot the selection of the right service provider which could directly process data into the back-office based on HDN-standards. The third part is about using government registers as a source of client data to increase the data quality and thereby complying with ever increasing due diligence regulations.

What we achieved
By taking a step by step approach, digitizing each process at a time, we were able to feed the agile sprints cycles in a controllable way so that the project was finished in time. Next to successfully transforming documents to data, we also helped our client coping with he impact of this change on risk management and compliance. Since most mortgages are applied for with the help of an intermediary, we successfully integrated the solution into an advisory package (in dutch: adviespakket). Now clients only have to use DigiD to log into the app and deliver the required data. After the data is checked, it is sent directly to the mortgage lender. The mortgage provider is now automating more and more processes and is becoming more and more data driven. In 2020 our client received an award for this innovation.

What they said
“A party that really has a lot of knowledge of the sector and knows what the most exciting developments are”. – CEO of a top-10 mortgage provider.

Defining the digital transformation blueprint for a Dutch insurer

By Banking, Clientcases

What they wanted
Our client created a growth strategy for the next 5 years, which exposed that the company needed to make a giant (digital) transformation to implement this strategy. To enable the organisation and IT to realise this strategy a decent design for the business model, operating model and IT were required.

What we did
As no time could be lost, an interconnected programme with three workstreams was created. Each workstream was jointly lead by an IG&H expert and one workstream owner by the client to ensure transmission of knowledge, buy-in, and fun. Deliverables were carefully aligned to create a plan with logic that carefully built upon all components.

What we achieved
In five months’ time a blueprint for the entire insurance operation was detailed. Market insights that were previously not available to the client were used, templates that enabled them to structure all blueprints are still used after IG&H has left and most importantly the workstream owners of the client could execute the plans that were created. The total transformation will take over 2 years time, but will result in significant improvement in customer service while decreasing costs by 10%.

What they said
“We are very satisfied. Excellent consistency across the workstreams, all deadlines were met and all stakeholders agreed.”

Mortgage Update | Insights from Q2 2020 | Highest number of mortgages since 2008

By Banking, Mortgage Update, News

Mortgage revenue grows to new record of €38 billion, despite COVID-19 pandemic

Download the IG&H Mortgage Update (in dutch) 

Utrecht, August 6 2020 – Mortgage revenue during the second quarter of 2020 grows by 30% compared to the second quarter in 2019. The number of mortgages grows by 26% to 114 thousand. This is the highest number of mortgages since 2008. The numbers rose among all groups, but people taking out refinancing and additional loans showed the strongest growth. Their numbers rose by 64% compared to the second quarter in 2019. For the first time, the number of mortgages for people refinancing and taking out additional loans exceeds the number of mortgages for new homeowners and transferors.

“The COVID-19 pandemic is yet to negatively affected the Dutch mortgage market. We still see an increase in the number of mortgages for new homeowners and existing homeowners who transfer to a new home. The large increase in the number of mortgages for people refinancing and taking out additional loans shows that the pandemic even seems to have a temporary positive effect on the market” according to Joppe Smit of management consulting firm IG&H.

The average mortgage value continues to grow for new homeowners and transferors (+0,9%). For people taking out refinancing and additional loans, the average mortgage value decreases by 2,8% compared to the previous quarter. Collectively, this explains the decrease of the average mortgage value by 1,3% to €333.000.

People refinancing and taking out additional loans cause strongest growth in 5 years
Mortgage revenue of people refinancing and taking out additional loans grows by 64% in the second quarter of 2020 compared to the same quarter in 2019. Their mortgage revenue of €15 billion encloses 40% of the total market revenue. The number of mortgages grows as well by 64%. This is the strongest growth in 5 years for both revenue and numbers. “It seems that many people take the time to refinance, possibly in anticipation of an increase in interest, or to take out additional loans for renovation during this pandemic. That clearly has a positive effect on the Dutch mortgage market” according to Smit.

