Case study: How Finlocker and Fiserv enhance data, lower lending costs and increase throughput for mortgage originators to benefit consumer financial wellness

Based on this real-world use case, data is helping driving innovation and companies that realize this are on the fast track to growing their business and deepening customer engagement. Fiserv’s AllData aggregation product is being used by companies of all sizes to help consumers see their full financial pictures, enabling them to make smarter and more-informed financial decisions.

Fiserv is a sponsor of the DataDay Conference presented by Tearsheet on June 2 through June 4th. DataDay is the premiere conference in the financial services industry that deals entirely with data -- data ecosystems, data aggregation, and alternative data. Fiserv’s Paul Diegelman will be presenting along with senior leaders at MX, Plaid, Wells Fargo, Envestnet Yodlee, Nova Credit, Stash, and more. Register here.

We’ve got an interesting episode teed up today. It’s a case study with Finlocker and Fiserv. Finlocker is a super app that integrates with banks and other financial institutions to enable loans and financial transactions. Consumers consent to feed it with their bank account data and the personal finance assistant makes loan product recommendations.

President Brian Vieaux joins us on the podcast today to talk about how Finlocker enhances consumer data, lowers lending costs and increases throughput for mortgage originators as part of an overall financial wellness scheme. Joining us too is Paul Diegelman, Fiserv’s vp of electronic payments and aggregation. Paul’s team worked closely with Finlocker to integrate Fiserv’s AllData aggregation product. AllData provides up-to-the-minute aggregated account data from roughly 18,000 connections from sources like banks, credit unions, billers, card platforms and wealth management firms, providing the data consumers have permissioned into their lockers.

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The following excerpts were edited for clarity.

Finlocker's clients

Finlocker's Brian Vieaux: Finlocker is a financial super app -- it's the best way to describe us. We take many of the features and functionality that consumers would find in disparate financial apps, like Mint.com and Credit Karma. We're deep in home and mortgage analytics.

We are a B2B2C platform. Finlocker has clients that are banks, credit unions and mortgage originators who contract with us. We brand their instance of Finlocker underneath their logo and inside their tech stack. They invite their prospects and clients into the locker. Once a consumer is enrolled in a Finlocker product, she has access to her credit (reports, score, monitoring and alerts).

Using the Fiserv platform, consumers are able to load or synch all their financial accounts into the locker. That really powers the analytics layer, providing the consumer with spending analysis, and budgeting and saving tools. We also have a deep education library, mostly focused on home ownership and mortgage preparedness. The tool becomes really valuable for first time home buyers who are early in their journey. We take them through that journey, getting them ready to be a homeowner and a responsible mortgage borrower.

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Driving growth in the business

Finlocker's Brian Vieaux: Focusing on mortgage, we're continuing to see a massive race of large fintechs racing to get to the consumer first. Finlocker really arms our accounts with a tool that allows them to compete with large fintechs under their own logo. That's driving growth for us.

Fiserv's role in the Finlocker product

Fiserv's Paul Diegelman: In order for consumers to access Finlocker's home and mortgage capabilities, those consumers connect their financial accounts to their own lockers. It's Fiserv's AllData data aggregation product -- which some in the industry still refer to as CashEdge -- that provides up-to-the-minute aggregated account data from roughly 18,000 connections from sources like banks, credit unions, billers, card platforms and wealth management firms, providing the data consumers have permissioned into their lockers.

The other thing we do with Finlocker -- we've dedicated a small team to them that can quickly evaluate how changes in the mortgage and financial wellness market might impact the kind of data we provide to them. Over the last few weeks, we've all seen what's happened in the mortgage market and that's provided an opportunity to make some adjustments.

We have access to an immense amount of data. We continue to add to it -- whether it's connections or the data we get from those connections. There's a constant evolution of what's next and some clients want to be right at the front of what's next. We're happy to work with them in that way.

Finlocker's choice to work with a data aggregator

Finlocker's Brian Vieaux: This predates my joining the company but knowing what the company was focused on, there was clearly a need for data aggregation to serve within the mortgage process. Several aggregators were considered and Fiserv was the number one choice for a couple of reasons. One was the depth and breadth of the data that was aggregated in. Also, the Fiserv platform created a deeper integration point and an opportunity to go beyond mortgage with some of our customers, like banks and credit unions.

