Bank transaction data on demand, what a great time to be in the financial services industry! Unfortunately, at the same time, not all data returns are equal and anything “in real time” goes stale very quickly. We’ll break this into bite size pieces for you as there is a lot to unpack here.
Starting with, “What is Instant Refresh?”
Instant Refresh (specifically for DecisionLogic) is a unique feature of our Instant Account Verification
or IAV product. Let’s take a step back and explain IAV first. Instant Account Verification is a digital bank statement commonly used in underwriting to determine loan eligibility. It is also used to verify income for tenant screening, and to verify assets for mortgages.
The customer steps through a simple process using their online banking credentials, which gives their lender a read-only version of their bank transaction history in minutes. This means no hassling with paper bank statements and is fast, secure, and easy for everyone involved!
Instant Refresh is used to re-pull the newest bank transactions at a later time so you have up-to-the-minute data for underwriting and many other use cases, which we will review below.
Why do I need it?
That depends on what you do and how you use banking information to begin with. Do you need to reduce fraud? Prevent loan stacking? Ensure ACH payments don’t bounce? Process returning customers? Protect escrow? Those are just a few ways you can use Instant Refresh, let me explain how.
Prevent loan stacking
No matter how fast your underwriting process is, loan stacking is faster. By re-pulling the data right before funding, you can make sure your potential borrower has not gotten themselves a little extra security in the form of another loan.
Unfortunately, we see this all the time, and it’s not always intentional. Sometimes a borrower gets online and starts applying for loans without waiting to see what the outcome is. Or maybe there is a delayed response, they take the first loan offer they get and then another one pops up like it’s raining pennies from heaven. Of course, it will seem enticing, maybe it’s the difference between paying for groceries and also getting some desperately overdue new shoes for their kids. The average subprime borrower may not even know getting more than one loan is a bad thing (how could more money be anything but a good thing)?
Pre-payment validation to double check loan position
Moving on to merchant lending. Here, having more than one loan isn’t necessarily a deal breaker, but the lender still needs to keep a close eye on what “position” they are in. For example, if the potential borrower already has two loans, it would put the new lender in third position which for some lenders isn’t a problem as long as it stays that way. Every lender, even within the same vertical, has different thresholds for underwriting and risk.
Virtually eliminate fraud
This brings us to one of the biggest reasons to use Instant Refresh. Between IAV and the ability to pull up-to-the-minute transactions, it is extremely difficult to get fraudulent bank data. The information comes directly from the financial institution and cannot be altered. This means you can verify the amount, timing, and consistency of income in real time. It also means you re-pull the data to make sure that amount, timing, and consistency doesn’t change before committing to a loan.
During the pandemic, there were a lot of layoffs. As a result, several borrowers tried to get a loan as soon as they got laid off thinking the lender would not know that their most recent paycheck was actually their last. Obviously, this would mean there would be no way to pay back that loan, resulting in higher default rates for lenders that did not have an IAV provider, preferably one with an income consistency flag.
Fun Fact: We already had an Income Stability Score, but we also recognized the need for a flag showing if a paycheck was out of timing or in an odd amount indicating possible layoff.
Zero-friction follow up for return customers
Who doesn’t love a returning customer? And to keep them coming back, you will want to keep the subsequent visits as easy as possible. Instant Refresh can help with that. If the link is still active from the previous loan, and the borrower has not switched institutions, you can re-pull the data without the borrower having to go through the IAV process again (zero friction for the win)!
ACH pre-checks to reduce ACH payment bounces
An ACH is a fast, convenient way to get a loan payment from a customer, and they can be pre-scheduled to reduce stress even further. Until that ACH bounces (which is not anywhere near as fun as it sounds), trust me when I tell you, it becomes a digital headache. Besides the time and man hours adding insult to injury, there is usually a fee for this financial guffaw.
All of that can be avoided by re-pulling the data and verifying funds before the pre-scheduled ACH gets pulled.
Arguably one of the most valuable uses (“invaluable” if you ask anyone in the mortgage industry) is protecting escrow. Escrow is one of the final steps before funding is released in purchasing a house or piece of real estate. This can be a very tense time as it can commonly stretch on for several weeks to months. In that time frame, the financial assets must be monitored carefully as the financing is based on the assets being in a specific state. Any major change can require the process to start over from scratch. For example, a large purchase or a new line of credit. Does it seem a bit antiquated to base financing on a single moment in time then be held to maintaining that exact snapshot for 4-6 weeks? Yes, it does, but it won’t be changing any time soon, so we make the best of it. And for mortgage lenders this makes Instant Refresh a game-changer. Instantly refresh the data with zero action required from the borrower.
Finally, how DecisionLogic does it differently
If you are a current DecisionLogic customer, you already know about our world-class support team (Even our competitors comment on how they can’t compete)! If you are new to the DecisionLogic partnership, we highly value every customer relationship regardless of monetary commitment. This means you get unlimited support, at no additional cost to you. And that’s not all. Our support is comprehensive, from onboarding to agent training, technical support for your development team to integrate our process into your dashboard, and support for your borrowers if they need assistance stepping through the process. You can call with no wait times or long automated process to wade through. You can email us and get a response within 24 hours (though typically it’s a lot less than that). If you have a really quick question, you can hop on our website and chat with us in real time. In every case, you will be talking to real people who are happy to help you with anything you need assistance with. Real people with real solutions
To that end, we stand behind every statement. We are the only IAV provider in the industry that can, and will, say that out loud. This means that if you believe something is off with the data, we will dig through the backend logs to get you the answers you need to make the best decisions possible for your business.
Now for the best part! We have multiple data sources, plus direct connections to banks for the most comprehensive coverage possible. And we can still offer Instant Refresh across ALL data providers at a cost and cadence that works best for your model. Sounds crazy, doesn’t it? The DecisionLogic difference is that we believe in being a true partner in your business and that includes really listening to our customers. When they tell us that something is critical to their business, we listen. Can your vendors say that?
If you’re not part of a DecisionLogic partnership, reach out today
to see what a difference we can make in your business in as little as 15 minutes.