In yet another technology collaboration between a top 10 US bank and a FinTech firm, TD Bank has made convenience a part of operations and “ordered-in”. That is, the Bank has sourced an end-to-end digital lending platform from a third party for mobile phone users for their mobile lending application called TD Fit Loan. According to the TD Bank press statement, “Select TD Bank customers can apply for unsecured installment loans up to $35,000 online or through their mobile device. Approved customers can receive funds as soon as the next day”.
TD Bank bills itself as “America’s Most Convenient Bank”. That billing has been attributable to the bank’s access both with physical branches and ATMs in the neighborhoods they service as well as an online presence. TD Bank is one of the top 10 largest banks in America, so being America’s most convenient bank is a tall order to fill day-in and day-out while touching all the bases on internal policies and delivering a frictionless customer experience. TD Bank has tapped a proven technology vendor to ensure convenience remains a cornerstone of their customer experience.
Frictionless deposit accounts, checking, ATMs and online banking are expected by today’s mobile consumers; and all of that should be seamless in mobile and digital format. It’s another thing to deliver a mobile experience for consumer borrowing that delivers the internal policy suite of the bank and remains seamless to the customer. That’s where Chicago-based Amount comes in.
Amount is a Chicago-based Fintech firm that specializes in end-to-end digital platform design for financial institutions. Amount has customized their end-to-end mobile lending platform to meet the internal policy requirements of TD Bank. But that’s only a part of it. Automating the consumer lending process is quite a leap of faith and no small task.
“Amount has dedicated significant resources to working with TD and our other bank partners to help them harness the real-time data that the Amount platform captures on all aspects of the customer journey - from application data, marketing, credit policy, and identity, income and banking verification journeys - to provide a great customer experience and optimize the bank's funnel while helping ensure it operates within its risk appetite”, said James Paris, Amount’s Chief Strategy Officer.
There is an awful lot of data that needs to be processed in an individual loan request, including underwriting and decisioning, account verification, fraud prevention and credit verification. The Amount platform has a bit of pedigree in this area. According to Paris, the platform has been in use by Amount’s “sister” company, Avant, LLC. Avant is privately-owned consumer lending firm which says it has processed $1.8 Billion in loans to over 600,000 customers since 2012.
Amount would not give specific details on the fidelity of the underwriting quality on the lending accounts sourced on the platform, such as default rates, delinquencies, etc. However, Paris stressed that the platform is programmed with TD Banks decisioning policies and risk parameters. Since the launch of TD Fit Loan in September of 2018, the company says approximately 5,000 decisions have been rendered through the platform.
One of the key performance indicators of the mobile loan process is the abandonment rate of the customer journey. When customers encounter difficulty or apprehension in the process, they will abandon the loan request process. This is what is meant by application “friction” and it is a major user experience challenge for any online application and especially applicable to a stressful experience such as applying for a loan.
“Amount's flexible technology allowed TD to make quick early modifications to certain underlying policies that removed friction from the customer experience and allowed TD to dramatically improve both customer response and approval rates without seeing any decline in consumer credit scores”, explained James Paris.
“Dialing-in” convenience for powerful, ready-to-use technology has been a boon for banking services as FinTech companies have reached a new plateau of reliability and performance. What once was the domain of “nice-to-have” technology has now become integral to growth and revenue for banks. It will be interesting to see how these relationships evolve and whether the banks or the Fintech will the hunter or the prey when the M&A and consolidation phase begins.