KENSINGTON MORTGAGES
£ 5bn
Current value of mortgage book
but they also need flexibility and optionality as well . One of the things that we ' ve done is put in a solution that allows customers at the end of their fixed term to choose another product . And we ' ve created that in a digital form , so that when customers move off their fixed rate , we ' ve got clarity on how that can happen and how that can be achieved in the most affordable way for their circumstances .”
Data and technology are fundamental to mitigating risk Of course , accepting customers that other lenders turn away means a careful understanding of risk is needed – something which Kensington mitigates by utilising the data and technology it has to hand . “ Risk is our business ,” Foulsham explains wryly . “ That ' s what we manage . Obviously it ' s the same for high-street lenders . What I would say is , rather than taking a fairly heavyhanded approach , we take a more precise and tailored approach . It ' s our job to really understand risk , both for our customers and how we underwrite .
“ We have a model called VECTOR , which contains mortgage loan level performance data over a period of 30 years and includes 32 million data points through several macroeconomic cycles . The wealth of data allows us to deploy a broad variety of model uses . That ranges from assessing our underwriting accuracy to the effectiveness of pricing for new products .
“ Individually , we look at customer circumstances , and I think it ' s a different type of risk management and risk assessment when customers come to us rather than larger high-street lenders . Because we have the data and the human touch , we can blend those into a better understanding of what risk means to the customer in terms of payment plans , for example , but also risk to us in terms of making sure the loan period is appropriate . In many respects , being more tailored and more personalised in our product set allows us to have greater insight not only into the customer ' s needs , but also the risks around that .”
Providing a tailored approach also has the potential to create extra work across all areas of business activity . Like many lenders , Kensington has turned to automation to help ease the pain points that this would usually create – but Mark Foulsham is keen to stress