Tic Toc loans in 22 mins

Discussion in 'Loans & Mortgage Brokers' started by ollidrac nosaj, 11th Jul, 2017.

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  1. ollidrac nosaj

    ollidrac nosaj Well-Known Member

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    An Australian fintech startup says it can grant a home loan in 22 minutes.

    An Adelaide fintech switched on its platform today following more than two years of development, claiming it can grant a home loan in just 22 minutes.

    Tic:Toc says it has digitised every decision making step human loan officers go through, enabling the application and approval process to be shrunk down from the traditional 22 days.

    “Other ‘online’ home loan providers digitise only part of the process, so while their application may begin online, it ends in the exact same way every other traditional home loan process does,” said Tic:Toc founder and chief Anthony Baum.

    A company spokesperson said five steps are performed in the background while a potential borrower completes the application:

    1. Property valuation
    2. Assessment of borrowing power
    3. ID check – they verify the customer’s personal ID (e.g. driver’s licence, Medicare card) against government databases
    4. Credit check
    5. Financials validation: after the customer enters their financial information (income, expenses etc.), Tic:Toc uses Yodlee to digitally validate what they’ve told them. The company receives read only copies of their transactions, and can verify (or decline) what the customer has told them about their financial information in minutes. If the customer is uncomfortable providing their banking credentials, they can upload their statements (as they’d provide to a bank or broker) and Tic:Toc’s credit assessors will do the assessment within a business day
    The loan products available at launch have variable comparison rates from 3.69% per annum for owner-occupier, principal and interest agreements. The company said that its catalogue is aimed at borrowers that have at least a 20% deposit or equivalent equity.

    Tic:Toc received $990,000 from the South Australian state government, plus an undisclosed amount of investment from Bendigo and Adelaide Bank alongside private investment. The bank is also underwriting the loans and Baum himself is a former treasurer at Adelaide Bank.

    Bendigo and Adelaide Bank CEO Mike Hirst said that the platform is a world-first.

    “There’s been a lot of hype about digital progress in finance, but we haven’t seen it to this extent in home loans,” he said.

    “We believe it’s important for customers to have choice when it comes to how to interact with a financial institution, and we believe Tic:Toc offers an appealing alternative for eligible home buyers.


    Read more at An Australian fintech startup says it can grant a home loan in 22 minutes
     
  2. Redom

    Redom Mortgage Broker Business Plus Member

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    Thats awesome - not sure that its possible that fast in todays day and age just yet, pretty sure the regulator would kick and scream about it. Having auto loan approvals has caused problems in the past (ask Westpac!) about the verification of documents. It is a step in the right direction though (an extreme step in this case!)

    But getting things done quicker and moving into 2017 is a good idea and something lenders should aim to do IMO. Some things in the finance industry are still working at dinosaurs pace and not really harnessing the power of technology as much as possible.
     
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  3. ollidrac nosaj

    ollidrac nosaj Well-Known Member

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  4. ollidrac nosaj

    ollidrac nosaj Well-Known Member

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  5. DowntownBlock

    DowntownBlock Well-Known Member

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    Exciting news, wonder how the mortgage broking industry will adapt in response.
     
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  6. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    That's great - I'm looking forward to no docs for applications when the government and our aggregators catch up.

    Some of the broking industry will struggle to compete with this - but another segment won't. The transactional brokers who service the people with one property will find it hard I think, especially as this becomes more common, but those who provide an advice based service will be fine - it's a different target market.
     
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  7. Lacrim

    Lacrim Well-Known Member

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    I bet only the blue sky run of the mill loan applications get past the hurdles. Anything a bit left field and the "computer says no".
     
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  8. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    Yep - not only vanilla borrowers, but also vanilla securities I imagine.
     
  9. ollidrac nosaj

    ollidrac nosaj Well-Known Member

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  10. larrylarry

    larrylarry Well-Known Member

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  11. ollidrac nosaj

    ollidrac nosaj Well-Known Member

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    Possibly, but i would assume he would be obligated to disclose that during interview?
     
  12. Corey Batt

    Corey Batt Well-Known Member

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    I've already seen examples of the system failing - it's definitely cherry picking the deals which are very easy to pick. I'd be interested to see how they're actually verifying details with an actual person otherwise they will be smacked down by the regulator very quickly.

    In reality from what I will guess the system will auto approve likely if you only have:
    • single PPOR debt, low LVR
    • Simple PAYG income with salary credits which can clearly be linked into your transaction account
    • You give them your banking login details (yes they do ask for this to try verify your income etc)
    That way it can scrape all the info from your banking it may be able to verify enough - but it's pretty dodgy to rely just on computer verification of salary credits as that's exceptionally easy to manipulate. Otherwise they may be offering 'formal approvals' and then checking before settlement of the debt that the system did what its meant to.
     
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  13. ollidrac nosaj

    ollidrac nosaj Well-Known Member

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    My understanding is ASIC have given it the once over and a thumbs up.
     
  14. Corey Batt

    Corey Batt Well-Known Member

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    Do you know where you read that - find this one pretty interesting.
     
  15. DaveM

    DaveM Well-Known Member

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    I think if I tried to enter my lending situation into their system, it would run out of compute power and blackout the state again
     
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  16. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    If it's fully automated, then why do they need to hire more staff?

    Overall I think this sort of innovation is great. We're always looking for greater efficiencies and this will filter through to all sectors of the market. It's not possible however to fully approve a loan without human intervention at some level. If nothing else, at some point a human needs to look at the borrower and compare their fact to their ID. This can be streamlined, but it can't be fully automated.
     
  17. ollidrac nosaj

    ollidrac nosaj Well-Known Member

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  18. rksing

    rksing Well-Known Member

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    So i was bored and had a play on their website. Started an application and the first things you have to enter are if your looking to invest or ppor, the property address and how much you think its worth and how much you want to borrow.
    Entered some of my apartments and basically got the same message saying they cant lend against it. I.e. no apartments i guess.
    Then i entered one of my elizabeth properties with an outrageous valuation of 350k and asked to borrow 280k and it said all good.....
     
  19. datto

    datto Well-Known Member

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    Does it do cash out?

    I'd like a $2m loan in 22 minutes.

    Nimble it and move on lol.
     
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  20. God_of_money

    God_of_money Well-Known Member

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