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Why mortgage brokers are embracing ‘digital onboarding’ and not looking back

For much of the mortgage industry’s history, brokers required a mountain of paperwork from prospective clients to ensure they’d actually be approved by a willing lender.

No longer. These days, brokers are increasingly turning to digital onboarding, a process that takes what was once done on a fax machine or by mail and brings it online. Through fintech companies such as Lendesk and Pinch, brokers can assess the financial health of customers in as little as 10 to 15 minutes without ever needing to meet in person, or missing an important piece of paperwork.

“We see ourselves as making mortgage professionals more efficient in their own processes, and therefore staying relevant with customers going forward,” says Andrew Wells, founder and CEO of Pinch Financial, a Toronto-based company that provides digital onboarding for banks, lenders and brokers.

The benefits of digital onboarding

Instead of collecting all the paperwork needed to determine whether a client is suitable for a mortgage by hand, Pinch’s platform automates the collection of all borrower information. This includes identity documents, income, assets, creditworthiness and property appraisals.

All of this allows brokers to immediately calculate the total debt service (TDS) and gross debt service (GDS) ratios, a crucial calculation that determines if the applicant qualifies for the mortgage in question.

To clients, the difference is in the amount of time they spend preparing their application and waiting for it to come back. But for brokers, Wells says, the benefit comes in the comprehensiveness of the information they receive from clients.

“By the time they receive a file it is 100% completed,” he says. Better still, Pinch allows brokers to import this information into whatever deal management system they already happen to be using, be it Velocity, Finmo, Filogix or another system entirely.

“The idea has always been to sort of take the messiness and decentralized nature of lead aggregation and qualify it in an efficient manner,” he adds.

But digital onboarding providers say there are a couple of other benefits for brokers besides a better-organized workflow.

Carter Zimmerman, president of Lendesk, says customers generally want a service that can get them a mortgage as conveniently as an Uber order.

“If all of your clients are in a world where they open up their phone and can get Chipotle in 20 minutes, there’s this immediacy or quickness about the client experience that’s really important,” he says.

A way for brokers to set themselves apart

Offering a digital onboarding experience not only offers clients added value, but Zimmerman says it also gives prospective borrowers a reason to choose a more technically savvy broker over another.

That could be a big draw at a time when competition for clients is tighter than ever before due to declining mortgage volumes in the face of record-high interest rates.

“You can’t rely on the customer to come seek you out,” Wells says. “You have to find the customer where they are.”

Plus, Zimmerman says, Lendesk can integrate into a variety of different Finmo products to let mortgage brokers use different programs for different tasks. Finmo is the analytics and reporting platform operated by Lendesk, but it also connects with tools that can send automated emails, manipulate data and even generate forecasts.

“We are an all-in-one solution,” Zimmerman says. “You can have the best of every tool that’s on the market today.”

For Pinch, which was founded in 2017 and acquired by M3 Group in 2021, its focus has always been on automating the verification of the borrower’s information, something that really came to the forefront during the COVID-19 pandemic and the resulting lockdowns. With offices shuttered, going digital became the only way to stay in business for many.

The pandemic and its accompanying pivot to remote work and digital programs forced the mortgage industry to adapt for good and it appears it’s not looking back.

At Pinch, Wells says the company’s sales are up 200% year-to-date. “I think there’s been a significant shift, and I think it is market-wide,” he says. “It’s not just us.”



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