Market share Top 3 banks drops to an historical low
The market share of the top-3 banks has decreased to 45,6% this quarter. This decrease by -2,3 percentage points compared to the previous quarter brings their market share to the lowest level since the start of our measurements in 2006. Banks experience the strongest decrease of their market share among people refinancing and taking out additional loans

(-5,8 percentage points). ING experiences the strongest decrease for two consecutive quarters.

Over 4,950 advisors have passed the course for advisors in sustainable housing
Since last quarter, IG&H reports on the progress of industry collective Duurzaam Wonen. They are getting closer to achieving their aim to educate at least 80% of all mortgage advisors in sustainability by the end of 2020. To date, 5,980 advisors have applied, an increase of 21% compared to last quarter. This implies that 60% of all mortgage advisors have now applied.

We wish you great joy in reading this article and would like to invite you to respond!

Joppe Smit,
Director bij IG&H
E: joppe.smit@igh.com
T: 06 2035 2438

Author & data-analysis IG&H mortgage update
Annelies van Putten-Stemfoort (annelies.vanputten@igh.com)

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Edmond Alblas: new lead partner Insurance & Banking

By Announcement, Banking, Insurance, News

As of May 1, Edmond Alblas has joined IG&H as new lead partner Insurance & Banking. Alblas has over 20 years’ of experience as a consultant in the financial service industry. Working on complex strategic assignments and transformations for major Insurers and Banks. He gained significant experience with strategy, technology and change, from working as a Partner at Deloitte and KPMG.

Edmond Alblas: “I believe in translating customer problems into multidisciplinary solutions, in which close cooperation of all teams are very important. What makes IG&H very appealing to me, is that it has such multidisciplinair teams, which can provide customers an end-to-end solution. Think of: the Platform service practice with specialized people in low-code development and Business Engineering as the pivotal capability to accelerate solution development. Smart collaboration creates opportunities to accelerate customers to establish a renewed business model.

In addition, I gained a lot of experience in the financial sector internationally, and now I am very excited to use that to focus on reinforcing the Dutch financial service industry.”

Jan van Hasenbroek, managing partner at IG&H, says, “We’re delighted that Edmond choose to work for IG&H. He understands what is needed to bridge the gap between strategy and execution and the role of digital technologies in complex transformations. We are looking forward to a fruitful cooperation in the months to come to give Edmond a kick start and Insurance & Banking another boost.”

IG&H
IG&H is active in the field of consultancy and technology. As a sector expert, IG&H focuses on retail, finance, and healthcare. Currently, the company has 275 committed professionals who help organizations realize the digital transformation to radical customer focus.

Clientcase: AI-driven Commercial Credit Process

By Banking, Clientcases, Data science, News

What they wanted
Our client wanted to improve their commercial credit process for real estate clients and transform it to be more risk-based, data driven and efficient. This market-leading Commercial Bank experienced the need to maintain their competitive edge and contribute to company-wide cost reductions. Also important was the objective of freeing up capacity of their Front Office and Risk team specialists. These experts should focus more on new business, on innovation and on the biggest risks. Their commercial credit process was highly manual and especially the credit risk reviews required a lot of back-and-forth, precious time and lots of information.

What we did
We started by quickly building the value case and aligning the required stakeholders. Next, we introduced AI to largely automate the annual credit risk review cycle that was taking up thousands of hours each year. The client’s credit specialists trained our AI algorithms to assess the need for risk reviews. We used the specialists’ input and feedback to design the total solution in such a way that it was transparent, interactive and customizable. During a pilot the proof of value was highly convincing and the enthusiasm among specialists and senior management grew further. Then we started to use the AI model in practice, harvesting value and lessons learned, while preparing and realizing the full IT, process and Organizational change.

What we achieved
Within a few months the first AI model runs in production and automates >80% of all credit risk reviews. It outperforms the experts consistently in accuracy and helps redirect €500k annually in manual FTE.

AI not only accelerates the process and reduces costs; it also provides whole new capabilities. Using the AI model our client can now monitor risk on portfolio level and case level continuously. The model can also be used for quick scans of scenarios to spot which cases likely need first attention should the real estate market, or an individual client’s circumstances change. Building out new decision models for other parts of the process is in progress.

