The Optimo system will allow lenders to price product changes based on an applicant’s personal, medical, financial and property information. This is done through the use of affordability models, scorecards and pricing instead of just loan to value (LTV) ratios.
Finova said affordability could be evaluated on a case-by-case basis instead by using Optimo.
The firm said this would reduce the time a product is brought to market from an average of seven to 10 days to hours.
Finova said lenders previously used “generic” calculations and rate cards to determine suitable rates. With Optimo, lenders will be able to generate scorecards which could widen options for people previously limited by their financial profile, such as the self-employed.
Finova said this could reduce the number of variant rate cards and mean decisions are made by a customer’s risk instead.
The Optimo system is expected to help lenders react to market changes quickly so products can be accurately repriced within hours.
The firm said lenders could also offer ‘always on’ pricing to lessen the impact of last minute price changes on brokers and their clients.
Revolutionising the process
Chris Little, chief revenue officer at Finova, said: “Whenever a customer applies for a mortgage or a loan, the lender must make several rapid decisions about risk, liability, and affordability. In the past, lenders have shouldered significant risks when using traditional rate models, and this has sometimes led to financial losses and dissatisfied customers.
“Optimo, our new decisioning engine, is designed to revolutionise the process, protecting our lender partners from risk while ensuring borrowers can access the most personalised and fair rates on the market. In a fast-moving environment, innovative tech like Optimo is key to ensuring financial institutions can service customers quickly and fairly – and Finova is leading the charge.”
Rowan Clayton, product director at Finova, added: “At a time when rates are shifting and changing faster than many legacy systems can manage, Optimo offers a seamless SaaS solution that works out of the box and can slot into a lender’s existing originations systems with ease. Built on the foundation of Apprivo2, Optimo powers faster and more tailored decisions.
“Our hope is that the days of sluggish product launches and ‘one-size-fits-all’ products are over and that lenders who integrate Optimo can evolve their offerings with dynamic risk pricing and data-rich affordability models that not only reduce their risk but also enable them to underwrite loans for an even wider range of customers.”
