Mortgage disrupter Nano has signed a transformational deal with global tech giant Oracle under which its technology could be used to onboard all new-to-bank customers applying for a home loan with Westpac and NAB.
The arrangement struck between Nano Home Loans and Oracle Financial Services will see the nimble fintech’s onboarding and approvals process built into the Oracle banking platform and speed up the “time to yes”.
Nano CEO Andrew Walker said the deal validated the technology and its view that the proportion of digital mortgages in Australia would rise quickly from between 3 per cent to 5 per cent to around 30 per cent.
“If you are sitting there as a standard lender and your systems and processes dictate your ‘time to yes’ is anywhere from two weeks to four weeks, we think you are going to face an existential threat to your franchise,” Mr Walker said.
Oracle Financial Service counts big four banks such as Westpac and NAB as clients, while in the US megabank Citi and UK challenger bank Witty are also clients, potentially giving it global reach.
“We’re pretty excited about it. It gives us scale, partnership credibility and horsepower. And also that accelerated pathway into a global market which is pretty useful for a company at our stage,” Mr Walker said.
Founded by former Westpac executives Andrew Walker and Chris Lumby, Nano is writing around $20 million in home loans a week, putting it on track to write $1 billion in loans this calendar year.
Innovative and disruptive
Former Westpac CEO Brian Hartzer, former NAB CEO Andrew Thorburn and former CBA CEO Ralph Norris backed a capital raising completed in September.
“To get three ex-bank CEOs as investors in the company was good for us. It’s very helpful to have that kind of experience around the table and have them recognise what we have here is pretty unique,” Mr Walker said.
Oracle Financial Services general manager of Australia and New Zealand Chaitanya Rastogi said the service could confidently be used by all mortgage providers ranging from tier-one banks to non-bank lenders.
“We continually hear clients asking for innovative, cost-effective services to provide a better lending experience for their customers,” he said. “The joint proposition can provide innovative and disruptive technology capabilities that can be utilised by lenders of all sizes.”
Nano’s Mr Walker said Oracle understood that what happened in other companies like Kodak and Blockbuster Video, and sectors like the taxi industry, was coming for outdated approaches to lending.
“What’s going on is they recognise what we recognise, which is that there is a ‘Blockbuster’ moment coming to this industry and you can’t afford to move slowly,” he said.
“If you think about what Uber did to the taxi industry, is they made certain processes predictable, increased the ‘time to yes’ and made the platform do the work instead of the customer. Taxi licences didn’t go to zero, but they aren’t where they were five years ago.”
The trajectory of Nano from start-up to inking a deal with a $US260 billion technology company has been a steep one. Mr Walker left Westpac less than two years ago before establishing the fintech in November 2019.
It has attracted attention for its lightning fast approvals process, which can be completed in under 10 minutes, and its sharp pricing. Simple home loans for owner-occupiers and PAYG borrowers with loan-to-valuation ratios of 75 per cent or less can be had for just 1.99 per cent.
Source: Financial Review