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What experts are saying about platform technology and why it’s a must-have for banks

Hitting the right notes with composable tech.

If you ever want to be minorly freaked out, do a quick search for videos of suspension bridges. We think of them as solid structures, but they’re actually quite flexible. They can sway and move. It’s a little unsettling to see in action, but having that flexibility is exactly what helps them be adaptable and resilient in changing conditions.

The same is true with banks. The more flexible — and adaptable — they are, the more resilient they become. Flexibility allows banks to pivot in changing markets, to mitigate risk and take advantage of new opportunities.

Change has always been a constant in the banking industry. And as of late, the conditions in the industry have been shifting quite a lot. Rising interest rates, increased customer acquisition costs, and more competition from neobanks are highlighting the need for more resilient institutions.

With these topics being top-of-mind for many in the industry (including us), we sat down with guest speaker Jost Hoppermann, Principal Analyst at Forrester, to better understand what banks can do to help safeguard their future success.

In our illuminating talk — Building Agility Through Platform Architecture — Hoppermann shared insights he’s learned through research and conversations with industry leaders. If you’re curious to learn more, you can see the talk in its entirety below.

Readdressing resilience

According to Hoppermann, the two primary things banks and other financial institutions need to pay attention to in order to achieve resilience are:

Technology – Traditionally, banking software has primarily served as a system of record. Though legacy systems excel in those areas, they aren’t particularly malleable. Investing in tools — like banking platforms — that are easily upgradable, with interchangeable parts, helps banks stay agile in changing conditions.

Business models – With competition for new customers higher than ever and margins shrinking, solely relying on traditional revenue streams isn’t enough to safeguard future success. Hoppermann suggests banks will need to expand into things like invisible banking — which require more modern technologies to work — in order to maintain healthy businesses.

Investing time and resources into these different areas allows banks to bend without breaking, making them more resilient and able to change with evolving market, and customer, expectations.

What defines a banking platform?

In our chat, Hoppermann surfaced a few key features banking platforms should have in order to provide the most value to banks. First, Hoppermann notes they need to integrate with legacy software.

Second, he notes that platforms should be modular in design, meaning the platform should be a collection of applications. Further, he notes these applications need to be “cohesive and decoupled.” Essentially, they should have the ability to interconnect but not be totally dependent on one another.

Last, they must have the ability to send and receive information. Having those capabilities allows banks to create a better customer experience by reducing the amount of effort required for a customer to sign up for another product.

Challenges to adoption

Even with the clear benefits of banking platforms, there are a few challenges that are slowing adoption. The most common challenges are technical, financial, and cultural. On the technical front, legacy systems don’t always integrate well with newer banking platforms. Because of this, integration can be resource intensive.

Being a resource-intensive process also means that there’s a decent upfront cost to adopting a banking platform. As margins in banking decrease, so do budgets, making it a tougher sell to executives who are trying to conserve cash.

Along with the financial and technical challenges, there are also cultural challenges that some institutions face. Handling people’s and businesses’ money is a big responsibility. Because of that, banks have traditionally been slow to adopt new technologies as they represent some amount of risk.

Even though the risks are valid, in order to keep up with customers’ wants and needs, it’s important for banks and other financial institutions to be open to adopting new technologies. Without the investment, it’s possible current and potential customers will look for alternative options.

Embracing new technologies

Being able to keep pace with customer and market expectations is key for continued success. Through the flexibility and agility offered by modern banking platforms — like Blend’s Builder Platform — banks and credit unions are able to continue to meet customer needs and keep pace in a changing market. Better positioning them to be able to serve customers for many years to come.

Why now is the time for banks and credit unions to go all-in on composable tech innovation

Speed. Flexibility. Agility. Are you and your technology future-ready?

Anyone who’s plugged into the tech world has no doubt recently heard of “composable solutions” or some iteration. From retail to healthcare, industries are increasingly trading in the cumbersome, monolithic tech stack for its more digitally-relevant descendant: composable infrastructure.

