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As the digital revolution in banking advances, the whole lending landscape is transforming to focus on the borrower. This has ramifications throughout the lending process, but also presents lenders with a tremendous opportunity.
“In this environment there is an opportunity for lenders to bring three important things together: provide all the information that the borrower needs to have before they decide to close their loans, enable the right amount of borrower engagement, and gain what banks lost during the crisis — trust,” said Abhinav Asthana, director of consumer lending practice at Tavant Technologies.
Over the last five years, the quality of mortgage borrowers has improved significantly. More than 50% of individuals in the U.S. have FICO scores over 700 and more than 35% have FICO scores over 750.
This increase in FICO scores is also reflected in the largest group of potential borrowers, those aged 25 to 35. Many in this digitally engaged population are still deciding on their primary financial institution, which includes their mortgage lender as well.
“Because about half of borrowers chose to get their mortgage loans outside their primary financial institution, financial institutions need to continuously improvise on their engagement levels with their customers to be able to retain them as mortgage borrowers,” Asthana said. “The primary reason why borrowers choose to get their mortgage loans from lenders other than their primary banking institution is because of the frustrating and complex mortgage experience.”
Lenders who want to capitalize on this market opportunity need solutions that not only change the way lenders interact with borrowers, but also the way lenders operate in the back offices and fulfillment centers. This includes developing intelligent multiplexing third-party service connectors to intuitive document ingestion (coupled with smart OCR for data extraction), all the way to autonomous underwriting with machine learning and statistical feedback loops.
“Our goal is to provide lenders with a greater share of wallet, portfolio retention strategies and a continuous innovation roadmap,” Asthana said.
Tavant’s digital disruption roadmap is not only about website modernization or mobile enablement — the company has been focusing on optimizing the entire borrower journey, from front office to back office. Tavant is leveraging the wisdom gained from working with some of the leading bank-tech lenders, which are catching up and competing with FinTech companies.
“There are a lot of insights that we draw upon from their experience of being a traditional lender and how they are using ‘design thinking’ across their entire organizations, driven by the desire to better understand and meet customer needs,” Asthana said.
Tavant also uses its experience working across industries to help lenders execute Millennial strategies, leverage gamification in lending, create predictive monitoring and propensity modeling.
“We have a unique advantage of working with disruptors in the industry and is able to create cutting-edge products, including voice interaction based applications in the Apple, Google and Amazon ecosystems,” Asthana said.
Tavant’s expertise stretches across the entire loan lifecycle — from lead management, sales, processing and underwriting to closing and funding, and on to servicing and secondary markets. The company’s proficiency lies in the evaluation and deployment of pricing engines, workflow engines, rules engines, document management systems and rich Internet applications.
“Our strategy is to surround, extend and enhance the lending technology landscape,” Asthana said.
“We understand user behavior and our products are engineered to disrupt the industry by providing game-changing experiences across the lending eco-system.”
