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Chicago Fintech Links Lender Websites to Provide Verified Help to Borrowers

BMO Harris Bank loan collectors have a new tool to help people who are late with payments: a link from the bank’s website to a carefully vetted list of nonprofits and agencies nearby government agencies that can provide assistance such as heating assistance, prescription discounts and food assistance.

The service, which is free for bank customers, comes from a fintech startup called SpringFour which, like BMO Harris, is headquartered in Chicago.

“We believe that when people struggle financially it’s because something is going on in their lives, which makes it important to provide financial institutions with a way to connect and help people get back on track. on the right track,” said Rochelle Gorey, CEO and co-founder. by SpringFour. She got the idea while consulting with a mortgage agent who had a database of foreclosure laws by state.

“What if we could arm them with a list of nonprofits and government agencies that could help in all these different localities where loans are in arrears.”

During the explosion of foreclosures that followed the global financial crisis, consultants knew there were resources that landlords did not. People behind on loan repayments should contact their lenders or credit card companies to see what can be done to lower interest rates or refinance, Gorey said.

“There has been a lot of progress in the industry, and banks are realizing that it makes sense to work with borrowers before they embark on a foreclosure. We are now seeing more single points of contact at the within departments or banks regarding foreclosure information, although there is a lot more to be done. I think it will take a very comprehensive effort; helping borrowers connect to local resources is a good step, but it does not happen enough.

There has been far too much emphasis on financial education and budgeting, she added. “If you’re living paycheck to paycheck, that doesn’t help.”

SpringFour provides direction to agencies and the Deputy Government Office as close to a customer’s zip code as possible. It covers 25 categories of assistance ranging from immigration support to home repair loan and grant programs and legal services. He finds food, finance and employment to be the top searches.

COVID-19 resources added

In response to the pandemic, it has added 2,500 Covid-19 resources, including food banks and government benefits and Covid-19 financial resources such as information on unemployment benefits, small business assistance and loans and grants.

The business is a B corporation, which means it must demonstrate that it has a positive social impact and meets certain business practice criteria, including environmental impact.

Financial companies — banks, auto lenders, credit card companies, fintech lenders and mortgage companies — pay for the service based on the number of seats using it, not the number of referrals. It’s cloud-based, so businesses can link to it and not worry about integrating it with existing technology.

“Last year we did 1.2 million referrals, and so far this year we’ve done over 4 million, May was our biggest month with half a million.”

BMO Harris has it on its COVID-19 page and has seen a 500% increase in referrals, she added.

“People want to know where to go for help, and there are a lot of scams. We want to make sure we provide reliable resources.

SpringFour currently offers information on over 15,000 social, government, and community service nonprofit organizations that have been carefully assessed and approved.

The company participated in BMO Harris’ first fintech mentorship program, said Ben Schack, head of digital partnerships at the bank.

“During this program, we got to know them outside of a sales cycle, which gave us the opportunity to get to know the management team and the product. This is well aligned with our brand. which promises that we are here to help.

The bank also saw a business case in improving repayment rates in tough times, like the government shutdown in 2018 that impacted federal employees, and now COVID 19.

“We can make SpringFour resources highly available to our customers when they need them,” Schack added. “We’ve measured customers who accept SpringFour referrals and they’re much better able to actualize their loans.”

Customers can find SpringFour on the website, but it’s often at the suggestion of a collections representative during a call.

“We intuitively know that if a customer is unable to pay a car loan or mortgage, that’s probably not the only problem they have. During the conversation with a customer, the representative may tell a customer that they seem to be having trouble with their expenses and offer to help an approved nonprofit or government organization. SpringFour could direct them to financial advice, but also to resources that could help them cover their utility costs, food costs or medical expenses.

Customers are pleasantly surprised that a bank offers help, he said. Several said they had never heard this from a bank before. A borrower who had fallen behind on a car loan told the collections representative on a follow-up call that he used SpringFour’s referrals and got a job and would soon be back on his feet and working. payment day.

“Collections conversations aren’t easy for either party,” Schack added. “I think our agents appreciate being able to offer real help at a time when customers need it.”

The obvious place to use SpringFour is in collections and loans, Schack said.

“During the pandemic, we have positioned SpringFour as part of our COVID messaging and have seen a surge in usage. More and more we’re seeing that while collections can be the natural home, our customer experience team is certainly interested in how that works, and we’re also talking about product usage in loan conversations and the general financial health.