But what exactly is composable tech? Why has it been popping up in your feed? And most importantly, should the financial services industry start embracing it across the board? 

The answer is a resounding yes. And here’s why.

Meet composable, the new kid on the (building) block

By design, composable solutions are flexible, customizable, and can continually and quickly evolve to meet customer needs. Think of composable tech as a Lego-like structure — blocks can be easily swapped in and out as needed for limitless designs.

So what does this mean for banking? The ability to harness the power of cloud computing and open APIs allows banks to treat change for what it is: a constant. This adage rings especially true in financial services, where market volatility and up and down turns are the norm. 

Gone are the days of a one-size-fits-all tech approach. Composable banking is tailor-made — if every financial institution had a team of tailors sitting in the office.

Banks can take advantage of pre-built integrations to existing tech that is commonly used in the financial services industry: core banking systems, loan origination systems, CRMs, online banking platforms, and more. These integrations make it possible to create service-aligned blocks that can be combined into various workflows.

The best part? Those components can be combined and recombined to meet each new product iteration’s requirements.

Composable banking tech represents a paradigm shift in the way banks operate, and where there’s a paradigm shift, there’s opportunity.

But why now?

Ferris Bueller said it best way back in 1986: “Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it.” 

We’re living in an age of radical technological innovation. And we can already see that the companies not taking time to take stock of their digital capabilities are on track to miss out on a serious opportunity to thrive. Just look at the past three years.

The COVID-19 pandemic, the tidal wave of Paycheck Protection Program (PPP) loans, the rise of AI in the banking world, digital regulatory compliance concerns, and the current economic climate following the sharp market downturn in 2022 have all underscored the importance of future-ready banking technology. 

Banks that were relying on legacy tech infrastructure, and even institutions that were using an amalgam of legacy and modern technologies, found themselves racing to provide the digital banking capabilities customers required. And although the threat of COVID-19 has largely disappeared, the consumer demand for digital-first banking is here to stay.

Digital-first = customer-first

The confluence of new, digital native consumers gaining wealth, increased competition from newcomers to the financial services world like Apple, and the rising prevalence of the experience economy, where companies like Netflix have set the customer-first standard, is adding to an already challenging climate.

Even if banks make enough changes to their tech stack to meet the rising digital-first expectation, it won’t really cut it unless they can provide those services in lockstep with the accelerated pace of change. In other words, banks that will thrive will be those that are able to design and deliver new products faster than ever.

The time is ripe for composable — don’t miss out

Take a good look at your current tech stack. Is it slow to iterate and scale to new markets and channels? Is it too slow to provide a modern customer experience? Is it expensive to update and operate? 

If you answered yes to any of those questions, it’s likely time to take a look at a composable solution. In December 2022, Gartner predicted that 60% of financial institutions would be looking for composable solutions by 2024 — and that companies who trade in rigid legacy tech for composable’s innate flexibility could see as much as a 30% increase in revenue.

As banks struggle to maintain or even achieve primary financial institution (PFI) status, offering deposit account, home equity, and all manner of financial services powered by composable origination can make all the difference.

3 best practices to get your borrowers clear to (e)close

With more lenders incorporating digital closings into their library of offerings, you’ll want to make your eClosing experience one to remember.

Traditional, in-person closings are becoming a thing of the past. Fully digital experiences are now expected by consumers during the mortgage process, and you do not want to be the one lender that doesn’t offer them. In fact, a majority of consumers (79%) would be willing to eSign some or all mortgage documents. By providing eClosings, you open your business to more borrowers, can increase pull-through rate (meaning close more loans), and save some significant time.

It’s likely that many of your borrowers will have never been through an eClosing and will look to you as the source of truth throughout the process. To ensure they have the best experience possible, incorporate these best practices into your mortgage experience.

