Fintech launches with 22-minute home loan

by Miklos Bolza11 Jul 2017
A new fintech Tic:Toc has emerged offering ‘instant home loans’ through a digital real-time loan processing system that connects customers directly to the lender.

CEO Anthony Baum told Australian Broker that in 2015 emerging digital lending capabilities inspired him to formulate and create an instant loan process.

Forming a partnership with Bendigo and Adelaide Bank last year, Tic:Toc will launch today (11 July) with the firm spending the last two years validating the idea and developing the platform.

As for the name, “it’s about time,” Baum said.

“What we saw was an opportunity for a customer to complete a home loan application and be fully approved – and in the case of a refinance even receive their full mortgage documentation – in the same timeframe it would take them to complete an application normally.”

This speed is acheived by decision-making and validation processes that work in real-time with document generation for refinancing done in “close to real-time,” he said.

“It will take approximately 22 minutes to complete the application online. The actual processing of that application is instant and will create a fully approved home loan.”

The system build ensures Tic:Toc remains compliant with legislative requirements such as Know Your Client and responsible lending while following the underwriting parameters agreed to with Bendigo and Adelaide Bank, Baum said.

“What we’ve done is digitalised all of those aspects through the customer application journey and our digital decisioning and validation platforms. At the end of the process, we are in the position to fully assess you and give you an on-the-spot answer.”

Customers will access the platform directly through Tic:Toc’s website which combines property eligibility algorithms, serviceability requirements, responsible lending processes and digital ID and financial validation.

“At the end of that process, you will get a response whether you’ve been approved, declined or referred. If the customer is approved and it’s a refinance, we will send through the documentation in as little as a few minutes. Sometimes it can take a bit longer depending on which state the client lives in.”

If the customer is referred, this means there are factors about the loan that need to be double checked, he added. This will take around 15 minutes to process, after which the application will get either approved or declined.

The service is targeted at eligible customers who meet Tic:Toc’s platform requirements: primarily borrowers in major cities and regional centres with over 20% equity in the property at launch.

“For those customers, it’s all direct. There is no broker access. Customers have a choice – they go to a broker, they can go to a bank branch, or they can get their home loan approved or refinanced online in 22 minutes.”

Tic:Toc also has plans to partner with more banks in the future.

“Bendigo and Adelaide Bank has been a fantastic partner but our intention is to partner with other banks to offer the same experience to their customers as well.”

Baum said that once the fintech branches out to other banks, assessing customer suitability will depend on the model chosen.

“If we offer a choice of brand and product at the front-end, that would be done through a product selection algorithm we’ve got in place. Alternatively if it is just under the same model as we run with Bendigo, it would effectively be the same process that any mortgage manager would run today, whereby they allocate the customer based on the same set of credit parameters. The only thing that would be different is the lender of record because it would be assessed under the same process.”

Baum concluded, saying it was about time home loans came up to speed in terms of process.

“I think the reality is that a lot of the processes and business practices in home loans are very outdated. They create a lot of time and cost wastage that today’s existing technology can eliminate. We’re looking forwards to passing the benefits of that onto customers in the Australian public.”

Related stories:

Fears of broker-replacing tech unfounded

Real estate portals to “smash” broker market

Fintech lender branches into broker channel

COMMENTS

  • by Tim 11/07/2017 9:15:47 AM

    Interested to hear ASIC's thoughts on a 22 minute home loan and how it fits in with the responsible lending framework. A home loan is the largest financial commitment someone will have and should justify the investment of more time to ensure they understand what they are entering into. I'm a broker and cannot believe these storeys about 22 minute home loans, especially in the current environment.

  • by Gary 11/07/2017 9:22:09 AM

    I too am interested how a Major Lender can allocate such a quick process when as a Broker we are subjected to un realistic time frames for a decision even when all supporting documents provided. If all this does is provide an AIP then where is the benefit?

  • by PF 11/07/2017 9:25:10 AM

    Sounds exactly like cherry picking to me.