FinTech shed light on its long-term strategy in the mortgage market following the launch of its new business activity.
Last week, fintech lender Tic: Toc Home Loans announced the launch of its first ‘software as a service’ (SaaS) product, XAI Validate, which was reportedly designed to simplify the home loan application process for lenders and brokers.
According to Tic: Toc, its new service aims to address issues related to complying with responsible lending obligations under the National Credit Act by allowing users to gain a deeper insight into a person’s income and expenses. borrower faster.
FinTech claimed that its client-oriented mortgage lenders, which have already adopted the platform, experienced an 85% improvement in appraisal efficiency while maintaining credit quality, with fintech revealing that the platform has no loans over 30 days in arrears in its $ 600 million portfolio.
Speaking to Mortgage Business, Anthony Baum, CEO and co-founder of Tic: Toc, was asked why fintech has chosen to share its processing capabilities with its competitors.
In response, Baum said deploying his SaaS platform is part of a larger strategy to leverage his customer-centric business to build and grow a business activity.
“At the end of the day, what we’re seeing is that some of the best fintech companies in the world [discover] a better product, build the technology, use this business to refine that technology and get really good results for customers, ”he said.
“[Fintechs] so realize that he‘building brands in financial services is very expensive, it takes time, it‘a highly competitive market.
“The best business model is to take this know-how and make it available to the industry. “
Mr. Baum said Tic: Toc is able to grow its mortgage lending business, but would instead invest resources in expanding its lending solutions department.
“Our efficiency levels are such that our direct business is expected to reach profitability by the end of the first quarter of next fiscal year, but the reality is that we‘We’re doing this from our already very aggressive pricing, ”he continued.
“If we just wanted to gain market share in the direct space, we could price well within our current position while still making money.
“The reason why we don’t‘it’s not us‘not looking to kill the industry, we want to build a good business, but we want it to be built by effectively providing the proving ground with which to create and validate these technologies and make them available to the industry.
He added: “The best [way] developing these technologies is understanding what they do to the customer, which means you need a direct business for at least a period.
However, according to Baum, fintech has no immediate plans to phase out its customer-facing business, which is expected to grow 8-10% each month.
“At this moment, we‘I’m very comfortable with the combined strategy of running a direct business and running the business of the business separately, ”he said.
“We run it as a separate business and, in effect, the direct business is a customer of the business. “
Bendigo and Adelaide Bank – which owns a minority stake in fintech – signed a white label deal with Tic: Toc in 2019, becoming the first lender to offer Tic: Toc technology under its own brand.
Mr Baum revealed that Tic: Toc is currently in negotiations with interested parties seeking to join the platform, with fintech due to make an announcement “relatively soon” regarding a major reseller deal with a “big player in the industry”.
[Related: Tic:Toc launches new home-lending service]
Charbel Kadib is the Mortgage Securities Editor at Momentum Media.
Prior to joining the team in 2017, Charbel completed internships with the public relations agency Fifty Acres and the Department of Communications and the Arts.