The first wave of digital mortgage advisers started in around 2015.

By the time we launched Tembo at the end of 2020 it was clear that those in the first wave were facing some fairly major challenges to their business models.

I like to think of Tembo as part of the second wave, taking much of the lessons from the early digital mortgage businesses and building on them.

The most useful lessons centred on the specific needs of our customers, and how we could use technology to meet those historically unmet needs.

Our decision-making technology is really powerful and gives our customers all the potential alternative options

Mortgages, to this day, remain one of the least digitally advanced areas of consumer financial services — which means there is a huge way to go (and a lot of opportunity for our sector). That, to me, is a really exciting prospect.

Tembo initially focused on alternatives to equity release as a way to manage intergenerational wealth transfer. The retirement interest-only mortgage had recently been authorised and looked, on the face of it, like a great product, particularly for more affluent customers who wanted to release some equity without getting tied in to a lifetime mortgage.

Take guidance from customers

Eddie Ross — our chief product officer who joined from Mojo Mortgages — and I shaped the initial proposition, but quickly realised from listening to our earliest customers that they needed much more choice than this.

Within a few months we had expanded into a broader range of family mortgages and alternative buying schemes, including the joint-borrower/sole-proprietor product that was largely unloved at that stage.

Mortgages, to this day, remain one of the least digitally advanced areas of consumer financial services

Having raised investment from Aviva and Ascension Ventures, we set about building the technology platform. It was really important that this provided value to the consumer beyond an improved user experience.

Having listened to our customers’ needs we were then in a position to build tech around those needs, rather than building some great tech and going in search of a problem.

The power of technology

As a result, our decision-making technology is really powerful and gives our customers all the potential alternative options if they are struggling with affordability in one place.

There is nowhere else like that on the internet. The reason that is important comes down to that favourite word from the venture capital companies: defensibility.

Those in the first wave were facing some fairly major challenges to their business models

Mortgage broking is highly competitive so you need to have an edge, something else that is going to give you an advantage, particularly if you want to grow and take market share.

For some companies that might be exclusive partners; for others it might be a well-known brand or a strong, trusted relationship. For us it was the power of our technology. It means we can deliver to customers a proposition that others cannot.

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This article featured in the October 2023 edition of MS.

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