Volt Bank has acquired fintech mortgage manager Australian Mortgage – formerly known as Australian Mortgage Marketplace – as it looks to roll out its digital mortgage offering.
The neobank has announced that it has completed its first acquisition, acquiring 100 per cent of neo-lender Australian Mortgage (AM) and its “Intelligent Credit” solution.
The deal, which settled on Sunday (11 July) for an undisclosed sum, will see Australian Mortgage’s technology power the lending component of Volt Bank’s banking-as-a-service platform and deliver the challenger bank with “a multi-channel revenue capability, purpose-built to rapidly scale lending volume”.
Australian Mortgage will continue to operate its existing digital mortgage arrangements with Shore Financial and Mortgage Choice, and continue to operate under its own brand.
The digital mortgage solution will soon be distributed through Australian Finance Group (AFG), as part of Volt’s new alliance with the group, with AFG brokers piloting the product “in the last quarter of 2021”, before being made available to all of AFG’s brokers in early 2022.
Australian Mortgage’s proprietary technology provides “instantaneous credit decisioning”, reaching “fully verified approvals” in less than 15 minutes, the lender told Mortgage Business.
The credit engine reaches a verified approval after the system approves: the property; borrower identity; borrower income; expenses; and creditworthiness.
Volt Bank added that Australian Mortgage’s Intelligent Credit solution will form a key part of Volt’s banking-as-a-service (BaaS) offering, and help speed up turnarounds for brokers, which are currently experiencing long delays at traditional lenders.
It added that the “speedy verified approvals” would also help mortgage brokers increase their conversion rates and improve customer experience, which it said demonstrated the power of digital technology and data analytics to provide better customer outcomes.
Andrew Clouston, Volt’s 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’s managing director, agreed, stating: “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.”
While the AM acquisition is the first full purchase that Volt has made, it has already partnered with several platforms and technology firms as it ramps up operations and extends its banking-as-a-service offering.
Earlier this year, it partnered with fintech platform Railsbank to enable the UK-based tech company to offer Volt’s products to businesses using its platform; it partnered with university marketplace QPay, giving the neobank access to 400,000 students; and entered into a strategic alliance with aggregator Australian Finance Group (AFG).
It is expected that a Volt-branded mortgage product will be released to market alongside Volt-branded bank accounts in the second quarter of 2022.