BBVA API Market
Buying a home is one of the most stressful activities people face. The need to seek information, make decisions that will affect the future, or uncertainty about the conditions of granting a mortgage may deter the buyer. Open banking offers services that consolidate the process of buying a home.
Open banking and one of its key tools, APIs, is able to respond to many of the questions facing those looking for a home: Can I afford to buy this apartment, under what conditions would I take out the mortgage? APIs such as Mortgages simplify the home buying process by simulating mortgage conditions and make it possible to start contracting it through your own interface.
To understand how open banking influences the process of buying a home, the first point is to break down what it is. Actually, it starts long before a prospective buyer goes to look at a flat—or at least it should. The ideal process would be:
It is optimal to first analyze the economic capacity that you have as a home buyer. But this point involves going to the bank branch and asking, based on the level of disposable income and savings, what that capacity is.
Banks such as BBVA allow this consultation to be carried out online and can guide the buyer by offering different possibilities depending on the amount of the home and the repayment period. However, this is usually not the way you start looking for a home.
Usually, buyers go directly to real estate websites, prioritizing their wishes and what type of home they want before their capacity, which is often unknown to them. And this lack of knowledge can entail a break on the purchase (uninterested because unsure) or an unsuccessful purchase attempt (asks for information but is then unable to make the purchase).
This behavior is perfectly understandable. In short, buying a home is a process that is usually faced once or twice in life and most of us are not real estate experts. However, the buying experience can be further improved and customized to make the whole process easier.
Open banking has shown this, thanks to APIs such as BBVA API_Market Mortgages and other related services. The objective of these systems is, on the one hand, to provide information to the buyer about their profile and economic capacity and, on the other hand, to show them simulations that will help them get a clearer idea of the conditions of contracting their future mortgage, before contracting it.
As highlighted at the Open Banking World Congress 2020, open banking has been able to meet user needs through APIs, as is the case of Mortgages in home buying (and Auto Loan in the case of vehicles). Both interfaces allow the user to simulate, within the platform itself, different mortgage or credit scenarios.
Thanks to these tools, the buyer does not need to leave the real estate platform and go to the bank to check those conditions related to the mortgage. Instead, the API can be integrated into the information request process and allows you to run simulations until you find a mortgage payment that suits your needs.
The future buyer will be able to check different variables such as payment fees month by month until the end of the mortgage, or the interest applied. In addition, a full evaluation of the customer will be carried out and a certificate will be obtained for it.
One of the great advantages of these APIs is being able to generate a simulation that is not only realistic, but binding, that the user can sign. This is the case of Mortgages, which generates a mortgage contract that you can sign without having to go to a bank branch and without leaving the purchase process in stand-by.
This way of simplifying banking interaction within the platform itself also significantly improves the purchasing process and removes some of the hurdles that appear in such high-value purchases. The user will have more information and will be able to make smarter decisions.
By 2018, cell phones had become “the top device used to search for a home”, according to data from Posizionarte. Although the purchase tends to be completed on a computer when it is online, according to the report ‘IAB Spain Mobile Marketing Annual Study’ (2019), the information search continues to be done from a cell phone.
Cell phones have become the default platform for querying and sharing information, which is why APIs should facilitate integration with responsive platforms or directly applications. The user wants to have all the information in the palm of his hand, and operate based on it without having to change device.
Open banking has changed the experience of buying a home, especially during the pandemic. Thanks to banking APIs, this process has been simplified for the user and the platforms that make use of these systems benefit from this simplification.
The automotive industry is possibly one of the least digitized. This situation is particularly significant in car dealerships, where the purchase and financing process continues to be done in the traditional way. However, APIs can give a new impetus to this service by offering an innovative product and a new experience to their customers.
The PSD2 regulation opened up banking infrastructure to third parties and revolutionized banking as we know it. Particularly as regards contracts for products whose rules seemed set in stone, such as mortgage applications. Thanks to APIs, this can be done entirely online, without going to a branch and minimizing friction in the process.
The real estate sector is becoming digitized by investing in technological solutions to adapt to a user looking for simple processes and transparent documentation in the purchasing processes.