Provide a guided, transparent loan process

Some borrowers may be hesitant to move forward with digital closings. If they’ve never done one before or weren’t aware it was even an option, they likely don’t even know what the process entails. To ease their worries, clearly communicate what’s going to happen before it even happens, offer guided assistance throughout their closing, and give them full transparency about their mortgage. Educating borrowers about their loan process helps eliminate uncertainty and can give them the confidence to continue with their closing, ask questions, and be responsive.

Here are a couple of strategies to help you provide the guidance borrowers need:

  • Record a quick video covering the eClosing steps
  • Outline what to expect in a step-by-step guide and include screenshots of the borrower portal
  • Create a script that loan officers can use to describe what borrowers can expect

Offer flexible closing choices

While some borrowers are comfortable with a fully digital experience, others may like to meet in person. Depending on your customer base, incorporate a solution that gives you the choice between hybrid closings or RONs — like Blend Close. By having more flexibility with closings, you may reach a wider pool of borrowers you never have before, and not offering these choices may make you lose these opportunities.

Eclosing management product screenshot

No matter which type you choose to offer, establish expectations with your borrowers for each type of closing. Help prepare them as much as possible with your mortgage tech by allowing them to review and sign closing documents remotely. Even with traditional closings, Blend Close allows borrowers to do this ahead of their closing day.

Review of closing documents product screenshot

Maintain an open line of communication

Some may argue there’s no such thing as overcommunication. No matter where they are in the mortgage process, it’s important to keep in touch with all parties involved in the mortgage process — but it’s especially necessary during closings.

Stay easily accessible to your borrowers and agents. Communicating on a single platform like Blend Close helps everyone stay on the same page, stay connected, and understand what’s going on with the loan and closing. When you’re working and communicating on separate platforms, your, your borrowers’, and their agents’ experiences may be disjointed.

Ensure successful eClosings with an intuitive platform

Achieving successful eClosings is easier when you leverage a dynamic, intelligent closing solution that helps your borrowers get through to closing quickly and efficiently.

With Blend Close, you don’t have to make your borrowers leave the Blend Mortgage Suite or waste time completing manual tasks or correcting signing errors. And by implementing this product solution, you can even increase your pull-through rate. In fact, Blend has a 93% average eClose completion rate across all customers. Don’t fall behind your competition. Join the 135+ lenders that have signed on to offer their customers a digitally-enabled closing experience through Blend.

Blend’s first quarter momentum

When our customers win, we win with them.

We’ve always believed that our customers are best positioned to win in a downturn when leveraging technology that helps save costs, grow market share, and innovate faster.

Today we are seeing this play out in practice with our Q1 earnings results.

The headline is: we’re growing our mortgage market share alongside our customers, we outperformed our total company revenue guidance, and we expect to see continued positive momentum in Q2 and beyond.

We credit this outperformance to our valued customers, who have shown their strength and resilience during an extremely challenging period painted by compressed margins and heightened competition.

The strength of our customer base

Despite the market headwinds, our mortgage customers continue to increase utilization, and are winning market share as a result.

We saw ongoing adoption of our Mortgage Suite add-ons, allowing more customers to benefit from our cost-saving features like soft credit pull capabilities and automated condition management.

This increased utilization is helping to drive the growth of our total funded loan volume. Blend’s mortgage banking software processed 23.2% of the total market originations based on Mortgage Bankers Association data in the second half of 2022, up from 14.5% in the second half of 2021.


Graph showing Blend funded loans and total market share 2019-2022

Building and Capturing Mortgage Market Share

This growth included two of our larger lenders, including Atlantic Coast Mortgage, who recommitted to Blend after using one of our competitors but coming back to us for the richer set of capabilities we offer and the benefits our platform delivers to them.

We’re also making early strides in growing our consumer banking suite. We closed the quarter with $5.2 million in revenue, up from $3.9 million in Q1 2023, and expanded our partnership with Navy Federal Credit Union.

This is one of our largest deals ever, at a critical time for institutions striving to grow deposits. Navy Federal will soon power a multi-channel digital account-opening process for new membership through the Builder platform, all made possible by Blend Builder.

