Chimney is a fintech that develops website tools — calculators, mainly — to engage potential loan customers. BankBeat spoke with CEO Matthew Covi about online lending and using calculators to attract customers.
What differentiates online lending tools and what makes one a good fit for community banks?
Matthew Covi: The issue is that most lending experiences aren’t differentiated. Personal finances are personal. People want personalized, interactive experiences. In fact, one report from Salesforce shows that 66 percent of consumers expect companies to understand their unique needs. The same percent says they’re generally treated like numbers.
To effectively personalize a customer’s experience, investments in open banking data and external data must be made. This will allow banks to access more financial data without extensive integrations. Then, this data can offer insights into the customer’s financial needs. Not only does this help a bank tailor their interactions to the individual customer, but it can more easily guide customers through their financial journey.
What types of loans find success in the online lending space, and why?
M.C.: Google sheds a lot of light on this. Based on what consumers are searching for online, home lending/mortgage is by far the most common. Auto lending follows second, then retirement, personal banking and then commercial banking. Consumers are increasingly turning to digital channels for everything, so we should expect to see gains in more than just mortgage and auto lending.
How are small businesses being served up loans online?
M.C.: According to the U.S. Small Business Administration, small businesses make up 99.9 percent of all U.S. companies, and nearly half of private-sector employment. What’s remarkable is the diversity among small businesses, producing products or delivering services in virtually every industry segment and accounting for about 44 percent of the total private-sector output of the economy. But it’s this level of diversity that makes it nearly impossible to determine what type of small business is most likely to look online for loans. What we do know is that small businesses overall are increasingly going online first.
Small businesses typically struggle when looking for financing. As a result, they are turning to alternative lending sources. However, banks have access to tremendous amounts of data to evaluate their lending activity. With that data, they can look for trends — size of businesses, geographic location, size of loans, industry categories, etc. All these factors must be considered.
Do you see this type of lending growing in the ag sector?
M.C.: Consistent with consumer behavior changes, a growing number of farmers are forgoing face-to-face meetings with their banker and instead relying on online lending. It’s too early to see adoption trends, but it’s reasonable to expect a shift. We’re seeing companies like John Deere offer online financing options, showing a potential trend.
How does a bank pay for Chimney’s calculator tools?
M.C.: Everything we do is value-based. The more value our bank partners see from our solutions, the more they pay. Our partners pay a SaaS subscription along with a small percentage of the leads and/or funded loans they receive directly from our technology.
How does a bank use calculators to attract online loan customers?
M.C.: In today’s ultra-competitive environment, home lending calculators are a requirement on any website designed to help mortgage lenders win more customers and generate more qualified leads. People want to understand the mortgage process, like how much home they can afford, if they should rent or buy, or what their monthly payment might look like.
For a mortgage lender, it’s crucial that their website can answer these key questions for prospective homebuyers and home refi customers. One of the most effective ways to attract eager real estate shoppers or refinance applicants is with mortgage calculators.
But good mortgage calculators don’t just fall into the cool-to-have “bells and whistles” category — they are must-haves for websites to compete in the digital home lending marketplace. With the right calculators, you can meet the goal of increasing mortgage applications and leads.