The firm, Roostify, is already active in the US mortgage market processing around $20bn of loans a month working with HSBC, Chase and TD Bank among others.
As part of the Santander InnoVentures investment, it has entered into a global agreement with the lender and is working on expansion into the UK and other markets across Europe.
Roostify co-founder and CEO Rajesh Bhat told Mortgage Solutions the firm was also working with other lenders to launch into the UK market and anticipates growing its presence in the first half of next year.
He explained that the software could be used from many situations, including through broker channels, but one of the most likely was when sourcing new customers through aggregators and that this was of particular interest in the UK.
“Given the rate environment, banks have looked at their existing customer acquisition funnel and concluded they’ve extracted as much cost that they can out of it as possible,” he said.
“So they are considering changing the way they acquire consumers to be able to give themselves a competitive advantage and reduce the cost.
“That’s where it gets really interesting, as a lot of what we’re doing is enabling firms to re-imagine how they acquire consumers digitally and be there when consumers are expressing intent, as opposed to looking to draw the consumer to where they are.
“That changes really how they go to market in certain respects,” he added.
The system connects with third party providers when necessary to enable elements such as income or identification verification and to use Open Banking-based sources.
Lenders can use the system to create multiple versions which connect to different pathways, such as from aggregators or brokers.
And brokers can also use the system themselves if they wish, allowing it to feed straight into lenders at the appropriate point in the mortgage journey.
Banks and aggregators
Bhat noted that it was a very interesting time in the UK market at present with aggregators attempting to leverage their consumer engagement, while banks were attempting to use their own brand identity with consumers.
“We work with the lending and real estate aggregators to provide that experience for our customers who are advertising on these sites,” he continued.
“A consumer comes on [to the aggregator] and they provide some information and we provide the ability to click through [to the lender].”
He noted that consumers were willing to give up more information in these sources and increasingly willing to complete transactions online, not just do window shopping.
“That’s a very powerful capability to have for banking in general and it’s something consumers experience in other walks of digital life today in a lot less complex sectors,” Bhat said.
“It takes time and obviously it’s an important transaction for the consumer and bank, but this is why we think a digital end-to-end platform to allow consumers and lenders to engage from beginning to end is so important.”
Bhat also added that the fact borrowers were remortgaging more frequently in the UK and the customer relationship was less prolonged than in the US created the need for a different user experience, though the process itself was similar.
Santander told Mortgage Solutions it had been developing “ambitious projects” with Roostify since its first investment in January 2018 and there would be “news soon” about what these would be.
Manuel Silva Martínez, partner and head of Investments at Santander InnoVentures said: “Working hand in hand with the company has allowed us to deepen the knowledge we had about it before our first investment and certify the great quality of the management team, excellent commercial references and possibilities offered by the company’s technology, both in the development of new products and in the versatility to address new markets with different regulations and habits.
“This potential has encouraged us to lead this expansion round and invest more capital in the company in order to help them conquer new markets and expand their catalogue of products and use cases.”