Jammed home-loan pipeline no match for DAIDEC’s D.Tag
Australian fintech DAIDEC Analytics has good news for the $1.9 trillion home loan market, with its disruptive predictive AI and machine-learning tool poised to unblock the biggest bottleneck in the market, the turnaround times for loan applications to be approved.
Not only does this cost mortgage brokers and lenders – and their borrower customers – time and money, but the glacial pace of loan approvals is also increasingly seen as a contributor to anxiety levels for brokers, who must deal with their clients’ often justifiable frustrations.
After a number of pilot programs, DAIDEC has launched its predictive analytics tool, D.Tag, which improves the home loan application process by giving brokers – who settle 60% of the nation’s home loans – early warning of opportunities to fast-track or improve applications, to give them a better chance of accelerating the approval.
“It takes about 100 tasks to get a home loan approved, and all along the chain, time and cost inefficiencies can occur and be magnified,” says Roger Dench, CEO at DAIDEC. “Each of these pain-points can lead to frustration for the borrower, blow-out the costs for the broker, and delay the approval by the lender. The D.Tag system can help with all of these, by identifying the loans that are contributing most to the bottlenecks and speeding up handling them.”
The home-loan market is hostage to the Pareto principle (or 80:20 rule) says Dench with “our analysis for one client showed 16% of loans taking up 64% of brokers’ time. We are seeing this play out across the board. Brokers are spending most of their time on the wrong loans – but they don’t know which ones are the wrong loans, until it’s too late, and they’re jamming up the system.”
Multiple handling of loan applications – and back-and-forth rebounding between the lender, the broker and the customer, seeking additional information – is the problem. “With D.Tag we’re circumventing all of that by making sure the application is the best it can be before it gets submitted,” Dench says.
The D.Tag is one part of the D.Suite system. It is cloud-based software that plugs into an existing customer relationship management (CRM) system, assesses loan applications and rates each in one of three ways – “accelerate,” which is denoted by green; ‘business-as-usual,’ which is grey; and ‘review and refer,’ which is purple.
“‘Review and refer’ is the true money-earner for our customers, because it very quickly alerts them to the fact that there’s potential problems – which could just indicate that ‘this one is going to take a lot of time, is the right person working on it?’” says Dench. “It doesn’t mean it’s a bad loan and it’s going to be rejected – we do not play in the credit-score space – it’s just a warning to the broker that it’s going to take up a bit more of their time, and probably require specialist experience.
“The D.Tag helps the broker by giving them a forward lens on the quality of application that they have in front of them, and where there might be problems, such that they can, where it’s needed, build a higher-quality application, before the loan is submitted. The system anticipates any approval problems and pre-empts them,” Dench says.
In this way, he says, efficiencies are improved, borrowers are less frustrated, and everyone gets paid quicker, because the job is done efficiently. “At the moment, brokers can’t give their customers any confidence on how long approvals will take to get through, because everyone is being swamped on volume, and brokers can’t possibly know which applications will cause the most problems. We know that D.Tag is vital to helping brokers, for the first time, truly be able to manage customers’ expectations on turnaround time to yes,” says Dench.
The D.Tag analyses all home loan applications. Dench says that in time the system would be exportable into similar jurisdictions that have similar home mortgage products to Australia and is also readily transferable to business loans.
“The pilot programs have clearly demonstrated that D.Tag can add value to a broker’s revenue and profit lines,” he says. “We’re very excited to move out of pilot and into customer implementation phase”.
