Banking as a service, Podcasts

Blend’s Erin Collard: Mortgages are the data superset of every other financial product

  • Blend began by digitizing mortgages for banks with the plan to expand to other products.
  • We also speak to the founder about the new deposit accounts the firm launched.
close

Email a Friend

Blend’s Erin Collard: Mortgages are the data superset of every other financial product

Financial technology company Blend began building its platform by helping traditional institutions digitize mortgages, working with firms like Wells Fargo, US Bank and some regional banks and credit unions. Starting with digital mortgages was by design —it's a super complex financial product that requires a lot of data. From there, it's expanded into other offerings like HELOCs and home insurance. Blend recently launched a new digital deposit account product for its bank and credit union customers.

Blend founder Erin Collard joins me on the pod to discuss why a third of consumers begin their account opening journey online but nearly half of them are forced to complete the process offline. We talk about how consumer expectations have changed and what financial institutions are doing to meet them. We also chat about the pushback he received when he started working on digital mortgages and how things have played out since.

SubscribeiTunes I SoundCloud I Spotify
The following excerpts were edited for clarity.

Post crisis, digital mortgages a huge opportunity

If you go back pre-crisis, I was working at Clarium Capital. I met Peter Thiel early on when he was working at PayPal. I worked for him at a global macro fund. Peter is also the founder of Palantir Technologies. In the time I worked with Peter, I met my other two founders, working with them closely to take the technology and apply it to the banking system.

Post crisis, the world changed. There was a seismic change in finance and with technology's role. When you look at the housing market -- a $10 trillion industry in the US -- we were taken aback about how little money had been invested in technology and how much Silicon Valley ignored it. The initial idea was to partner with the banks to allow their consumers to access mortgages online.

Mortgages as holy grail of financial data

There was a reason we started with mortgages. They are the holy grail of financial data. It is the data superset of essentially every other financial product. We started with mortgages, always with the view to expand into the ecosystem, into a horizontal SaaS platform.

You have to go through everything from verification of your assets and income to providing tax statements. Mortgages take the full litany of consumer data. If you're selling into banks -- a very difficult prospect -- once you're in and handling complex financial products, expanding out into other products is much easier. If you're handling the data superset, handling data subsets is much easier.

The evolving financial industry

We've seen a shift from financial institutions trying to build technology in-house. Banks are much more open to partnering with startups. There's more of a rental view of how you see technology. Instead of spending $20 million to develop this in-house, why don't we use some of the best companies out there solely focused on this to deliver a first class technology experience.

When we started the company, people thought we were crazy Californian kids, trying to digitize mortgages. They didn't think anyone would get a mortgage on mobile. There was this thought that things would never change. There was a feeling that faxing in your social security number and bank statements was here forever.

Introducing account deposits

Deposit accounts are still quite painful to open in the U.S. It's such a simple product. It was an easy fix for us and more importantly, they kind of go hand in hand with mortgages. People typically open up an account to deposit their paycheck to pay off their mortgages at the bank they took out their loan.

We want to support these consumers throughout their lifecycle. If they have children, student loans might be an option. So, too, an auto loan. Our goal is to eventually enable the banks to offer all these products in a very accessible way.

An unexpected response from customers

We were excited. We had a vision, spent a couple years building Blend. We thought we built the best thing since sliced bread. We thought it was a no brainer but there was a lot of resistance to it. People didn't want to change. I was surprised -- it just seemed so obvious that this was the way forward. When things started to change, there was kind of a defining moment when the world was moving to a digital path.

0 comments on “Blend’s Erin Collard: Mortgages are the data superset of every other financial product”

Podcasts, The Customer Effect

How Gen Z likes to get paid with Amex, Wise, and DailyPay

  • Does Gen Z have different preferences and behaviors when it comes to getting paid?
  • In this episode of the podcast, we explore topics such as cross-border remittances, early wage access, and the evolving landscape of financial technology and services for Gen Z.
Zachary Miller | December 06, 2023
Podcasts

Tearsheet’s top 10 podcasts of 2023

  • What a year it's been -- from lingering COVID to bank failures to rising inflation and interest rates.
  • We track the year that was, through some of the top podcasts we published in 2023.
Zachary Miller | December 05, 2023
Podcasts

‘The Chief Data and Analytics Office is a team sport’: Vanguard’s Ryan Swann

  • Ryan Swann, Vanguard's Chief Data and Analytics Officer, champions the centralization of data analytics for business efficiency while highlighting the importance of diverse talent in innovation.
  • He envisions a convergence of offensive and defensive data strategies to enhance capabilities and reduce costs at Vanguard.
Zachary Miller | December 01, 2023
Podcasts

The state of bill pay with Solutions by Text’s Nick Babinsky

  • Consumers struggle with one-time payments, frequently forgetting to pay their bills on time.
  • Banks, billers, and payers can find success when simple texts are used as reminders and onboarding to payment flows.
Zachary Miller | November 29, 2023
Podcasts

‘If you can get Gen Z right, it’s going to build your bank for the future’: Citizens Bank’s Vice Chair, Brendan Coughlin

  • Regional banks like Citizens face a variety of challenges, from high interest rates to rising consumer expectations.
  • Brendan Coughlin, the bank's Vice Chair and head of consumer banking, joins us on the podcast to discuss how his firm is navigating the challenges and opportunities in this market.
Zachary Miller | November 21, 2023
More Articles