The crisis' impact on Finlocker's customers

Finlocker's Brian Vieaux: It's a really good question. It's been interesting for us. As many companies pivoted to a work from home environment -- the mortgage industry saw that as well -- we saw an initial slowdown of activity in our prospect pipeline that first week in March. That was based on folks getting acclimated to working at home and getting reset.

By week 2, we were right back into our active demo activity. Then we saw an interesting opportunity. We were focused on the front end of mortgage origination, helping loan officers and originators with their customers. With COVID-19's impact on mortgage, we started looking at the forbearance process. Borrowers have taken advantage of the industry's mortgage forbearance policies, and servicers have engaged with Finlocker to deploy our product as a way to engage consumers in forbearance.

Forbearance is essentially pausing mortgage payments for a certain time during hardship. The other side of this is some segment of consumers in forbearance will exit it in a more structured mortgage assistance program -- a loan modification. We've been preparing for that by automating a loan mod application from a consumer's locker. While we're still growing our front end origination clientele and that segment of the business, we're growing equally as fast on the back end of the mortgage servicing side. It's an exciting opportunity for us and one we didn't plan for. Through a great relationship with Fiserv, we were able to pivot quickly to service this opportunity.

The beginning of the relationship with Fiserv

Fiserv's Paul Diegelman: I want to touch on a point Brian made. The reason our team at Fiserv was interested in Finlocker is that our team really cut its chops a few years ago creating a leadership position moving money in the earned wage access market. It's a way for workers to safely get a piece of the income they've earned but haven't been paid yet on because payroll cycles take a couple of weeks.

That was a place we thought we could make a huge difference for consumers -- getting them out of the spiral of payday lending and expensive loans. If you use that as the foundation, when we met the Finlocker folks, theirs is a story of financial wellness -- how do we help consumers get their financial lives in order so they can consider first-time home ownership in an informed and educated manner.

Honestly, I'm really impressed with what they've come up with during this unfortunate situation. The number of lenders that are declaring significant loan numbers in forbearance -- it's in the millions. Just Ally alone has over 1 million auto loans in forbearance. There is a significant amount of pain out there related to loans, mortgages and lenders.

How COVID has impacted Fiserv and its customers

Fiserv's Paul Diegelman: For starters, it's impacted us in a way that we're excited to continue helping Finlocker in its evolution. On the other side, we're seeing significant growth in PFM as consumers get their budgets in line. We're seeing growth in wealth managers that have consumers coming to them for assistance. There's more growth there. It has largely been more data being shared in more ways because of COVID. But, the first week or two, it got really quiet before things started getting moving again.

Looking ahead

Fiserv's Paul Diegelman: There's a lot going on in open banking -- API access to data in a way that gives consumers the ability to provide consent. We're spending a great deal of time looking about the right way to do that with a lot of the larger institutions that have their own models. There are also intermediaries that want to participate in open banking to facilitate it. The growth of consumers wanting to share their data seems fairly unstoppable. I think, for everyone involved, the notion of how do we do that in a way that protects consumers -- we're working on all those things.

Today, news came out that we just joined FDATA as a member. That's an exciting organization focused on consumers and their sharing of data in a safe manner. It's things like this that we'll continue to focus on.

Finlocker's Brian Vieaux: In addition to supporting loss mitigation through loan modifications -- post-forbearance -- we have a couple of really cool pilots we've been engaged with. One is creating a perpetual mortgage approval. We're working with one of the GSEs in mortgage and a couple of our national lending clients. When a first time home buyer meets with a real estate professional, a perpetual mortgage approval can validate that they can afford to buy a particular property.

We're also beginning to work in partnership with Microsoft to enable an AI chatbot inside a consumer's locker that can continually analyze the data and events and alert a consumer in his locker when the next best thing occurs -- whether it's staying on budget for a particular time to afford a downpayment or if a property becomes available in a neighborhood he's looking to purchase in.