Nano expands digital loan offering

Launched officially in June 2020 following its rebrand from previous name Verteva, Nano Digital Home Loans (Nano) is a technology provider and lender focused on digital mortgages.

Previously, Nano's technology has orbited larger banks, including AMP Bank, in developing digital home loans and Connective Home Loans (CHL) recently partnered with Digital Mortgage Solutions – the technology provider to Nano – to offer brokers a “fully digital home-loan”.

While the lender had launched a refinance product in June 2021, it has now officially rolled out its mortgage that enables approved home buyers to borrow up to $2.5 million (or 80 per cent of the valuation) over 30-year terms.

Rates start from 2.24 per cent per annum for owner-occupiers and 2.54 per cent for investors. (As there are no fees, the comparison rate is the same as the variable rate).

Speaking at a conference in Sydney on Tuesday (14 June), co-founder and chief executive Andrew Walker noted that its digital end-to-end home loan enabled borrowers to apply and secure full loan approval “in a matter of minutes”, with the entire five-step process – including identity verification – existing solely online.

The lender suggested that its fastest time for full approval was under 10 minutes, which it claimed was the “fastest loan approval in Australia”.

Speaking during the conference, Nano chief experience officer Chris Lumby highlighted, however, that not every applicant would be able to reach full approval online, with the lender’s credit risk appetite statement limited to more vanilla loans.

However, he said that the lender was able to indicate a borrower’s viability for a Nano loan early in the application process, to provide a “quick no”.

Mr Lumby explained: “If you had an loan-to-value ratio (LVR), for example, of 90 per cent, we say, straight up: ‘We can’t support you’. So you don’t go through the rest of the journey. Another example is if you put in your property address, and it was, for example, leasehold land, we don’t lend on leasehold land. We’d be upfront and tell you that in there. And the journey would stop so we don’t have people go all the way through to let them down.”

However, the conference also marked Nano’s intentions to further expand into the Software-as-a-Service space, with Nano revealing it is building a product for “another of the top 10 banks”, which will be using the platform “in the second half of this year” with another “three or four others in design in the pipeline”. 

The CEO said that lenders are typically using technology that is “sitting on Tandem mainframes with COBOL backings that were born in the 80s” Mr Walker said.

He added that while other lenders may try to improve their customer experience, efficiency and processing time, this technology has a “rate limiter of innovation”.

“You can’t get any further because you’re caught by the technology in the approach to the past. And the stress and the anxiety – It’s all born and worn by the customer,” he said, adding that digital applications were an emerging trend that borrowers were becoming used to. 

“Customers want more. They can do everything online and COVID-19 has exacerbated that digital trend.

“And it’s quite clear now that speed is the battleground,” he said later elaborating that this new battlefield will be customer experience and “speed in time of process as a proxy for cost”.

According to a survey of 1,000 Australians, which was commissioned by Nano and conducted by the market researcher Pureprofile during April, one in five Australian home owners had missed out on at least one property due to a delay in financing. 

The same data also suggested that almost one in every two borrowers (49 per cent) waited between one and two weeks for approval, and that 22 per cent waited between three and six. 

“When you think about … the stress and anxiety [time to yes] can cause, this shows that, in 10 minutes, you can essentially remove all that stress and anxiety by going through this not only digital application but digital decision process,” Mr Lumby said. 

[Related: CBA launches direct-only digital mortgage]