What they said
“Initially I was doubtful about the benefits of AI in real estate financing. The results have now completely convinced me”  – General manager Real Estate Finance –

Banks take societal role

By Banking, News

From crisis to opportunity
Even though the Corona crisis brings along huge challenges, it also offers the opportunity for banks to act in accordance with their purpose and take a societal role. This way, lost confidence of clients can be regainedAnd in addition, client loyalty can be increased by truly listening to clients’ needs and concernsBy combining fast decision making and execution power, banks can – especially now –  differentiate and position themselves as the partner in good and in bad times. The question remains: how? 

Banks take responsibility
The Corona virus has impacted the Dutch economy enormously within a short period of time. Big events are being cancelled, ‘social distancing’ is already the word of the year and both small, medium and large enterprises are forced to close their doors. As a consequence, many organisations are worried about their financial situation, also because most issued loans were based on growth, not taking this crisis into account.  

Immediately after the start of this crisis, many Dutch banks have acted upon their societal responsibility. Good JobBanks offer a great variety of support measures, such as extension of credit standards and deferral of interest and instalments, to support clients through these difficult timesBank employees are working overtime to answer questions of clients experiencing liquidity problems due to the Corona virus. While banks were part of the problem during the credit crisisthey are now playing a crucial role in the solution, thanks to strong capitalization and liquidity buffers. 

A challenging promise
While banks are well positioned to support entrepreneurs due to their strong capital position, mass demand of SMmight lead to huge operational challenges. Banks already find themselves in need of capacity for large compliance projects, like KYC and CDD, wherefore managing this crisis and the expected mass demand for deferral interest and instalments will only increase this need. All in all, this might lead to huge operational pressure. 

Making impact, now and in the future
During this crisis period, the operational execution and adaptability of banks are being testedFirst of all, the banks need to demonstrate to what degree they are able to support entrepreneurs efficiently. Secondlythis shows the ability of a bank to offer a solution for this crisis and at the same time keep the daily-operations up and running. For banks to actually position themselves as a partner in good and in bad times, it is necessary to deploy people, data and technologyMature use of digitalization and data-driven processes are crucial to efficiently handle applications. Doing this, banks are able to decrease their operational pressure and increase the delivered client valueThis way, banks can deliver their promise to support clients in need, today and in the future! 

In the following blog we will discuss the pre-conditions for successful crisis management.  

 Joppe Smit
Director at IG&H
E: joppe.smit@igh.com T: +31620352438 

Authors
Bas de Jong (bas.dejong@igh.com); Laura Hendriks (laura.hendriks@igh.com); Marijn Schneider (marijn.schneider@igh.com) 

 

IG&H starts series of blogs for banks in the Corona crisis
The banking industry takes societal role in the Corona crisis! In a series of blogs we will explain the lessons Corona teaches us and the opportunities this crisis gives us as the banking industry. The notion that the corona virus is impacting every bank, is a given. The virus puts huge pressure on the industry resulting in a great amount of questions and uncertainties. What is the effect of this crisis for our clients and employees? What can we do to make sure we can scale up after this crisis? What will the market look like after the crisis and how can we continue business like before the crisis? This first blog focuses on the impact of the Corona virus for commercial clients. 

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2019 – Q2 | Further mortgage market shrinkage in the second quarter of 2019

By Banking, Hypotheekupdate, News

Mortgage revenue (-9.1%) and the number of mortgages sold (-12.5%) fell sharply

Compared to the same period last year, mortgage revenue fell by 12.5 percent in the second quarter of 2019, as consultancy firm IG&H’s Mortgage Update points out. Since the average mortgage loan only grows to a limited extent, mortgage revenue is also considerably lower than a year ago (-9.1 percent). As a result, this is the third consecutive quarter in which the mortgage market is shrinking on an annual basis.

