Digital lending software provider Blend (NYSE:BLND) notes that the way people work — and earn money — is quite different than it was in the past. However, income verification solutions haven’t been able to catch up with the latest developments, the Fintech firm claims.
As noted by Blend in a blog post, FICO scores and W-2s are no longer able to provide a complete picture of a consumer’s ability to “repay a loan, and [their] reliance on them has left many consumers with non-traditional income sources behind.”
The team at Blend adds:
“True to our mission, we’re excited to take another step toward increasing access to the world’s financial services. Today we’re announcing Blend Income Verification, a comprehensive digital income and employment verification solution that is designed to work across the full suite of products available on Blend’s Cloud banking platform.”
Blend’s management also mentioned that they are helping financial leaders modernize their income verification strategy so they can “feel confident saying ‘yes’ to more people.”
More than 25 customers, including American Federal Mortgage, IBC Mortgage, Lennar Mortgage, and a top five U.S. bank have now “signed on for the product,” the Fintech company reveals.
The Fintech firm adds that existing digital solutions for income verification are “fragmented.” According to Blend, there isn’t a single, straightforward solution that can “address all forms of employment.”
Blend further notes that data is increasingly available, and financial services providers want to “leverage it to improve verification.” In order to connect these disparate data sources, lenders must “devote considerable energy to industry scouting, diligence, contracting, and development if they want to build their own solution,” the Fintech firm explains.
As mentioned in the blog post:
“One of the reasons lenders try to cobble together these solutions is to account for how vastly different employment looks today than it did even a decade ago. With the rise in consumers seeking to use non-traditional credit sources, it is now imperative for lenders to be able to access additional types of data to create a more complete consumer profile. Plus, having the ability to utilize the existing information a lender has about a consumer, including bank transaction data, will allow them to increase coverage.”
Not only are existing income verification solutions not complete, they’re also not well-integrated into the application flow, the update noted while adding that configuring solutions for several different workflows that use different back-end systems can be “overwhelming and time-consuming.”
Blend recommends adopting a platform that has income verification integrated into application flows across products as it helps with lessening this headache. It also enables lenders to “proactively and organically recommend the right product or offer by using real-time data insights,” the company explains.
This enables financial services firms to “make better-informed lending decisions more efficiently, serve more customers, and ultimately offer products that meet or exceed consumers’ needs and expectations,” the company wrote in a blog post.
The power of Blend Income Verification
The team at Blend says they’re pleased to confirm that Blend Income Verification will be able to offer instant verification “across the full range of products available on our cloud banking platform.” They think of it as the “easy button” for income verification.
Minimize delays, maximize efficiency
As noted by Blend:
“To maximize coverage with a single, aggregated solution, Blend Income Verification will leverage leading income data providers and verification strategies, including direct-from-source payroll and, later on, tax and asset-derived data. We plan to support the various methods of verification you may need, including manual pulls in cases where there isn’t digital coverage.”
By bringing together and unifying data providers, Blend aims to reduce costs for lenders and provide them a complete picture of borrowers in “an instant, without relying on time-consuming, manual processes.”
“We will work to continually evolve our solution to include new data providers so that lenders don’t have to manage separate contracts. Blend Income Verification will reimagine — and reduce — the work loan teams do to verify income.”
As noted in the announcement, Blend Income Verification will be “integrated into the Blend experience through a streamlined consumer workflow.”
A recommended verification path will “populate based on a consumer’s unique financial situation, then they can validate that their data is correct before moving on in the application process,” the company explained.
Since this enhanced experience will be available to consumers across a lender’s portfolio of products, consumers will be able “to enjoy consistently excellent — and potentially lower cost — journeys for the breadth of their financial needs.”
The announcement also mentioned that Andrew McElroy, SVP at American Federal Mortgage, stated:
“Our goal is to reduce friction in the application process by minimizing the number of borrowers who need to upload documents. Blend enables us to expand our coverage of instant income verification, contributing to a seamless borrower experience.”
To learn more about this update, check here.