Driving the digital home loan revolution

Nano’s technology-led proposition puts customers first allowing them to secure home loans in minutes, not weeks.

Nano is a financial technology company that leverages advanced data and innovative digital technologies to offer consumers better financial services. Championing clarity, simplicity, fairness and innovation, the company aims to eliminate barriers many people experience when trying to refinance, focusing on providing customers with a personalised and engaging customer experience.

The business is built on a solid foundation, having secured $33 million in Series A funding from NZ-based Bolton Equities in April 2020 followed by an Australian Credit License in July 2020. Nano soft launched to friends and family in December 2020 and started allowing customers to sign up to get priority access to refinance in Australia from April 2021.

Co-founders Andrew Walker and Chris Lumby are committed to continuous, digital-first innovation having worked together at a big bank and where they came to realisation that you cannot “build for the future on the technology of the past”. Their fully digital model enables them to cut out the ‘loyalty tax’ consumers are forced to pay to big banks, whereby discounts are offered to new customers while existing customers pay more.

“Nano’s policy is to always offer the same low rate for new and existing customers,” Andrew explains. “We don’t believe in penalising our customers with a loyalty tax. We encourage borrowers who have been caught by hidden fees, loyalty tax and bad service to refinance with an institution that believes in fairness and transparency.”

Andrew points out that major markets such as the US have shown price competition will quickly become “only half the story” in Australia, as consumers became accustomed to a radically different borrowing experience.

“Australians will always want a fair price but those are table stakes in today’s environment. They also want speed, convenience and certainty when going through what has traditionally been a stressful process,” he explains. “Our technology-led proposition puts customers first and our disruptive digital platform allows people to secure a home loan in minutes, not weeks – that means completing the entire loan process through to approval, not just filling in an ‘online application’ which then kicks off a traditional manual approval process.”

That different borrowing experience overseas he refers to is snowballing, with 30 per cent of mortgages in the US already being acquired digitally, a scenario he envisages being matched in Australia within the next three to five years – based on the fact that the value of net new flows in the Australian home loan market roughly stands at $340 billion a year, Andrew sees a huge opportunity for digital lenders. A recent Evans & Partners report on the Banking sector described the traditional banks’ response to disruption as “digital lipstick” – what Andrew describes as an effort to build a front-end customer facing portal that is entirely disconnected from legacy technology. Nano provide a genuine digital offering that he calls a bottom up rebuild of the customer experience.

“The product removes the need to have multiple accounts and centralises it into one place so customers can make the most out of their mortgage,” Andrew says. To that end, the Nano home loan comes with an offset sub account, a Nano Visa card for purchases, Apple Pay and Google Pay, as well as ‘vaults’ to tuck away money towards any special goals such as travel or a renovation.

“On the back of the pandemic, consumer expectations have changed forever,” Andrew avers. “The speed and convenience of digital is now the baseline. There is no turning back now, businesses will either adapt or die.”

This article first appeared in issue 34 of the Inside Small Business quarterly magazine