DirectID began working with Target B at the beginning of 2020 to provide Open Banking solutions for their new Mortgage Hub. Here, DirectID speaks to Product Strategist, Gareth Brady, on his search for an Open Banking provider, why Target B selected DirectID as a partner, and the benefits of the strategic partnership to brokers, lenders and customers, in the mortgage sector.  

Who are Target B?

In 2019 two Tech Mahindra companies, Target Group and The BIO Agency came together to create the Target B business, focusing on revolutionising traditional banking services such as mortgages and savings. This collaboration brought together deep domain experience in complex BPO financial services administration, and leading digital design credentials respectively.

“These two companies came together because they saw a fundamental gap in the financial services world. With the recent explosion of FinTech, there is huge impetus in the banking space to enable slick and modern customer experiences. Target B was created by business process transformation company, Target Group, to revolutionise traditional banking services such as mortgages and savings.

“We asked the question, how do you reimagine and redefine a key pillar of finance and what that looks like? How do we use the 21st century tools, understanding, and knowledge, in a way that works for customers and for a lender?

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What are some of the challenges that The Mortgage Hub product solves?

The introductory product from Target B, ’The Mortgage Hub’, is the first digital mortgage platform in a generation to be designed from the ground up, and the first to be genuinely built around customer experience.

“The key problem across the mortgage sector is that customers really struggle with the process. Both brokers and lenders are dealing with lengthy form filling, and over-administration.

“Another problem is the sheer amount of processes and, by extension, the amount of third parties that have to get involved in every transaction. From the very start you have the customers [buyers and sellers], the estate agent, the valuation of a property, the lender, and the broker – there are just so many parts. We are bringing all these together into one seamless, user-friendly interface that customers, brokers and lenders can interact with.”

 

Why is using an Open Banking solution beneficial?

The aim of The Mortgage Hub is to transform the mortgage journey from a utility to an experience. Open Banking allows the broker and the lender to focus on the context and individuality of every customer, while improving their experience throughout the whole journey.

 

“That is the core of everything we are trying to do. We want to design the perfect user journey for every user [customer, broker, and lender] and then develop the technology to enable that.

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How does the partnership with DirectID impact the lenders that use The Mortgage Hub?

In working with DirectID, Target B have delivered a product that improves the overall experience for all parties involved in the mortgage process. Replacing traditional processes with sophisticated, data-driven methods, reduces the reliance on outdated and inefficient practices that currently plague the mortgage journey.

“Lenders must fulfil both their internal and external policy around affordability and credit worthiness. Therefore, they put a lot of work into understanding the credit profiles of their applicants. Traditionally this has been done by calling out to Credit Reference Agencies to understand how much they have borrowed and how good their credit score is. This is usually supplemented by 3 months of PDF statements that an underwriter must depict, line by line, to make a judgement call.

“In working with DirectID, we can give the underwriter a much more detailed and understandable view of a customer’s financial profile. Currently, it takes a lot of time and effort for the underwriter to ensure that they have made the right decision. Open Banking allows them to rapidly speed up the data collating and analysis process. The insights from the data then gives them a lot more confidence in the process of underwriting.”

 

How does the partnership with DirectID impact the customers that use The Mortgage Hub?

From a customer perspective, The Mortgage Hub is all about giving people more power over their mortgage. The cutting edge UX is underpinned by Open Banking capabilities, providing customers with a seamless end-to-end journey.

“One of the key areas where we can help the customer is in implementing Open Banking at the Decision in Principle (DIP) stage – before it even gets to the underwriter. We can give customers a realistic view of how much we can lend to them, and this greatly improves the relationship at the early stages of the journey.

“Beyond that, if a customer wants to progress at that point, the whole application process is accelerated, even with the strict due diligence an underwriter must do. Ultimately this means a faster turn around and better experience for customers.”

 

How did you find out about DirectID?

“We knew Open Banking was the technology that would allow us to deliver what we had designed. We started looking at different providers to understand who had the capabilities to enable this.

“After speaking to multiple suppliers, DirectID hit that nail on the head.

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The future

“Although it is a slow starter, I think Open Banking is going to change everything in the mortgage sector.  People are starting to use data in a way that was never previously considered. As Open Banking turns to Open Finance, the utilisation of data is going to set institutions apart.

“If we can start using data in big credit decisions, not just mortgages, it means we can start to move away from a world of processes built on top of processes. We can then begin to navigate a much more dynamic world where data is king, and APIs talk to each other.

“It is a long journey and we are not there yet. If we start on mortgages and get early adoption from financial institutions willing to try it out, the benefits will then show themselves over time. It will be a snowball effect from there onwards. That’s what DirectID and Target B are going to achieve.”

- Gareth Brady, TargetB

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