According to the CEO of Australian fintech Tic:Toc, Anthony Baum, the platform’s tech can approve a home loan in under an hour, with the fastest approval for a dual applicant mortgage having been 58 minutes from start to finish.
Speaking to Mortgage Business, Mr Baum noted that lenders – and particularly those servicing broker loans – had struggled with turnaround times recently, adding that Tic:Toc’s software as a service (SaaS) offering could help overcome these delays.
He explained: “I think, at a holistic level, the workflow-based processing of home loans in the larger and traditional players has seen only very modest change, with only some elements being automated or digitalised along the way.
“Fundamentally, the solution to that is automation; using technology effectively to assess an applicant(s) holistically, and all of the data associated with those applicants, and then effectively putting a human in the loop (to the extent it is needed) to actually look at the elements of the application that are outside of the credit policy/business rules. That’s what the Tic:Toc platform does,” he said.
“Our technology is approved to put home loans on our funder’s balance sheet without human intervention. It’s only if it’s required by that lender does a human need to look at it.”
Mr Baum explained that the platform, which first launched in 2017 and began offering its XAI Validate SaaS solution in 2020, uses an “artificial-intelligence (AI) ex-human-in-the-loop design” to automate ID, person-to-title checks, credit checks, property valuation checks and serviceability.
“When the customer’s circumstances are highly validatable with good data quality, then, effectively, you can approve a customer – even with human intervention – in under 10 minutes,” he said.
However, the CEO acknowledged that more complex customers or lenders using exception-based underwriting may take longer to approve due to “the human element” (for example, if they fall outside of the lender’s business rules/credit policy and require referral/approval from the Designated Lending Authority/credit assessor).
While the CEO acknowledged that “the reality is that that is the norm today”, he added that Tic:Toc was, “within a business rule or two”, getting “darn close to fully approving loans on an automated basis”.
However, he noted that this was dependent on the parameters set by the lender.
“You sometimes can’t get rid of the human; the human just does more value-add when this technology can’t solve for it. And that’s the key: building your technology in a way where the human has everything they need to be able to ideally to quickly identify what is missing, but it comes to them as holistic as possible in the first place.
“At the end of the day, for customers, where it can be expedited, it is expedited. And that’s the vast majority,” Mr Baum told Mortgage Business.
SaaS could resolve turnaround time issues
The Tic:Toc CEO added that he believed more lenders would be looking to harness SaaS platforms in future as a means of plugging in tech without needing to build proprietary and costly technology, highlighting the recent move by NAB to acquire neobank 86 400.
“Platform application is here. Look at AfterPay and SocietyOne using 10x technology and Westpac balance sheet to offer deposits to the customer bases of those brands… Because of the capability and cost required in developing these digital platforms, it makes sense to ‘rent’ them, in effect, as opposed to trying and building them internally.
“That’s, effectively, our perception of what has happened with the acquisition by NAB of 86 400. NAB could have built that platform, but they’ve actually chosen to purchase it.”
He added: “If you think about cost and being able to be competitive in the current and future market (and I can’t see margins going up in home loans) then it makes sense. Automation drives efficiency, and efficiency drives better customer experiences (both externally and internally), and it provides regulatory compliance (by automating the financial position) and reduces cost.”
Mr Baum went on to state that the platform could particularly benefit lenders who have been struggling to service the increase in broker-lodged loans in recent months.
“Our goal is to break our platform down into modules. The would mean that banks can purchase our technologies to embed them into their own proposition, so that they can improve the customer experience for brokers, for example. It’s adaptable,” he told Mortgage Business.
“So, if someone was focused on developing it to focus towards the broker channel specifically, then you’d effectively just need to remove the digital UX for the customer and embed it into a solution that works with existing industry technologies to expedite the turnaround time for the brokers.”
He added: “It’s really important that technology doesn’t just work for the consumer, it’s also got to work and be a good experience for the broker or assessor that are using the technology. So, digital experiences are two-way, that’s really the key.”
As well as focusing on offering its technology to lenders, the fintech is also expanding its SaaS to brokerages, too.
On Thursday (22 April), the major brokerage Aussie announced that it was launching its first online direct-to-consumer digital lending product in partnership with the Australian fintech.
Under the new partnership, Aussie will utilise Tic:Toc’s technology for its Aussie Online offering, starting with Aussie Edge (funded by Bendigo and Adelaide Bank).
According to the two companies, consumers coming to Aussie for a loan will be able to either use the broker channel, or apply online for a Aussie Edge loan themselves on a “self-serve” basis.
Aussie CEO James Symond said: “Aussie is continuing to adapt to the ever-changing mortgage market. While the majority of consumers will continue to use a broker, there is a growing cohort of consumers who want to be self-directed in finding their own home loan online.
“Our digital lending product has been designed in partnership with Tic:Toc to offer a simple and convenient way to get finance approved. Borrowers can save a significant amount of time as they can apply online, even on their mobile device, and get fast approval. For those customers who find along the way they need the guidance of a broker, Aussie can offer that – giving customers the best of both worlds.”
Mr Baum commented: “We are thrilled to be partnering with Aussie, whose customer-first approach aligns with our own – helping more Australians take control of their home loan journey.
“Tic:Toc’s world-first technology creates significant efficiencies in the home loan process, with the ability to fully automate a home loan experience from the start of an online application to contract generation. This kind of time-saving can translate to days of a credit assessor’s time, and weeks for a customer waiting on their approval.
“We’re very excited Aussie is embracing our technology to deliver faster, digital experiences for their customers.”
[Related: Tic:Toc launches new home-lending service]
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.