Sandstone Technology bring risk-based pricing into their arsenal for SME lending.
With the pandemic driving more entrepreneurs into the market as people look for more flexible working opportunities, we are seeing an uplift in Micro SME and SME businesses across the globe. With many retail banking customers owning and operating small businesses, people’s personal and business banking needs are becoming more interlinked.
By further extending their Loan Origination System’s (LendFast) capabilities, Sandstone Technology identified a need to incorporate risk-based pricing into the systems workflow and decisioning engine. The Brilliance Financial Technology partnership, through their DPX deal, pricing and profitability optimisation solution, provides Sandstone with the ability to optimise a bank’s pricing and profitability outcome, helping to streamline the loan application experience. By having automated deal pricing and profitability optimisation functionality embedded in the origination flow, every deal is made with eyes wide open, consistently and efficiently.
In Australia and New Zealand SME lenders generally focus on digitising the CRM and origination journey but try to manage pricing and profitability in spreadsheet-based models disrupting the RM and broker journey and assessing deal and relationship profitability in the rear-view mirror. Many SME lenders cling to legacy processes that are potentially slowing them down. Having a digitised, consistent process and procedure can help build and maintain customer relationships, enhance proactive and reactive retention measures, and reduce ‘special pricing’ offered inconsistently and without justification on the front and back book.
Mic Phillipou, Sandstone Technology’s CEO, said, “the Brilliance and Sandstone partnership will ensure banks and financial institutions can be confident in the deals being executed by their relationship managers, knowing that risk-based pricing has been applied to the deal in real-time. With interest rate increases expected to impact both lenders and borrowers alike, we understand that real-time data driven decision making will be crucial to financial institutions’ success.”
Jean-Edouard van Praet, CEO and President of Brilliance Financial Technology said he was pleased to be working with Sandstone Technology to enhance the digital experience for their SME banking clients.
“We have been working with some of the largest financial institutions in the world over the last 15 plus years optimising not only the deal at hand but the overall relationship profitability. Digital technology and this partnership with Sandstone means that SME and business banks can access this critical piece of the origination jigsaw puzzle and stay competitive in an increasingly competitive market” suggests van Praet.
Sandstone’s investment in SME capability comes off the back of their strength in origination and lending within the highly regulated and competitive consumer lending market within Australia and New Zealand.