We are also evolving our model by accelerating our time to value for customers, and by helping them serve their consumers better and cheaper than would otherwise be possible. We believe Blend Builder will provide a meaningful benefit here, as we leverage the power of Composable Origination to simplify and accelerate our deployments.

Pacing ahead of schedule on our path to profitability

On our total company revenue, we came in well ahead of expectations. We achieved $37.3 million, beating the top end of our guidance by 7%. We believe this validates the strength of our deepened wallet share, even with a small outperformance on loan volume. The growth in our Consumer Banking Suite also benefited from a stronger than expected home equity volume in the last month of the quarter.

Our revenue momentum is also contributing to our accelerated path to profitability which is essential not just for Blend as a company, but for our customers, team members, and shareholders. The cost improvements we made earlier this year have strengthened our operations, without compromising investments in our customer base and product innovation. And this quarter, we’re beginning to see these cost improvements make a big impact on our bottom line.

We came in well ahead of our expectations on operating expenses improvements, with a sequential improvement of $11m from last quarter or $21m from the same period last year. We have over $307M in cash to continue to fund our operations, giving us ample runway and liquidity based on our current outlook.

Graph showing Blend's operating expenses in millions for 2022 and Q1 2023

Showing progress to date on cost efficiency initiatives (all figures are Non-GAAP)

Our software gross margin was approximately 75% in the first quarter, up from 72% for the same period last year. Our gross margin improvements reflect the continued cost optimization programs we’ve implemented, the benefit of higher margin Consumer Banking revenues, and the continued expansion of our mortgage product through innovation and the enablement of additional feature sets.

A brighter future ahead

Looking ahead, we’re conservatively optimistic about the tailwinds we’re observing. We expect Q2 platform revenue to be even better than Q1, and have increased our Q2 revenue guidance to reflect this.

We’re making material, visible progress towards our path to profitability. We are dedicated to our mortgage customers, who are showing their strength through these tough times. And we believe Blend Builder is the infrastructure to create massive value across the banking software stack for our customers.

Our customers need the innovation, speed, and cost efficiency of our technology now more than ever. We are a critical partner in helping them grow market share, and we won’t stop until every aspect of the way banks originate products becomes digital and data driven.

To learn more about our earnings results, visit


Forward-looking statements and Non-GAAP Financial Measures

This blog post contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or Blend’s future financial or operating performance. In some cases, you can identify forward looking statements because they contain words such as “may,“ “might,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “would,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern Blend’s expectations, strategy, priorities, plans or intentions. Forward-looking statements in this blog post include, but are not limited to, statements regarding Blend’s financial condition and operating performance, including its outlook, market size and growth opportunities, capital expenditures, plans for future operations, competitive positions, technological capabilities, strategic relationships, Blend’s opportunity to increase market share and penetration in its existing customers, projections for a sharp decrease in mortgage loan origination volumes, other macroeconomic and industry conditions, Blend’s ability to create long-term value for our customers, and Blend’s expectations for revenue growth. If any of the risks or uncertainties related to the forward-looking statements develop or if any of the assumptions related to the forward-looking statements prove incorrect, actual results could differ materially from those projected, expressed, or implied by our forward-looking statements. The forward-looking statements contained in this blog post are also subject to other risks and uncertainties, including those more fully described in Blend’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2022 and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2023. All forward-looking statements in this blog post are based on information available to Blend and assumptions and beliefs as of the date hereof, and Blend disclaims any obligation to update any forward-looking statements, except as required by law.

In addition to financial information presented in accordance with U.S. generally accepted accounting principles (“GAAP”), this blog post includes certain non-GAAP financial measures. These non-GAAP measures are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP. There are material limitations associated with the use of non-GAAP financial measures since they exclude significant expenses and income that are required by GAAP to be recorded in Blend’s financial statements. Management encourages investors and others to review Blend’s financial information in its entirety and not rely on a single financial measure.

