To be competitive in an era of accelerating consumer expectations, deploying a seamless application experience for personal lending, mortgage, tenant screening and other use cases is a must. Slower, resource-laden manual processes invite higher consumer drop-off rates, introduce inefficiencies and can be vulnerable to fraudsters.
Mastercard Open Banking, provided by Finicity, a Mastercard company, is equipping its customers with the capabilities to deliver smarter and more efficient digital lending experiences. With the expansion of its Verification of Income and Employment (VOIE) solution to include credentialed payroll, Mastercard Open Banking enables consumers to permission access to their payroll account data, mitigating the need to collect income documentation.
A more efficient digital experience within the loan application process is precisely what open banking customers need – and credentialed payroll delivers a seamless, secure income and employment verification process, and reliable data at speed. The latest VOIE innovation populates consumer-permissioned data directly into the correct fields, creating a fast, secure digital experience that can boost profitability while making life easier for your applicants and employees.
Strong partnerships that drive industry-leading innovations
Mastercard Open Banking teamed up with industry-leading payroll data aggregator Argyle to power this expanded VOIE solution. With 90%+ coverage of the U.S. workforce, financial institutions can now digitally verify an applicant’s income and employment in just moments.
“We’re excited to partner with Mastercard Open Banking to make digital verification of income and employment widely available through our trusted network of consumer-permissioned connections,” said Brian Geary, COO at Argyle. “Together, we are creating smarter lending experiences, free from time-consuming manual touchpoints while achieving faster and more accurate verifications,” he added. The combined capabilities of Mastercard Open Banking and Argyle are driving VOIE to be an efficient, flexible solution that comes in at a much more affordable price point than other income and employment verification options, poised to benefit financial institutions and consumers alike.
“Mastercard Open Banking’s new credentialed payroll enhancement was one of the simplest product launches we have done,” said Josh Cilman, EVP at Intercoastal Mortgage. “The new experience integrated smoothly into our existing processes with no impact to loan processing workflows and an efficient borrower experience. We are excited to digitize our loan application experience with a much more cost-effective way to verify income and employment.”
Multiple verification solutions to fit your business
Credentialed payroll is just the latest addition to Mastercard Open Banking’s growing list of digital income and employment verification solutions for smarter and faster decisioning.
Mastercard Open Banking’s Deposit Income verification solution analyzes direct deposit streams from the consumer’s permissioned bank account data to identify an applicant’s income.
Freddie Mac launched Loan Product Advisor® (LPASM) asset and income modeler (AIM) for income using direct deposits in March 2022 with Mastercard Open Banking as an initial service provider. In March 2024, Fannie Mae announced general availability of Deposit Income as part of their Desktop Underwriter (DU®) validation service. These solutions help streamline the mortgage origination process for lenders and homebuyers while expanding opportunities for home ownership.
Mastercard Open Banking solutions are used by financial institutions and decision makers in varied use cases, including mortgage lenders, tenant screeners, personal lenders, credit card issuers and more. Credentialed payroll and Deposit Income solutions provide financial institutions with the high conversion, affordable income, and employment solutions they seek.
Bank account and payroll account data can be used independently or in combination to enhance the customer experience depending on the institution’s needs and workflows.
Partner with Mastercard to create better consumer experiences
The Mastercard Open Banking platform delivers next-generation financial experiences that delight consumers. The platform serves as a one-stop shop for digital verifications, with the capabilities to verify assets, balances, income, employment, cash flow and much more, seamlessly and at scale. Credentialed payroll and Deposit Income solutions are available today through Mastercard Open Banking’s lending solutions.
In partnership with Mastercard Open Banking, with services provided by Finicity, a Mastercard company, Fannie Mae continues to work toward improving access to affordable housing with secure banking-powered technologies, speeding up the application process for lenders and reducing the need for manual document preparation.
In addition to helping lenders validate assets and assess a borrower’s rent payment history and cash flow, Fannie Mae’s Desktop Underwriter® (DU®) validation service gives lenders the power to verify a borrowers’ income and employment information using a single 12-month asset report. This digital enhancement is saving lenders time while enhancing the borrower experience.
Demand for a better mortgage process
Traditionally, borrowers have been asked to manually collect and share stacks of sensitive income documents with mortgage loan officers, a time-consuming and less secure process that creates inefficiency for both the borrower and the lender.
A complete digital verification solution for mortgage lenders
DU provides a digital option that simplifies and removes friction from the application process. When applying for a mortgage, borrowers can access Finicity’s user-friendly Connect consent flow to link their bank accounts, enabling their data to be easily shared with the lender.
With one report from Finicity, DU can help lenders validate a borrower’s asset, income and employment information while simultaneously analyzing cash flow and rent payment history to help approve more potential homeowners.
All the verifications needed to process a mortgage application can be conducted on the spot, without paperwork.
Fannie Mae’s latest innovation leverages Mortgage Verification Service (MVS) from Finicity as a leading report supplier to power the verifications needed to process a mortgage application.
- Fannie Mae’s Digital Verification Solution requires an asset report of 12 months or more to run
- Lenders must request that this feature be turned on
“With Desktop Underwriter® (DU®), lenders can now get even more benefits from using a single 12-month asset report. We continue to look for ways to help lenders streamline their validation processes and improve the borrower experience, and this latest enhancement helps them do just that.”
Peter Skarnulis, Fannie Mae Vice President, Business Account Management Solutions
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The future of digital finance is evolving, and it’s happening just in time
Over the last few years, the move to digital finance has accelerated. Consumers are adopting emerging financial apps and services, empowering them to take control of their financial health. The same technological leaps that are enhancing payments, financial management and banking are also changing lending for the better, and they couldn’t have come at a more opportune time.
That’s because consumers are feeling the impact of economic uncertainty and worry about the effect that it may have on them. In a 2023 survey, Mastercard spoke to 7,600 consumers across the United States, Canada, the U.K., Australia, France, Germany and Spain about their recent financial experiences.
Over 89% of respondents say that they’ve been negatively affected by economic uncertainty.
At the same time, whether they’re making big purchases like homes or handling everyday needs like transportation or food, consumers worry that they won’t be able to borrow what they need.
Open banking data can help consumers get to the bottom of these challenges.
For starters, open banking allows consumers to permission access to their bank account, allowing lenders to augment their credit decisioning models with real time information that gives a better view of the consumer’s ability to repay a loan. That’s important because 95% of those who have been denied a loan in the past two years want more insights into the lending process. People are willing to share secure access to their bank account data, if it means better interest rates, instant approval for a loan, improved chances of being approved for a credit card or to secure an increase in the limit on a credit card.
Lenders benefit, too. By augmenting traditional credit models with open banking, they can improve operational efficiencies, lower costs and create innovative new lending models that can give consumers the credit they deserve, when they need it.
The world is going digital
The data revealed in Mastercard’s Lend Report shows global consumer support for a more transparent, digital-first approach to lending. Read more about the future of lending in Mastercard’s Lend Report here.