With the help of a centralized citizens’ database, it made mortgage loans applications contactless and approvable within 60 minutes.
Years ago, digitalization allowed a multinational bank in to allow customers in Singapore to open a new bank account and use it instantly. Now, that same momentum has allowed it to offer mortgage loans that can be approved within 60 minutes in the country.
The solution is claimed to be an industry-first digital end-to-end loan application and acceptance journey that leverages automation and straight-through processing on mortgages originated online.
Prior to the implementation, the status quo was that all new home loan applications were manually keyed into the bank’s mortgage origination system. Once approved, a letter of offer was generated for the customer’s signature. All this was time-consuming for the customer, and the process created friction for OCBC.
Tapping into national MyInfo data
To improve the mortgage processing, the bank took advantage of a powerful infrastructure already present in the country: MyInfo, the one-stop data platform that stores a centralized repository of citizens’ basic data.
Once the various data required for the application—evidence of employment, income, financial assets, property details and repayment records—are collected, the bank’s proprietary eKYC (Electronic Know Your Customer) system could automate policy decisions and submit the outcome for a manual review by staff.
The integration of MyInfo into the process meant that customer details were pre-populated and mapped to the correct fields in the bank’s mortgage origination system. It also meant that bank was not required to obtain physical documents to verify a customer’s identity or to separately obtain a photograph. At this point, eKYC is essentially performed—but OCBC’s own proprietary real-time digital KYC ensures total compliance with its own system and standards.
Using APIs for speed
Decisions about loan size are calculated by looking at numerous factors, such as the regulatory total debt servicing ratio (TDSR) and loan to value ratio (LTV). Income is verified against tax returns lodged with Singapore’s tax authority as the returns are also integrated into MyInfo; and property valuations are determined using API links to third-party valuers.
Once all the calculations are made by an analytic decisioning solution from FICO, the application is passed to a direct acquisition officer to review and complete the case. This is to ensure data, valuations and pricing all look in order before a PDF letter of offer is sent for the customer’s digital acceptance within 60 minutes.
Lending as usual despite lockdown
This accelerated approval system was fully deployed in May last year in the middle of Singapore’s ‘Circuit Breaker’ period wherein face-to-face meetings could not take place for typical mortgage applications to take place. During this lockdown period, S$700m loans were applied for, enabling OCBC to maintain strong business momentum. For the year as a whole, 30% of loans had been applied for using this accelerated platform.
Said Dinesh Suresh, Head of Digital Strategy, Consumer Secured Lending, OCBC Bank: “Central to this (platform) was a decisioning system that could draw all the threads of the loan application together and weave it into the fabric of an online ‘self-service’ application channel,” in reference to the use of digitalized processes and centralized data that made the project possible.
According to Nikhil Behl, Chief Marketing Officer, FICO: “Transforming this experience into something faster and simpler shows that OCBC identified an opportunity to change the customer journey for the better.”
For this achievement, FICO has announced that it was recognizing the bank with the 2021 FICO Decisions Award for customer onboarding and management.