TheMReport

24 | TH E M R EP O RT FEATURE trends within mortgage lending is using such data to confirm a consumer's income and assets. This digitization of the verifica- tion process delivers significant dividends to those who have fully embraced the process. It's fast, simple, and more accurate. Better yet, it also frees up the time and resources needed to build both customer relationships and business. No more need to spend hours tracking down a potential borrower's assets or dedicate a significant portion of a budget to verifying borrower income. While income and asset verification is a major procedural shift, it's just the start of how consumer-permissioned data will transform mortgage lending. From pre-qualification to servicing to final payment, consumer-permis - sioned data will be used across the life of a loan, thereby ushering in a more efficient and inclusive lending process than ever before. Benefits All Around C onsumer empowerment can prove profitable in more ways than one. In the U.K., for example, Experian identified nearly six mil- lion credit-invisible consumers. The good news? That number has since dropped by 765,000 due to the con- sideration of data from utility com- panies and social housing tenants. In the U.S., consumer-permissioned data is beginning to help paint a clearer picture of a consumer's abil- ity to manage a loan. Given how difficult it is to make big-ticket purchases without the help of a loan, consumer-per- missioned data has the potential to open up a whole new world of opportunities for borrowers that were previously on the outside looking in. Rather than forgoing the purchase of a house or car, consumers who are empowered to share more than just their credit score can move one step closer to achieving the American Dream. Beyond being the right thing to do, the use of consumer-permis - sioned data access also opens the door for more lending opportuni- ties. It brings in extra business by using additional data points to inform lending decisions. The more data referenced throughout the credit decisioning process, the more prepared lenders are to determine a consumer's qualifica - tions for a loan and potentially uncover loan candidates who pre- viously slipped under the radar. According to research from Accenture, bringing previously ex- cluded consumers into the formal banking sector could create $380 billion in new revenue for banks. Giving consumers the power to share any and all data they be - lieve is relevant to financial fitness provides greater insight into a po- tential borrower's financial health. All of this furthers the ability to employ safe lending practices. The New Normal A ccording to a 2018 "Pulse of Fintech" report from KMPG, more than $12.5 billion has been invested in online lending over the past four years. Not only will such investments heavily influence digital innovation moving forward, but they're also poised to disrupt the lending industry as a whole. According to research from Fannie Mae, most lenders feel the mort - gage industry is twice as competi- tive as it was 12 months ago. This steady increase in com- petition is just one sign of an evolving lending industry. Even with the emergence of new lend- ing criteria or absence of available capital, lenders aren't typically re- quired to vie with one another for every last customer. The simplifi- cation of the mortgage origination process, however, is poised to serve as a source of competition for consumers and lenders. It's time to embrace a digitized lending industry where shorter origination times and stream - lined mortgage processes are the norms. This movement toward greater convenience has been seen across virtually every industry over the past few decades. Take Blockbuster and Netflix, for example. Unable to provide a service that matched the flexibil - ity of Netflix's digital streaming, Blockbuster was ultimately driven out of business. Similarly, eBay and Craigslist combined to render classified ads in major newspapers all but useless. Instead of picking up physical copies of a newspaper, consumers gravitated toward a digitally driven method of creat - ing and viewing classified ads. The list goes on with Blackberry, Motorola, and Nokia, each of which saw a significant drop in market share following Apple's launch of the iPhone, not to men - tion a digitized business model. All in all, business is done digi- tally now more than ever, and the rise in digital mortgage origination does not appear to be a fluke. As more lenders look to complete the origination process, with more efficient digital processes, the per - centage of digital mortgages will continue to skyrocket. When it comes to competing in the era of digital lending, com - mitment is crucial. Jump head first into the digital deep end by making consumer-permissioned data an important part of your digital ambitions. The sooner you empower consumers to permis - sion use of their financial data, the easier it will be to adapt to an increasingly digital, inclusive, and simplified lending industry. STEVE SMITH is the Chairman, CEO and Co-Founder of Finicity, a leading financial data access and insights platform enabling data-driven insights that lead to smarter financial decisions. Through the Finicity API, financial institutions and fintech developers can access customer-permis - sioned financial data to incorporate in financial management, payment, and credit decisioning solutions. Smith's passion and experience is in developing innovative and disruptive technologies, products, and services that lead to market efficiency and, ultimately, improve consumers' lives. Beyond being the right thing to do, the use of consumer- permissioned data access also opens the door for more lending opportunities. It brings in extra business by using additional data points to inform lending decisions.

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