Online mortgage bot wins funding

First Mortgage Services has poured several million dollars into a local software start-up that offers a tool for lenders to instantly verify the financial status of customers as they apply for credit. 

FMS' investment is the first of two partnerships for Mogo Holdings, which launched just one month ago in Australia.

The software company's flagship technology, MogoCheck, offers Australian lenders the ability to authenticate the financial details of customers seeking credit.

The data capture tool collects specified financial information of a customer once they log in to their internet banking - assuming they give permission and click through to an external web site. It pulls together the data required by the lender, such as a three-month transaction history statement. 

The process is automated, and once complete, the tool sends the information back to the lender’s internal systems for authentication.

MogoCheck uses the same set of technologies developed by Mogo's founders for POLi Payments - which again with user permission automates the process of making online payments without the sharing of credit card details or use of third-party providers such as Paypal. The founders of Mogo licensed this technology to Centricom prior to moving on to mortgage fulfilment.

FMS provides back office operations for mortgage fulfilment. CEO Patti Eyres said the value for FMS was the ability for its lender clients to leverage Mogo for credit assessment.

"If you need payroll details, bank statements or any verification documents, you can use Mogo to contact the relevant provider and pull that information out and send it to the credit institution,” she said.

“We’re interested in technology that reduces the risk and time it takes to fulfil a mortgage.”

Eyers declined to comment on the percentage stake FMS acquired in Mogo. She said while it was not a majority share it was a “reasonable” percentage and valued “in the millions."

FMS is one of two local organisations in the finance sector Mogo has secured some form of partnership with since its launch.

Mogo CEO Andrew Clouston told iTnews the second lender - which has a service partnership with Mogo rather than a direct investment - will be announced in January 2014.

How does it work?

Clouston and his team spent the last twelve months building specific code, or what they call “active content agents", for 12 different bank account providers.

When a customer applies for a loan, the partnering lender institution sends the customer a link to MogoCheck, which can be accessed on any device, from which they are to log in to their internet banking platform. 

The active content agent within the tool is pre-educated to know how to navigate most online banking platforms, and automatically pulls the pre-specified information from the customer’s account.

Customers are shown a progress dial to inform them of the stages of the process.

Once the process is complete and the data encrypted with a security key, the report is delivered direct to a lender’s systems via an application programming interface built by Mogo. 

Clouston and team hold a number of bank accounts themselves in order to create the active content agents, and monitor those accounts for any changes. 

The 12 active content agents give the company 90 percent coverage of bank accounts used by customers applying for loans in Australia, Clouston said.

He estimated Australia has around 100 account providers. Mogo will look to expand its tool to up to 40 of those, which Clouston said will give the company coverage of over 95 percent of local bank accounts.

“Every bank will be slightly different in the structure of their online banking site and how they represent their information,” he said.

“The active content agent has to be educated on how to navigate those parts of the service to make sure they can provide the lending institution with the information they need to proceed.”