Mortgage Trading Exchange's decision to open its electronic trading standards to allow them to integrate with other platforms shouldn't really come as a surprise.
Actually if anything it's common sense – call it survival instinct if you like.
After all, MTE faces competition from a common set of e-trading standards. That would mean intermediaries would be able to deal direct with lender websites using a common username and password, among other additional benefits. Intermediaries would probably still use MTE because of the fact that it is a central trading platform but if dealing with lenders direct were made easier MTE could face a drop in the number of its users.
Now while we may be a very long way away from Origo actually achieving anything like this, despite what it might want us to believe, the rules of the game have also been changed by MTE.
Instead of having to invest lots of money to change their own platforms and work towards the development of a common industry-wide XML language which would potentially speed up e-commerce - as well as the use of e-commerce generally within the mortgage industry - lenders don't have to change anything.
MTE has basically turned the argument for the need for common e-trading standards on its head by enabling different standards to work together, so the tough question people could face is does the mortgage industry need Origo?
The lenders must be rubbing their hands with glee given their natural competitiveness and inability to agree on most things.
But there is a snag. MTE isn’t the easiest platform to use according to some while others have been scathing in their description of its usability.
And this is why the rules have changed. Paul Pettitt, managing director at Origo, no longer simply has to sell the idea of common e-trading standards to mortgage lenders. What he has got to do is sell the concept of common e-trading standards that will make the lives of intermediaries and lenders alike easier and get lenders to pay for it as well.
He would no doubt probably argue this was always the job he had in front of him but the fact MTE has moved first by opening up its e-trading standards means Pettitt may have a harder time trying to convince lenders what Origo is proposing will be faster, better, stronger, etc.
And MTE already has a head start on Origo apparently, having signed up 26 lenders with negotiations with up to another 15 already at an advanced stage. If MTE is successful in those negotiations, Origo will have an even bigger job on its hands, given it is only talking to 19 lenders at present.
Lenders may decide what Origo is suggesting is simply too costly for them to become involved with and could well decide they would rather stick with the devil they know, and will make money from, than the one they don’t.
If MTE can become more user-friendly it may have got the jump on Origo to the extent it not only ensures its own survival but may keep Origo out of the mortgage standards market.
Mark Lofthouse, managing director at MTE, may have said he was not looking for a battle with Origo but given the development he is proposing, I suspect at the other end of the phone line he had a smile a mile wide.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Matthew West on 020 7484 9893 or email [email protected].IFAonlie
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