A new decision-making software solution from technology provider Finova has been created to help lenders and brokers overcome the problems caused by delays in the mortgage process.
Called Optimo, the software will help lenders with providing more intelligent, personalised pricing, tailored affordability outcomes, and streamlined scorecard models and reduce the speed-to-market of mortgage decisions to a "matter of hours".
Over the past year, lenders and mortgage brokers have had to configure pricing changes at pace, with rate rises and market movements post-the diastrous "mini" Budget in 2022 causing confusion and delay.
But Finova has developed Optimo to be more flexible, allowing companies to calculate personalised decisions based on an applicant's personal, medical, financial, and property information.
Whenever a customer applies for a mortgage or a loan, the lender must make several rapid decisions about risk, liability, and affordability.Chris Little, FinovaThe tool integrates affordability models, scorecards, and pricing into one seamless decisioning product. As a result, Chris Little, chief revenue officer for Finova, has said this could reduce a product’s speed to market from an average of seven to 10 days to a matter of hours.
While many mortgage products assess affordability based solely on loan-to-value ratios (LTV), Optimo takes a distinctly holistic approach by evaluating affordability on a case-by-case, considering multiple factors.
He said in the past, lenders have faced operational challenges when relying on generic affordability calculations and rate cards to determine suitable rates to offer borrowers.
As a result, brokers have often experienced delays and have seen clients miss out on rates.
According to Little, Optimo aims to remedy this by enabling lenders to evolve their pricing strategy, benefitting from data-driven and risk-based pricing that can service quicker price changes.
He said: "Whenever a customer applies for a mortgage or a loan, the lender must make several rapid decisions about risk, liability, and affordability.
"In the past, lenders have shouldered significant risks when using traditional rate models, and this has sometimes led to financial losses and dissatisfied customers.
"In a fast-moving environment, innovative tech like Optimo is key to ensuring financial institutions can service customers quickly and fairly – and finova is leading the charge.”
Rowan Clayton, product director at Finova, said: "Our hope is that the days of sluggish product launches and ‘one-size-fits-all’ products are over.”
simoney.kyriakou@ft.com
