Q&A with Richard Harrison

First, can you introduce yourself for our readers?

I’m head of mortgages for Atom bank and have been with Atom for almost three years now. The role involves all the things you’d expect, but my primary objective is to ensure our mortgage proposition works well for brokers and customers alike. Our commitment to invest in technology and challenge the traditional processes used within the mortgage journey means we can provide excellent service to brokers and makes the role really interesting.

I’ve always been attracted to challenger banks in some form, those that are looking to do things a bit differently, and which have strong social values.

We have ambitions to grow our mortgage book, and our relationship with brokers is fundamental to achieving this. We are well placed to achieve this given our innovative technology platform which allows us to scale volumes whilst maintaining our leading service proposition.

Is the role of challenger banks to bring innovation to the mortgage market ecosystem?

For various reasons, innovation and product development within mortgages has probably not been quite where you would expect it to be over recent years, when you compare this to other product areas within financial services.

Our technology allows us to be quicker and speed up the journey to deliver better customer outcomes. Utilising automation to drive improved service levels means we can grow lending whilst continuing to provide great value products to customers.

What makes Atom Bank unique among other challengers?

Our mission is to be faster, easier and to provide better value to customers.

We’re among the fastest in the industry when it comes to application to offer times, and that’s down to our highly automated approach when assessing income and property valuations. As a result, our average speed to offer in September was six days and 25% of offers were made on the same day.

Speed and certainty is important to brokers, and provides genuine benefits to their customers. It’s a key advantage we have, and we want brokers to know that we can issue offers on the same day, and in many circumstances have issued offers in seconds, even for higher LTV purchase cases.

Then from a customer perspective, they value how our app keeps them fully informed from the point of application through to completion. Being able to accept their mortgage offer and T&Cs electronically in our app gains great feedback. This simplifies the process and makes it more transparent, which we see as a real advantage.

Is speed and automation becoming increasingly important at the moment?

With the advent of technology, customer expectations are growing all the time through every aspect of their lives. That shouldn’t be any different in financial services or the house buying process.

Being able to provide brokers and customers with an offer quickly, in some cases within seconds, is particularly important given the recent volatility in mortgage pricing and with customers facing higher mortgage costs. It provides greater peace of mind to customers when trying to finalise the purchase of their new home or when remortgaging to avoid paying SVR.

Is there a balance to be struck with human and tech, as cases get more complex?

Undoubtedly there is a place for manual underwriting within the industry. At the same time, we feel the customer journey can be quick, easy and efficient for a broad range of customers. This is evidenced by the fact that our Near Prime proposition, designed for customers with less than perfect credit, offers the same experience as prime borrowers.

Can you talk me through Atom bank’s near-prime proposition?

Prime lending represents the majority of our business, but we offer a Near-Prime proposition that still utilises this high level of automation to ensure we provide these customers with the same level of service. It remains a part of the market where we feel the needs of customers could be better served and we aim to do this.

This product aims to support customers in two ways. Initially we look to offer a fair value product to customers who have experienced some form of adverse credit performance whose options are more limited in the market. And secondly, we aim to support these customers in improving their financial status with the intention of offering them a Prime product when their initial deal matures.

It’s all about accelerating that transition for these customers so they can gain access to better value products.

Have you seen an increase in this group of customers recently?

I think the cost-of-living situation is naturally leading to a bit more activity in this area of the market.

There are signs in the market that some customers may be struggling to meet credit commitments. This may be more pronounced in terms of customers’ unsecured credit rather than their mortgage. We’re there to support these customers and give them more choice and this is where our Near Prime proposition can help.

Speaking of evolving support, Atom bank has made a series of criteria changes recently, what was the reasoning behind these?

In the Summer we made a series of enhancements designed to improve our affordability criteria and help customers gain the borrowing they require. We felt this was particularly important given the fact that house prices remain significantly higher than before the pandemic, with the cost of living crisis also adding pressure.

We increased our maximum loan amounts at higher LTVs where customers can now borrow up to £750,000 at 90% and 95% LTV. This move puts us into a market-leading position and has been particularly helpful for borrowers in London and the South East.

We also improved our Loan to Value criteria with self-employed borrowers now able to borrow 5.5x income up to 90% LTV.

The final change is there to increase the amount of variable income which can contribute to our affordability assessment from 50% to 70%.

How does the firm’s commitment to ESG show in the day-to-day?

A strong ambition for us is our commitments around climate change. We’ve made a pledge to become carbon positive by 2035, ahead of the Government requirements.

From a mortgage and lending perspective, we’ve just announced a partnership with Kamma which is going to help us understand the carbon footprint of our mortgage book. Once we have a better understanding of our funded emissions, we will look to develop product options which help customers reduce their carbon impact.

Beyond this, what is on the horizon for Atom Bank?

We’ve got an unrelenting focus on speeding up the mortgage journey. While we are market-leading today, that doesn’t represent the limit of our ambitions and we are going to automate that process even further.

We are looking to grow and scale the bank so we can challenge the incumbents, which will mean expanding our offering and developing our relationship with brokers in the years to come.

Originally published in The Intermediary magazine, October 2023.