Modernising a Legacy Industry with a Product-first Approach - Krystle Kocik (PEXA)

Andrew For today's episode, I'm delighted to be joined by Krystle Kocik. Krystle is the Chief Product and Experience Officer for PEXA here in the UK. PEXA are a global technology business in the home buying space. In this role, Krystle and her team are accountable for delivering a property completions platform to transform the industry.

And I think those of us based in the UK would agree that it's very much needed. Krystle worked in the Australian business for over 10 years. where she led the design of the platform that's used there today with over 90 % market share and moved the property industry from paper to digital. Prior to PEXA, worked for a global consulting firm, helping major banks in Australia transform the mortgage journey for their customers.

Outside of work, Krystle loves to travel, hiking and cars. And in her earlier years in true Australian style, Krystle trained as a professional swimmer before the need to turn her attention. to our studies. Welcome to the show, Krystle.

How are you doing today? Krystle Good, thank you, Andrew. Thanks for having me here. Andrew No problem, it's really great to have you here.

So by the very nature of what we do, the short form on the podcast, we do jump straight into things. So we're talking very much about the property industry and obviously the need for modernization. So do you maybe just want to give a quick overview of that industry and around that need? Krystle Yeah, absolutely.

So I guess the property industry is quite a big asset class. It's actually the largest asset class in the world. In the UK specifically, it's worth probably about £8 .5 trillion.

So it's pretty, pretty significant. But when you actually look at the process of buying and selling, based on quite a large piece of research that we did earlier this year, we saw it's the second most stressful life event Andrew Yep. Krystle for people second to divorce. I know they're often going...

Andrew Yep. I thought you were going to say marriage. Krystle It wasn't the list but it certainly wasn't on But then when you think about even a remortgage, so you're just moving your existing mortgage, that's even the fifth most stressful. So there's quite a lot of, I guess, challenges in that industry, very paper -based.

Andrew Yeah. Krystle There's a lot of interactions between parties where there isn't much visibility. So you've got a consumer not knowing, do they call their broker? Do they call their lender?

Do they call their conveyancer? And we can see through the data points, there's quite a lot of customer detriment. So as part of the process, you've got 81 % of people that are purchasing homes that have multiple issues, whether that's increased fees, unexpected fees, fall through rates, delays, challenges with their property, etc. So it's an industry that's definitely ripe for change.

Andrew Yeah, and I think, I mean, me included, a lot of the people listening to this today would have experienced that process. And it is absolutely awful. So I'm in the process of selling a property at the moment, and I need to remortgage my own home. And it's just a nightmare with the way that that process is managed.

I'm not sure old school goes far enough in terms of how the current processes are managed, the need for putting Krystle Do you it? Andrew wet signatures on everything and everything needed in post. it's absolutely crazy when you think of the way that other industries like financial services, et cetera, have really advanced the way that they operate through the use of tech. So definitely one that's needed.

Krystle Yeah, yeah, yeah. And I think people's expectations are changing quite a lot as well. So with kind of, you know, the tech boom and, you know, so many things being digitised, you can track your parcel, you can, you know, you've got visibility of what's going on. And so people's expectations are changing.

And so they have that expectation as well, kind of in, you know, the purchase space. And when they go through it, it makes really good barbecue conversations. Andrew Of course. Yeah, definitely.

And interestingly, because of the big market share, obviously, that PEXA has in Australia, what's the difference in terms of the effect on transaction time if you were going to compare Australia and the UK? Krystle Yeah, so for example, for a remortgage, traditionally it used to be about 42 days in Australia, that's down to about 15 as an average, and you can actually do same day remortgages. So that's a property offered by all of the lenders. And then when you look at the sale and purchase as a comparison point, in the UK, takes over 150 days to complete a property.

And that's actually when it goes through because Andrew Wow. No way. Krystle If you remember, kind of when the earlier points around fall through rates, there's 31 % fall through rate. So you make an offer on a property and then you find an issue and you pull out or the seller pulls out and then you have to start all over again.

So it's, in most cases, much longer than 150 days. Whereas in Australia, you can settle within 30 days. So it's quite a different experience. Andrew Wow, what a dream.

