A major US fintech has launched a new “instant mortgage” product in the APAC region that promises to approve home loans in just 60 minutes.
Silicon Valley giant FICO first launched the product in Singapore at the height of their foreclosure and reaped the rewards, with US $ 700 million (A $ 977 million) in new loans created in only three months.
The product saw FICO’s Origination Manager platform adopted by Singapore bank OCBC to create an end-to-end product that customers could use to apply for a mortgage, then receive a decision within an hour, with AI. , automation and online processing.
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It might be better compared to Australia-based operators such as 86,400, Nano Home Loans, and Athena Home Loans, although the 60-minute claim would place them faster than those three providers.
Aashish Sharma, leader in the risk lifecycle and decision management segment, explained that the Singapore market was ready for such a product and embraced it wholeheartedly.
âPreviously, the digital option did happen, but that was only for certain segments – especially the more savvy when it comes to digital adoption,â he said.
âWhat we saw immediately was a change in behavior because everyone wanted a bigger house because of working from home. But you couldn’t buy a house because you couldn’t get out while in lockdown. This is where OCBC stepped up and offered this instant mortgage.
âThe results speak for themselves, as we made $ 700 million in loans during the period and 30% of OCBC’s total annual revenue as a result. “
âThe consumer was happy and confident to be able to initiate from their living room and where there was a need, we would do audio or video sessions. The oral feedback has been fantastic.
Instant mortgages delivered in 60 minutes
Brokers will be able to offer the product to their clients and, if necessary, explain its use to them, according to Paul Sywny, client partner at FICO.
âI don’t see the mortgage brokerage channel in Australia going down anytime soon,â he said.
âWhat we’re trying to do is improve the customer journey and give the yes a shorter lead time, and whether it’s through a broker channel or a direct digital channel, we want to increase the speed and eliminate friction. “
âBrokers refer their clients to the Instant Mortgage or banks can give them access to the process – or brokers can also hold hands with their clients throughout the process. “
Sharma added that in Singapore brokers had not been cut.
âIt will be a value chain,â he said. âWe think about ecosystems and partnerships, and that’s what we’re seeing in Southeast Asia. Banks are attacking several agencies, be they brokers or retailers. This concept of partnership is the driving force behind digital innovations. We believe that everyone has a role to play in creating value.
What Mortgage Brokers Need to Know About Instant Home Loans
One of the key factors in adapting the Singaporean market to the product was that Open Banking is well advanced, which has allowed many data providers to integrate into the system and thus back up applications faster. .
The tax system, for example, is available as an open API and can thus immediately provide up-to-date financial information to lenders and brokers.
âThe solution in Singapore, which is relevant to Australia, was to integrate the open APIs that the Singapore government was proposing for income tax,â Sharma said.
âOnce you integrate all of the open APIs available, you see the data running analyzes, executing decisions, and finally providing a response within 60 minutes. “
âThe same will apply as Australia opens up Open Banking and APIs are exposed. This solution will almost become an orchestration of calling these APIs in one place and providing a final answer. “
Paul Swyny said advancements in Open Banking were critical to making products like the work of FICO.
âWe see this application process and this platform as part of the digital arena,â he said. “We are certainly seeing a lot of inquiries about Open Banking in the Australian market, and our technology can enable that and does in other markets.”
âWhether it’s the ability to analyze traditional data, such as applications, or more non-traditional transaction-type data provided through a bank statement sent through Open Banking, we can integrate and use it in the process. loan application or in our analytics to ensure a better outcome for the consumer.