EMBARGO: 11.59pm, 12 July 2021: Australia’s first neobank Volt has acquired neo-lender Australian Mortgage, allowing it to offer fully verified approval times of less than 15 minutes on its new digital mortgage product.
This is a material improvement compared to many larger lenders where it is common for unconditional approvals to take well over two weeks, particularly for customers introduced by brokers.
Australian Mortgage’s “Intelligent Credit” solution will form a key part of Volt’s banking-as-a-service (BaaS) offering, and help to solve the infuriatingly slow turnaround time for the ~60 per cent of Australian mortgages being originated through brokers.
It will also help mortgage brokers increase their conversion rates and improve customer experience through speedy verified approvals, demonstrating the power of digital technology and data analytics to provide better customer outcomes.
The new digital mortgage solution will be distributed through Australian Financial Group (AFG) with a pilot commencing in the last quarter of 2021, before being made available to all of AFG’s ~2,795 brokers in early 2022.
Volt recently announced a strategic alliance with AFG, allowing AFG to leverage Volt’s BaaS platform. The alliance includes a $15 million equity investment in Volt by AFG.
Australian Mortgage’s offering has received exceptional feedback from existing distribution partners including Mortgage Choice and Shore Financial; arrangements that will continue under Volt’s ownership.
The acquisition of Australian Mortgage and the strategic alliance with AFG provides Volt with a unique combination of ingredients to bring much-needed competition to the Australian banking market: the latest technology and data analytics capability, access to Volt’s deposit funding, and the ability to leverage broker distribution at scale.
Andrew Clouston, Volt Chief Customer and Partnerships Officer, said: “Many lenders are simply digitising pre-existing document-based processes and, as a result, the time to unconditional approval for mortgages has not significantly improved.
“Australian Mortgage and Volt have instead rebuilt the entire process and created a genuinely data-driven solution that offers real efficiency for brokers. This allows them to focus on the personalised customer service that underpins the important role mortgage brokers play in every Australian's home ownership aspirations.
“Bringing in a lending component to our BaaS platform completes our transition from a fintech start-up to a full-service challenger bank with a multi-channel revenue capability, purpose-built to rapidly scale lending volume.”
Kym Dalton, Australian Mortgage Managing Director, said: “We are excited to be partnering with Australia’s first neobank to deliver our market-leading mortgage processing capability, which is already in use supporting Mortgage Choice’s innovative ‘Propel’ product. We’re also looking forward to extending the offering to other loan introducers, such as AFG’s mortgage brokers.
“On top of this, we hope to create more clarity around what “approval time” actually means. Some banks measure their turnaround time by the time it takes to pick up an application or to get to conditional approval, instead of the time it takes to provide an approval that the borrower can genuinely rely upon, which is what really matters to the borrower.”
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Volt was Australia’s first neobank, obtaining an unrestricted Authorised Deposit-Taking Institution (ADI) licence in 2019. Volt employs a highly differentiated banking-as-a-service (BaaS) platform strategy, which enables Volt’s partners to enhance their customer relationships by offering banking products and solutions within their own ecosystems.
Volt is currently the only independently owned retail neobank with an unrestricted ADI licence in Australia. It is chaired by Graham Bradley AM, the former Chair of HSBC Australia and one of the most experienced and respected ASX directors in the region. It remains true to its mission to demonstrate that banking can be done in a better way, through initiatives such as its ‘no catches’ Volt Save deposit account.
Deposits with Volt of up to $250,000 per account holder are covered by the Government’s financial claims scheme.
About Australian Mortgage
A neo-lender for the new era of digital banking, Australian Mortgage provides digital, customer-centric home loan solutions to the mortgage industry in Australia.
Australian Mortgage was founded in 2017 by a team of accomplished executives from the mortgage, technology and capital markets industries. Australian Mortgage has re-thought the entire home loan application process by enabling rapid verified approvals, - providing certainty and confidence to the Australian 3rd Party distribution market and their customers