Project Overview
A UK FCA-authorised mortgage lender offering residential mortgages needed to rebuild their mortgage decision e...
Technology Stack
Compliance & Standards
The Challenge
A UK FCA-authorised mortgage lender offering residential mortgages needed to rebuild their mortgage decision engine — a 2012 legacy system that required manual affordability calculations, could not consume Open Banking income verification data, and produced customer communications that failed FCA Consumer Duty Consumer Understanding requirements. The new engine needed to process 400 applications per day with FCA MCOB (Mortgage Conduct of Business) compliance, Open Banking AISP income verification, and automated KFI (Key Facts Illustration) generation. Budget: £140,000.
Our Approach
FCA MCOB 11
- stress-tested affordability calculation (applicant income after income tax and NI, committed expenditure including all other credit commitments, and a stressed mortgage payment at a rate above the product rate as per MCOB 11.6).
- Open Banking AISP (TrueLayer): 12 months income data directly from employer bank transactions — eliminating payslip fraud.
- Self-employed: 2-year average from business bank account transactions.
MCOB 5 and MCOB 7
Key Facts Illustration (KFI) must be provided before application proceeds.
KFI generation
- product selection → total amount payable calculation → APRC (Annual Percentage Rate of Charge) → MCOB-prescribed format KFI as PDF (WeasyPrint).
- MCOB 7.6: KFI must be personalised to the applicant — no generic illustrations.
Consumer Understanding
- all customer communications at Flesch reading ease >
- 65.
Consumer Support
complaint pathway clearly signposted at each stage.
Products and Services
APRC clearly disclosed before any commitment.
Price and Value
total cost of borrowing displayed across multiple mortgage terms for comparison.
MCOB declined decision letters
specific reasons, plain English, Financial Ombudsman Service (FOS) referral information.
Experian credit report API
- affordability credit data, public information (CCJs, bankruptcies, IVAs).
- CIFAS National Fraud Database screening.
Automated fraud indicator scoring
- income verification consistency (Open Banking vs stated income), address verification, bank account ownership verification (payee name match).
- High-risk applications routed to human underwriter.
The Results
Engine live at 16 weeks, £132,000 — under budget.
Application processing time: 4.2 days → 6.8 hours average.
KFI generation: automated — previously 45 minutes manual.
Consumer Duty audit: zero adverse findings — Consumer Understanding outcome scores particularly commended.
Income verification fraud: 3 fraudulent income declarations detected in first month (previously 0 detected — would have resulted in mortgage approvals).
MCOB audit: zero compliance failures in first 6 months.
“Three fraud cases caught in the first month from income verification. We would have approved all three under the old system. That is £780,000 in potentially fraudulent mortgages that did not complete. The Consumer Duty audit was the cleanest we have had in 6 years." — Chief Risk Officer, UK Challenger Mortgage Lender (name withheld)”
Project Details
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