Of all the paper-related journeys of financial life, punctuated by reams of paper and teams of middlemen, buying a home stands out.
Titles, legal agreements, bank forms, deeds, appraisals, wet signatures, faxes, emails, agents, lawyers – the list goes on. According to Bankrate.com, the whole process takes an average of 47 days.
If ever an analog company were to be dragged into the digital economy, it is buying a house. Marc Greenberg, finance manager of the digital lending platform To mix together, agreed the industry is ripe for a digital reshuffle as he spoke with PYMNTS CEO Karen Webster.
The conversation took place when Blend announced earlier this week the acquisition of Title365, a provider of title and insurance settlement services, for $ 422 million. The deal will streamline the home buying process and add efficiency and transparency to the financial services ecosystem as the platform expands to a range of day-to-day financial activities.
Physical house closures can be arduous, involving hours at the real estate office, bank, etc. There is no shortage of cooks in the kitchen, so to speak. As Greenberg noted, any of them could upset or even bypass the home buying experience.
“If the banks make it very easy and a fully integrated experience, we think in the long run they will capture more business,” Greenberg said.
Prepare for the digital shift in the form of a marathon, not a sprint. As Greenberg said, “the pandemic in many ways has accelerated the digital transformation which we believe could take much longer.”
This transformation includes removing at least some of the “wet signatures” that are part of the hoops and obstacles to getting from the initial stages of an offer to closing the deal on a cute little Victorian, for example.
Integrating title insurance and settlement services on Blend’s digital lending platform will automate a range of functions that have typically been tied to manual, paper-intensive processes, Greenberg said. Blend itself launched with a digital home insurance offering in 2018 and expanded to offer a digital fence solution last year, known as Blend Close.
The combined offerings allow Blend’s financial institution (FI) clients to process more than $ 4 billion in mortgages and consumer loans daily.
“There is still a long way to go,” Greenberg noted. “Title365 brings all of this expertise and operational capability so that we can transform these processes over time and then integrate them into customer banking services. “
For the consumer, he said, Blend’s goal is to bring every financial experience to the intuitive level that is the trademark of Netflix or Amazon. Greenberg told Webster that the Title365 deal will be concluded within the next few months after the satisfactory completion of the regulatory review.
With a nod to the high-level push to buy Title365, said Greenberg, “we felt like we could really develop our strategy if we could integrate all the different elements of the buying journey of a. house in one unified platform. “
Struggling with separate silos
Banks shouldn’t have separate tech stacks for different services related to mortgages, auto loans or deposit accounts, he said. A unified platform also offers the benefit of having a unified point of entry for consumers, bringing those consumers through an end-to-end digital journey.
Currently, banks have internal operations marked by separate loan origination systems and separate business units, he said. Some of them were created decades ago; some were created fairly recently. This is not a way for a bank to operate on a large scale.
“Why should the consumer ‘come in’ to take care of all these other things the bank doesn’t offer in order to do what they had to do to close their loans? He asked, adding that “there are a lot of disparate technologies. There are a lot of possibilities for efficiency.
The urgency is there for banks to offer these services – far beyond the limits of buying a home – to keep customer relationships sticky. Greenberg argued that traditional FIs need to move towards digitally-driven strategies to reclaim market share from technologically agile newbies. They need to improve their cross-sell success in a way that is consumer-friendly and meets the individual they are in, whether in a branch or online, via chat or mobile.
Prepare to take the plunge
Banks have already shown themselves to be fit for the leap, having stepped up the pace of their investments and digital initiatives as they grapple with the pandemic.
The past year has shown just how much an external event like the pandemic, coupled with a drastic shift to digital channels, can boost an industry’s fortunes, Greenberg said. Over the past year, he told Webster, “we’ve seen tons of year-over-year growth on refinancing.” More recently, growth has balanced a little more towards new purchases and refinancing, towards the movement towards suburban housing rather than towards the big cities.
In the meantime, he said, Blend continues to build its energy behind the consumer financial journey (including personal loans), home buying efforts related to property, property and casualty insurance and real estate titles. .
“We are building a platform through which we can provide a market for other opportunities,” he said, naming activities such as relocation / relocation and even switching utilities and cable companies to the as these moves occur. In short, Blend’s opportunities lie in reducing the number and extent of interactions consumers have to make with intermediaries – via a digital gateway that leads directly to an ecosystem that Blend brings together and encompasses FIs. , FinTechs, mortgage banks, home builders and others.
“We will maintain these connections for you,” he said of Blend’s relationship with these companies and their consumers. “We’re going to build the other pieces of the puzzle and make sure that you get the right and the best service providers at the right time and at the right time so that you can close that loan or close this deal, or open that deposit account on. as quickly and efficiently as possible.
The partnership model is particularly useful for smaller banks that lack the financial resources that their traditional IF big brothers might have on the books. Regardless of the size of the FI, they need help collecting information from consumers and minimizing the paper trail. There are also opportunities to simplify the documentation itself, make education part of the process, and make those dense disclosures in English readable.
“We know it takes a long time to convince banks to change their technology,” he said of the home buying journey, which opens up more opportunities for FIs.
“We’re really focused on the long term,” he told Webster. “We know it’s a long game.”