Digital bank Volt is preparing to launch its full digital mortgage offering in the second half of the year as part of a new partnership with the Australian neo-lender mortgage market.
Volt was originally set up for use IRESS ‘MSO Software for recording and evaluating mortgage applications. However, the partnership ended when IRESS’s Australian mortgage software business ceased operations last May.
CEO and Co-Founder Steve Weston said iTnews Instead, Volt decided to design and build its own mortgage process as part of a new partnership with the Australian Mortgage Marketplace (AMM).
“When we were looking at the design for a mortgage process, we took the time to look around the market to see if we should build it ourselves,” he said.
“When we saw that the AMM team we had known for many years had practically built what we had designed, we decided to work with them instead of building for reasons to market and cost [one] ourselves.”
The consumer neobank originally planned to launch its mortgages much earlier for digital purposes only. However, Covid-19 caused a slowdown as the team reevaluated the economy.
According to Weston, Volt is currently working on an initial $ 50 million proof of concept (PoC) with a plan to first use mortgage brokers to assist clients with inquiries before developing their own direct mortgage solution.
Weston said when the PoC is finalized, the next step will be an internal review and regulatory approvals ready to “accelerate lending.”
Currently, according to Weston, the average traditional home loan process can take up to 27 days to receive unconditional approval.
Weston said the “rich algorithms” behind Volt’s process will compress that timeframe to 11.5 minutes.
“Instead of having to send a human to evaluate, the databases are now so extensive that you know that this area is the right value for this property,” he said.
“You can remove a lot of manual labor from a process and make credit decisions more responsibly.”
Weston also went unimpressed by the big banks’ digital home loan offers, saying speed is “the place we get more of our business”.
“We will find that many people will choose to go our way,” he said.
“You have this certainty and can make an offer to buy a home. So a great competitive advantage will be speed.”
Volt will also have its Banking-as-a-Service (BaaS) platform to differentiate itself from its competitors. Weston said other lenders could potentially be white label in the future.
The digital bank entered into a partnership with Railsbank, which operates in Australia as Railspay, at the beginning of this year.
The partnership enables Railsbank to expand its footprint in the Asia-Pacific region and leverage Volt’s BaaS platform and infrastructure to provide Australian customers with products such as bank accounts, cards and payment solutions.