Glasgow-based financial capability company, Castlight Financial, is launching a pilot of its Affordability Passport in partnership with Paradigm Mortgage Services and Foundation Home Loans. This move could revolutionise banking and borrowing for both consumers and organisations alike, as the open banking platform has the potential to streamline a number of processes throughout mortgage or loan applications.

Foundation Home Loans and Paradigm Mortgage Services are among the first in the UK to recognise and implement open banking technology in an attempt to transform the residential mortgage space.

Streamlined Banking

The pilot will see the launch of an affordability tool powered by open banking technology which could allow brokers to process mortgages in under ten minutes; streamlining a process that previously could have taken significantly longer. Through the Affordability Passport, prospective borrowers will also be able to share their transaction data in real-time with a lender, further cutting down a potentially lengthy and laborious process.

The platform then utilises the world’s most powerful categorisation engine, developed by Castlight Financial, to categorise the prospective borrower’s income and discretionary and non-discretionary expenditures into over 150 different categories.

Because the Affordability Passport gives a detailed insight into the borrowers transaction history, the process of trawling through bank statements and payslips to ensure AML compliance is cut down. In practice, a lender doesn’t need to see or touch any paperwork; thus streamlining the entire process and enabling the lender to make a fast, informed and compliant decision.

Developing A Positive Industry

Martin Leonard, Castlight Financial Chief Operating Officer said the company is “delighted” with the partnership and that this could further revolutionise lending procedures for both banks and customers.

Martin told DIGIT: “We are delighted that Paradigm Mortgage Services and Foundation Home Loans share our vision for transformational change in the mortgage space. This is good news for Foundation Home Loans brokers who will have access to the kind of insight into a customer’s financial well being that the bank managers of the past used to have – but at the touch of a button.

Continuing he said: “And for their customers who won’t have to assemble piles of paperwork and give up three hours of their day to apply for a mortgage.”

Martin says that at its core, the Affordability Passport is a positive addition to the mortgage industry as it ensures responsible lending both on the part of the consumer and the lenders themselves. He said: “For Castlight Financial we believe its also good news for the wider mortgage industry as the Affordability Passport, at its very heart, is a tool for ensuring that borrowers borrow safely and lenders lend safely.

“It’s a tool designed to ensure financial security and that’s a good thing for everyone.”

John Cofield, Head of Mortgages at Paradigm said the firm look forward to working with Castlight and Foundation Home Loans on this project. He said: “We believe this cutting-edge technology from Castlight will create greater efficiencies and ultimately speed up the mortgage application process for clients and intermediaries alike.

“Technology remains a common buzz word in the industry, and at Paradigm we are committed to offering advisers access to technology that will benefit both them and their clients. In this initiative, there are tangible benefits and therefore I’m sure it will be positively received by advisers.”