This blog post contains statistical data, estimates and forecasts that are based on independent industry publications or other publicly available information, as well as other information based on Blend’s internal sources. This information involves many assumptions and limitations, and you are cautioned not to give undue weight to such information. Blend has not independently verified the accuracy or completeness of the information contained in the industry publications and other publicly available information. Accordingly, Blend makes no representations as to the accuracy or completeness of that information nor does Blend undertake to update such information after the date of this blog post.

The what, why, and how of Composable Origination

How a modular approach to origination can revolutionize your business.

So, what exactly is Composable Origination?

Composable Origination is a new approach to lending that fundamentally changes the way banking products are processed and delivered.

This approach is based on the idea that lenders can break down the origination process into smaller, modular components that can be assembled and customized to create an origination process that fits the specific needs of individual lenders and borrowers.

Why do I need it? 

While the majority of banks and credit unions offer consumers a way to open a checking account or get a loan online, it’s often still a cumbersome and time-consuming process. Even if you’re a current customer you’ll likely find yourself navigating frustrating paper-based processes, manual steps, and prompts that ask you to pick the phone or come into a branch. And after all that, it can still take days or weeks to get approved.

For the lender this includes application processing, underwriting, documentation, and funding. These tasks often require significant manual effort and are prone to errors and delays, which can be frustrating for both lenders and borrowers.

It’s not that financial institutions aren’t technically savvy or lack the vision to serve their customers a modern origination and onboarding experience. They’re burdened by their existing infrastructure. Legacy systems can be difficult to integrate with newer digital platforms, leading to a disjointed experience for borrowers.

It’s not that financial institutions aren’t technically savvy or lack the vision to serve their customers a modern origination and onboarding experience. They’re burdened by their existing infrastructure.

Additionally, origination often involves multiple departments within a bank, each with its own set of workflows and processes. Digitizing these workflows can be difficult because it requires coordination and cooperation across departments.

This makes it all the more challenging to offer consumers the personalized, proactive and simple experiences they’ve come to expect. Meanwhile digital-first banks and tech entrants without these challenges can offer a loan or deposit account in just a few taps.

Unfortunately today’s out-of-the box origination solutions don’t fundamentally solve these challenges. They act more like a digitized paper application with little room for customization or integration with the latest technology.

However, with Composable Origination, lenders have the flexibility to build a streamlined, custom process that leverages the latest technologies and industry best practices.

Composable Origination unlocks lenders’ ability to deliver financial products like a tech company.

How does it work?

At its core, Composable Origination is about breaking down the loan origination process into a set of modular components that can be assembled and reconfigured as needed. These components can include things like data validation tools, credit decision engines, document management systems, and more.

At Blend, we enable Composable Origination on the Blend Builder Platform. The Platform includes the modular components, APIs, orchestration layer, and data tools necessary to deliver custom origination experiences at scale.

What are the benefits?

1. Increased flexibility

By breaking down applications into smaller, independent components, Composable Origination enables developers to modify, replace, or add new features to an application without disrupting the entire system. Additionally, it enables lenders to move away from monolithic, one-size-fits-all loan origination systems. This approach also allows lenders to experiment with new tools and technologies without disrupting their existing systems

2. Increased customization for lenders and customers

With a composable process, lenders can customize the origination experience to meet their specific needs. For example, they might choose to incorporate a third-party data provider to verify borrower information, or they might use a machine learning-based credit decision engine to automate the underwriting process. They can also easily incorporate the latest and greatest technology features specific to their customers’ unique needs.

3. Scalability

Composable Origination enables FI’s to scale their applications by adding or removing components as needed, without affecting the rest of the system. This means that businesses can easily adjust to changing traffic levels and user demands without sacrificing performance or reliability.

4. Reusability

Composable Origination promotes the reuse of existing components across different applications, reducing the need for developers to build new functionality from scratch. This not only speeds up development time, but also ensures that applications are built with a high degree of consistency and reliability.

