Getting a mortgage is a notoriously long and complicated process, which, in this day and age, makes it a ripe target for disruption. Indeed, tech firms are already at work. Take technology and lending company Blend, which is partnering with big banks to make the mortgage application process more accessible and consumer-friendly. The San Francisco startup is attempting to reimagine mortgages to increase access and efficiency and decrease sources of pain for customers and banks alike, explained CEO Nima Ghamsari, speaking at Fortune’s Brainstorm Reinvent conference in Chicago on Tuesday. He was joined in the conversation by Wells Fargo’s Mary Mack and Fortune senior writer Jen Wieczner.
Ghamsari explained that the crux of Blend’s partnership with banks is “data instead of documents.” Rather than going back and forth with a bank to provide a slew of documents over a month’s time, customers can now give their bank access to their data digitally to simplify the mortgage-getting process. Using that access with Blend’s artificial intelligence tools, a lot more of the work can be done up front to streamline the experience. Banks can more easily predict obstacles that might arise from holes in the data, for example.
This technology can lower costs of travel and document production for consumers and decrease the amount of time from application to the close of a mortgage by around 25%, said Mack, the Senior Executive Vice President and Head of Community Banking and Consumer Lending at Wells Fargo.
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Wells Fargo rolled out its digital mortgage services with Blend in the first quarter of this fiscal year, and by August, over 27% of applications were digital. Ghamsari attributed a lot of that early adoption to the ease and accessibility that digitization provides to the mortgage application process.
“The biggest demographic to use mobile is not what you would think, not the millennials,” he said. “It’s [people in] the lowest income band, by far. By a factor of three.”
Mack said that the bank’s partnership with Blend is an important part of regaining customers’ trust through transparency after a string of scandals in past years. By using this technology, Mack said, it allows the bank to focus their workers where they’re really needed: educating and demystifying the confusing process of applying for a mortgage.