AI-powered financial technology revolutionising lending

Upon pairing this technology with human nous, explainable AI helps deliver great customer service and meet regulatory obligations while providing a competitive edge.

An example is Up, which has partnered with platform technology company Tiimely (formerly Tic:Toc), to power it’s Home Zone offering which provides superfast conditional approval for would be home buyers.

Tiimely launched in 2017 under the Tic:Toc brand as a business-to-consumer digital lender, offering fast, convenient home loan products. Its approach was such a success, the Tiimely team quickly realised there was value in making its industry-leading platform available to the financial services industry as a whole.

Now, Tiimely is one of Australia’s leading AI enabled platform technology providers, with proven flexible technology solutions that give businesses fast access to new, high-value markets like lending. Tiimely’s customers include two of Australia’s largest banks and ASX100 listed companies, such as Qantas Money Home Loans and NRMA, demonstrating the company’s ability to serve both established industry giants and disruptive start-ups.

Up CEO Xavier Shay says he chose to partner with Tiimely due to its experience developing tech solutions for the financial services sector. Neobank Up was founded in 2018 and has quickly established a reputation as a leader in digital financial services.

“Outsourcing this aspect of our operations frees us up to work on other aspects of the business. Tiimely brings firepower to Up we wouldn’t otherwise have, and allows us to punch above our weight in the home loan market. We are able to keep innovating with Tiimely.”

Shay is impressed with the efficiency, responsibility and seamlessness of Tiimely’s technology, Xapii.

“It’s able to handle the complexities of the home loan journey, which isn’t just about the technology side, Tiimely provides human experience when it matters,” says Shay.

“We were exploring different options and it felt like a big mountain to climb. It’s the sort of product you need to get right and we were a bit nervous about outsourcing this part of our business. But it’s worked really well.

“Tiimely’s experience, focus on customer service and the fact they have automated so much of the process was very attractive to us.”

Up is just one of many banks, fintech companies, consumer brands and mortgage brokers all choosing a combination of AI-powered tech and people to power their back ends.

These businesses recognise shared infrastructure and platforms deliver a cost benefit advantage, and allows them to embed AI-based automation technologies within their existing processes, without the cost and risk of developing these technologies themselves.

The Tiimely platform, Xapii, pronounced “zappy” provides API-first solutions powered by Explainable AI (XAI). In addition to the platform offering, Tiimely has four key modular solutions, Convert, Decide, Fulfil and Inform, which can be utilised across any lending use case including mortgages, auto finance, credit cards and hardship.

Tiimely’s world-class platform and technology is unique in that it operates on a lending by exception principle. In a mortgage lending scenario, when an applicant has completed a loan application, the platform will flag if there have been exceptions to any of the 136 automated business rules that need to be addressed for a standard home loan.

This could be anything from incomplete property data such as the property’s size, to discrepancies in the application’s financial position. Its intelligent machine learning models understand unique patterns in the data to detect abnormal inactivity and inaccuracies such as undisclosed accounts.

“Anything that doesn’t meet the rules can be an exception,” says Baum.

Once staff are made aware of anything the technology could not solve, they have a conversation with the customer about what they need to understand to make a decision about their loan application.

“Home loan applications are assessed in real time and approved within as little as three minutes of human effort. The whole process is auditable and decisions are based on rules about a partners’ risk appetite, taking into account regulatory settings,” Baum says.

A key point of difference is meeting compliance obligations by combining cutting-edge tech with human reasoning. This is because technology with a human in the loop performs better from a responsible lending and risk perspective than traditional, human-orientated processes.

As evidence, Tiimely has settled close to $5 billion of home loans and only had one customer in financial hardship.

“We are better able to assess a customer’s capacity to pay and their true financial position. Plus, the technology allows us to consistently apply rules. It doesn’t forget to do something or miss something,” Baum says.

AI-powered financial services tech also offers financial institutions a productivity uplift. Baum says Tiimely’s analysis indicates its home loan assessment processes enables an 80 per cent increase in assessment efficiency compared to traditional processes, producing more than 5 million automated assessments in the past year while maintaining rigorous compliance standards that can be configured into the platform and are fully auditable.

“We’re democratising scale through that process. It also gives us access to big data pools we can use to enrich, automate and improve our models,” Baum says.

Tiimely’s outsourced model is likely to be widely adopted in Australia, if overseas experience is anything to go by. In the US, 70 per cent of home loans flow through two platforms.

The message for financial services institutions searching for fintech partners is to look for businesses with expertise who remain committed to continual improvements and innovation.

“Developing the technology yourself can be very expensive, so it’s important to find specialists you can work with and trust,” says Shay.

This article first appeared in the Australian Financial Review.