BankTech

Modular architecture powers Blend’s expansion from mortgage to consumer banking products

Blend says its consumer lending platform can help banks & credit unions move faster digitally

Blend has steadily grown to be a powerhouse in the mortgage tech industry. The company’s white-label technology is what powers mortgage applications on the site of banks such as Wells Fargo and U.S. Bank with the goal of making the process faster, simpler and more transparent. 

But this year, the 8-year-old San Francisco-based startup significantly expanded its digital consumer lending platform.

With the expansion, Blend began offering its more than 250 lender customers new configuration capabilities and “support for every major consumer banking product” so they can more quickly and seamlessly meet customers’ needs “from application to close.”

This configurable platform, according to CEO Nima Ghamsari, gives financial institutions such as banks and credit unions a way to launch any consumer banking product “in days rather than months.” It offers product templates, “no-code” drag-and-drop workflows, integrated data services, and control over design elements.

At the same time, Blend has added personal loans, credit cards, and specialty vehicle loans to its consumer banking suite, which had already included offerings for home equity, auto loans and deposit accounts. All of the products run on a single, “unified” platform “that enable streamlined data verification, pre-approvals, automated processing tasks,” among other things, according to the company.

“Two things really led us to want to serve customers through our consumer financial lending platform,” Ghamsari told FinLedger. “Very little has been built to help serve lenders in a way that allows them to think about their customer specifically.”

For one, Blend has always been built on a modular architecture. The company realized that a lot of the technology it developed to underwrite a mortgage is actually the same functionality needed to develop really any product, Ghamsari said.

The platform gives FIs a way to connect to their LOS, core banking system, or other systems of record, as well as to third-party service providers for credit, data verification via its pre-built integrations and APIs.

Also, Blend recognized that custom code that an institution has to maintain is a depreciating asset for a bank so it set out to provide “drag and drop” capabilities that would instead be an appreciating asset.

“Configuration is the goal so they can tweak it how they want, and not have to customize from scratch unless they want to. And then, they can do it in a matter of days,” Ghamsari told FinLedger. “By unlocking the power of our platform for other capabilities, our customers don’t have to hire an army of engineers. It’s a game-changer.”

One of those customers, M&T Bank, found itself earlier this year needing to help its business customers process “more loans in a few hours through the SBA’s Paycheck Protection Program” than it had done in a full year. 

By using Blend’s platform, the bank was able to spin up a new digital product to process the loans in 72 hours. Since April, Blend’s technology has given M&T the ability to fund nearly 100% of the requests they received, amounting to 32,273 loans totaling almost $7 billion. In all of 2019, M&T Bank only processed 1,400 Small Business Administration loans.

This year, Blend also expedited the development of Blend Close in response to customer demand driven by COVID-19, and has had over 70 customers sign on for the product, the company says. Blend Close offers a “single, integrated experience” with all of the necessary functionality for eSign, Remote Online Notarization or an in-person notary, generation and signing of eNote, and integration to an eVault.

Meanwhile, Blend’s SaaS (software-as-a-service) platform processes over $3.5 billion in mortgages and consumer loans per day in partnership with over 250 financial institutions, up from nearly $2 billion and over 150 lender customers in June of 2019. Blend’s customer base accounts for more than 30% of the $2.1 trillion U.S. mortgage market by origination volume, according to HMDA data. In 2019, Blend processed a total of $538 billion in loans, more than double the $211 billion worth it processed in 2018.

In August, Blend announced the close a $75 million Series F round that valued the company at nearly $1.7 billion, making it officially a unicorn.

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