In the past quarter, the average mortgage loan rose to a record amount of 317,000 euros – only a slight increase (+0.5 percent) compared to the first quarter of 2019 and a clear indication that growth of the mortgage loan is decreasing.

“There are signs across the board that the trend of strong growth in the mortgage market, which has persisted for years, seems to be broken,” says Joppe Smit, who works at consultancy and implementation firm IG&H. “This is the third consecutive quarter in which we observe shrinkage on an annual basis, although the second quarter of 2019 was better than the first three months of the year. Record year 2018 seems to remain unparalleled, which will put an end to the consecutive growth of the past five years.”

Mortgage refinancers grow increasingly important
Most mortgages (more than 31,000) are still taken out by existing homeowners. This is an 8-percent increase compared to the previous quarter. Mortgage refinancers show the strongest quarterly growth with 13 percent. “The number of mortgage refinancers continues to grow,” says Smit. “Mortgage lenders and consultants that specifically target this group can take advantage of this. On the other hand, it makes banks with large mortgage portfolios vulnerable. They will need to do more to retain these customers.”

Mortgage is one click away with an app
A notable trend in the mortgage market is the growing interest of banks and insurers in simplifying mortgage applications. The market is in the early stages of a digital data transition. “Right now, it’s not yet possible to take out a new mortgage on the sole basis of digital data,” says Smit. “Several sources with reliable and verified data have now been unlocked, but the number of sources should be increased. In addition, mortgage lenders should adjust their processes and systems in such a way that digital applications can also be processed immediately. It’s simply a matter of time before we can submit a complete mortgage application with a few clicks.”

IG&H is one of the initiators of ‘Handig!’ (Handy!). The purpose of this partnership between HDN, ING, NHG, Florius, ABN Amro, Rabobank, De Hypotheker, and IG&H is to make the process of applying for a mortgage as fast and complete as possible based on digital, validated source data. “We see that more and more parties are exploring digital possibilities,” says Smit. “DUO, for example, experiments with possibilities to make government data easier to share, but other parts of the government also follow these developments with interest. Developments will accelerate once they get on board, too.”

Sincerely,

Joppe Smit
Director at IG&H
E: joppe.smit@igh.com T: 0031 6 2035 2438

IG&H Mortgage Update – authors & data analysis:
Niels Roelofs (niels.roelofs@igh.com); Sophie Dijkkamp (sophie.dijkkamp@igh.com)

Considerable shrinkage in mortgage market in the first quarter of 2019

By Banking, Hypotheekupdate, News

The amount of mortgages issued fell sharply in the first three months of 2019. According to consultancy firm IG&H’s mortgage update, it was the number of first-time and existing homeowners in particular that dropped significantly. “Currently, we also observe a considerable decrease in the number of mortgage refinancers. In 2018, this group was still responsible for the growth of the mortgage market,” says IG&H’s Joppe Smit.

Click here to read the full report (in Dutch).

The average mortgage loan was €316,000 in the first quarter of this year – a 5.2-percent increase compared to the same period last year. This growth is mainly due to the sharp rise in mortgage loans for mortgage refinancers. In the purchasing market, the average mortgage loan remains virtually constant.

Mortgage revenue is shrinking

In the first quarter of 2019, the total mortgage revenue was nearly €22 billion – a 9.6-percent shrinkage compared to the first quarter of 2018, and the largest since 2013. Compared to Q4 2018, the decrease was as high as 22.8%. In previous years, the usual decrease in Q1 was partly due to a reduction in the maximum loan-to-value on the annual limit and the additional growth in the fourth quarter, which compensated for this.

This year, neither of these developments is perceived. “The sharp decline we currently observe is truly a deviation from the trend after years of growth,” says Smit. “Both the relatively limited housing supply and the difficult position of first-time homeowners are to blame for it.”

Growth in large banks’ share

The banks’ share increased by 2 percentage points to 64.1 percent. This growth mainly comes from the three large banks, which saw their combined market share rise by 1.3 percentage points to 51.3 percent. Investment funds enabling non-bank lending also saw their share grow – by 1 percentage point to 18.3 percent.