A month to complete your process of move house. Krystle And then it would just make the market so much more buoyant as well. And you wouldn't dread the thought of selling your house for several years. You actually do it, you would just get on with it.

Andrew Yeah. Yeah. Yeah, cool. So when you're looking at this from a product perspective, what are the big challenges that you need to solve through the product?

Krystle Yeah, so I guess, you know, there's a few points to kind of touch on. The first one really is just the industry that you're selling the product to. And in our case, it's kind of the conveyances, lawyers, lenders, et cetera. And that industry is quite steeped in tradition and have been following kind of very similar processes for decades.

And so it's that fear of change. And I guess, you know, just Andrew Yeah. Krystle having concerns around, what impact will this have from a regulatory point of view or what will happen to my professional indemnity insurance? Will that go up?

Am I going to be covered? All these sorts of challenges. It's also quite a crowded space in the sense a lot of organizations have tried to create kind of point products, products that kind of fix one part of the puzzle. Andrew Yep.

Krystle Whereas we're kind of looking at a more of a holistic platform that really makes an impact to the entire industry. So there's, you know, the fatigue, I guess, from conveyances as well. It's just another company that's coming to sell the product. And I guess, know, over COVID as well, we saw, I guess, an acceleration of uptake of digital products or trying to alter Andrew Yeah.

Of course. Krystle quite average processes. So, you know, the fact that you've automated a CSV file doesn't mean you've, you know, you've got the best outcome. But, know, trying to, to, I guess, sell a platform that, you know, you might have part of, part of the problem solved, but not entirely, it's kind of a bit, a bit hacky.

It has been a challenge as well. And I think it's just, it's really important from our perspective from product perspective is really around kind of winning hearts and minds and kind of alleviating those concerns like the PR insurance, for example, actually going to the insurance brokers, talking through the proposition, seeing what value they see and actually being able to kind of help kind of support the conversations with the conveyancing community, how we are actually supporting their journey.

And we already have some of these problems and concerns that they've had. Andrew Yeah. Of course. Yeah, because I would imagine by the nature of the industry and the people involved, there's quite a bit of resistance to change and using tech.

And I guess a phrase you've probably heard a lot over the years is, we've always done it like this, and it's fine from the conveyance's side. Krystle Yeah, absolutely. And it's the exact, I guess, challenge that we faced in Australia. And it was, you know, 10 years earlier, 15 years earlier, where the questions that we were being asked was, what happens if the internet goes down?

It doesn't mean your Wi -Fi goes down, but the question was like the entire internet infrastructure goes down. So it's kind of the sentiments are similar in terms of some of the... the concerns, fortunately we've moved forward a bit in terms of the acceptance of technology as being the way forward. Andrew Cool, so when you're looking at these challenges, what's the approach that you've taken in order to try and overcome them?

Krystle Well, I think, you know, because we're trying to make such a mark in the industry, it's quite significant transformation. It's trying to kind of launch a platform, launch a product that proves the value early on. And when we talk about kind of prioritization, which is always the hot topic in product delivery, that's of been our focus around, well, what are those really significant challenges in the market that we can solve through Andrew Yeah. Krystle a truly innovative way and actually launch that in the market and start with easier transactions.

So in our case, we are starting with remortgages first and then building out the sell and purchase journey. And ultimately, the aim is to bring parties together into a platform. So they've got full visibility. You know what tasks are going on.

You've got the same piece of information, same data. Know who needs to do what and actually accelerate that process. Andrew Yeah. Krystle we also, one of the key things as well for us is really taking the industry on the journey.

So how do you create customer forums, take insights from them and actually loop back and prove to those customers that you've taken those insights and you've, know, you, you've actually done something meaningful with it. And the other part as well, kind of broadening that out for us has been engaging various parts of the industry. So not just. Andrew Yeah.

Krystle you know, the conveyances, the lawyers who use the platform, but the land registry, HMLR will hugely benefit from the output, the quality of data, you know, as part of our form, engaging with the peak bodies, the regulators, et cetera, to build advocacy and support for the change. And, you know, you start seeing them then kind of speaking to their members about, you know, the positive change that we're looking to make. So I guess it's a combination of Andrew Yeah. Yeah.

