The technology provides lenders with a data-driven approach to product development
Five lenders will be piloting the new predictive mortgage modelling software MBT Sandbox, according to its developer, Mortgage Broker Tools (MBT).
MBT Sandbox enables lenders to build, price, and deliver improved mortgage propositions easily, helping them to make smarter product, pricing, criteria, and affordability decisions using advanced analytics and real-time data.
Using the software, lenders can edit over 60 criteria elements, including loan-to-value (LTV) and maximum loan by mortgage type, repayment type, term, age, and maximum income, among other elements. They can also edit initial and reversion rates, as well as stress rates, to see how pricing impacts elasticity once criteria and affordability are taken into consideration.
“Consumer Duty is just around the corner,” remarked Tanya Toumadj (pictured), chief executive at Mortgage Broker Tools. “The new regulations will put greater emphasis on lenders demonstrating products have been developed with fair value in mind to meet particular customer requirements – and this will require data to show rationale.
“MBT Sandbox provides lenders with a ground-breaking data-driven approach to product development, enabling them to create and refine products with specific customer segments in mind.”
Toumadj added that by more accurately targeting customer types, lenders would be able to more easily demonstrate the approach they had taken and their reasoning why they believed the product would result in a positive customer outcome.
“At MBT, we are now working with five lenders to help ensure they are able to meet both their regulatory obligations and commercial objectives, by taking a smarter, more data-driven approach to product development,” she stated.
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