5. Agility

With Composable Origination, businesses can more easily experiment with new features and functionality, as well as quickly iterate on existing ones. Additionally, Composable Origination can be more adaptable to changing market conditions and regulatory requirements. As lenders face new challenges and opportunities, they can quickly modify and update their loan origination process to stay ahead of the curve.

6. Lower costs

Another benefit of Composable Origination is that it can help lenders to reduce costs and increase efficiency. By leveraging pre-built components and services, lenders can avoid the time and expense of building everything from scratch. They can also automate many of the manual steps in the loan origination process, freeing up staff to focus on higher-value activities.

As lenders face new challenges and opportunities, they can quickly modify and update their loan origination process to stay ahead of the curve.

In summary 

Composable Origination represents a new frontier in banking technology. It enables financial institutions to flexibly build and scale applications that can adapt to changing market conditions and customer needs. With Composable Origination, lenders can finally transform their origination process and provide a better experience for borrowers.

How to attract deposits in a competitive banking market

Instant gratification and convenience.

There are some headwinds in the banking industry today that have put a greater emphasis on trying to capture the right customer while keeping existing customers happy, all while properly managing the balance sheet. When interest rates were low and steady, it didn’t matter as much for deposit accounts because there were fewer rate shoppers and people needed to put their cash somewhere. Account balances increased, credit rates were low, and all was good. That was then, but this is now.

Most customers have multiple relationships with different institutions, and choosing a primary institution can be challenging. Oftentimes it seems that FIs go out of their way to ensure that their institution does not earn primacy, simply by creating complex and inefficient onboarding processes that either lack modern technology or are hindered by bank policy. Too often, customers will open a new account with the best intentions, but then end up forgetting about it unless they’re able to see the value of putting your institution at the center of their financial journey.

So, why aren’t customers aren’t making your bank their primary financial institution? It might have started at the very beginning. Of customers who opened a new account,  61% did not immediately fund their account and only 37% self-provisioned for mobile or online banking¹. It seems that this is a problem and should be a much higher percentage.

If banks want to capture customers at account opening, they must promote the account to fund and set up access at the time of account opening, not down the road when banks may have forgotten. Also, adding online and mobile banking with bill pay, switching over or setting up direct deposit, and providing digital wallet setup should happen before the customer navigates away from the onboarding process.

¹IDC Financial Insights North American Consumer Banking Channel Preference Survey, January 2023 n=2750

Here are a few ways to ensure that both new customer conversion and immediate onboarding are optimized:

  • Personalized outreach that provides incentives that are suited to the needs of that individual and can deepen the relationship
  • A modern website that adapts to the device being used by the individual at that time
  • Efficient experiences with the ability to utilize multiple touchpoints to provide necessary documentation (i.e., camera on phone to upload license or desktop computer to upload PDF or scanned images)
  • Workflow optimization that allows bank employees and customers to fully understand where they are in the process, particularly for those requiring approval and additional documentation
  • Proven value propositions of working with your institution, including educating customers on the safety of banking with you, on your commitment to the community, and that you value their time
  • Self-service provisioning with a few clicks to allow new customers to set up a digital wallet, which is particularly helpful for immediately funding a deposit account; if a debit card is provided, that can also be easily added to the digital wallet of their choice
  • Investing in digital and finding ways to improve the digital experience by deploying innovation in a low-code environment that leverages existing workflows and the use of best practices learned

These are just a few ideas that will help institutions stay competitive and create more lifetime value for their customers in our current economic environment. Modern and efficient digital access that can leverage multiple touch points — mobile phone, website, tablets, branch visits, or conversations with a specialist — will mean the difference between having someone just add another checking account or having someone add their new main checking account relationship. Without a simple and intuitive process, the industry will struggle to get beyond the 61% of customers opting to not immediately fund their new deposit account. Once funded, give the customer an easy path to make your institution their go-to account for their current and future financial needs.

Next webinar: 10a.m. PT on February 2, 2023
Mortgage Power Up: Thrive in a Tough Market
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