Krystle of winning hearts and minds and just making sure you're really listening to your customers and proving that you are actually making life better. Andrew Yeah, and I guess it's a kind of industry where if you win the hearts and minds of a small group and then they become the champions of your product, then that's then going to create interest and then you would hope then the demand from people who might be resistant to that change. Krystle Thank you. Yeah, absolutely.

And one of the, was actually a very nice thing that we saw in Australia was that if you, so in the transaction you would have the buyer solicitor and the seller solicitor. And if you have the buyer solicitor who wanted to use PEXA, but the seller solicitor wasn't on there, call the seller solicitor and convince them about the benefits of PEXA. And it actually started building out that way around the advocacy across the conveyance. Andrew Yep.

yeah. I was just going to say that's a really good point actually because they almost then become indirectly salespeople for you because it's obviously hard to penetrate a market generally but if you've got the one side of that process using the product and are able to tell other people how great it is then it obviously then helps you with market engagement and market penetration. Krystle yeah. Sorry.

Yes. Yeah, yeah, yeah. Absolutely, absolutely. And I think that the more people you have using the platform, so the more two sides that you can get in that one transaction and kind building that out for the rest of the industry, the better in terms of the benefits that everyone can realise.

Andrew Yeah, have you, interestingly, have you seen any big differences between the UK and the Australian markets or are the challenges all very similar? I guess maybe cultural and attitude differences or is it, was everybody as frustrated in Australia as they are here? Krystle Well, the Aussies and the Brits are quite similar to me. I you all get along so well.

to be honest, the challenges are quite similar. I was quite surprised. mean, there are nuances in the process which are quite, you know, which are different between the two countries. But I think that the challenges around, you know, ultimately, you know, the detriment to the consumer were quite...

Andrew Yeah, yeah. Yeah. Krystle you know, quite similar. And I guess, you know, the heavy paper based lack of communication, lack of visibility, et cetera.

They're quite, quite similar. And I think that on the lending side as well, between Australia and the UK banks, they actually do operate quite, quite similar. And I think there's a lot of shit across the country. So we haven't built, we haven't picked up our Australian platform and put it into the UK.

We've kind of started from scratch. Andrew Yeah. Krystle But taking a look, we've been able to take a lot of the learnings, the IP from Australia and they resonate here in the UK. But of course, building, you know, something that's fit for purpose for the UK.

Andrew Of course, Cool, so let's start and wrap things up and what we always like to do is give our listeners three key takeaways. So when we're looking at changing a market that's maybe resistant to that change and the things that we've talked about, what are the three key takeaways you would give to people listening today? Krystle Yeah, so I guess, you know, think about what good looks like. So where does the industry want to get to?

And you will get plenty of feedback on that. So we're kind of clear in terms of where they see the end vision. And I think when you're thinking about the solution and the platform and the features kind of anchoring towards that end state, and sometimes it's quite a big change, but ultimately you have to kind of get to get to that point and bring people on the journey. Andrew Yeah.

Krystle I think kind of similar to the one of the points raised earlier was around, you you can't force an industry to change. It's very much winning hearts and minds, taking people on the journey. You can't force people to change. But if you start proving value early, you get advocacy from across the industry, then that helps kind of move your, I guess, building kind of the uptake of the platform.

And I think Andrew Yeah. Krystle Everyone knows nothing goes to plan. you have a strategy, you've got a direction. If it's not working or you're getting significant pushback, you've got to be open to pivoting your strategy.

whether that's kind of coming up with an inorganic strategy or whatever that is, you need to be open to making that change in order to make your platform successful in the market. Andrew Yeah. Yeah, cool. Well, thank you very much for taking the time to talk to us today.

I'm really looking forward to seeing PEXA be successful in the UK. Yeah, because if I need to buy and sell a house in future from a purely selfish perspective, I want it to be as easy as possible. But it's been really great to talk to you today. Thank you very much.

Bye. Krystle Thank I hope you're okay. Thanks, Andrew. Bye.