Technology

Peermatch's approach is to supply the user with self-explaining tools to experience mortgage lending in a mobil and self-determined way.

The Peermatch app is a hybrid. 

This means, that the app combines the advantages of native apps with those of web apps. It is like a 'four-wheel-drive car'. Its chat function is thus accessible for all users on all common stationary and mobile devices. Users with iOS or Android devices are able to enjoy the native features in addition; with push-notifications they are a bit closer by.

Mortgage lending needs a lot of consultation. During the credit process there is a high degree of coordination. Borrowers have to verify their given information by submitting documents. First-time borrowers are usually overwhelmed by the seamingly complex demands. Additionally there is uncertainty. What happens with my data? How can the  demand for information by the lender/loan investor (i.e. income of the borrower) be in balance with privacy? What about bank secrecy? Peermatch addresses this with 'CCSE' (short for 'Cryptograhic Chat Search Engine'): All communication, consultation with our highly qualified specialists and the frictionless sharing of documents is run through the proprietary chat function. Data is  secure by applying industry-standard encryption technology. Hence a first-time borrower can experience mortgage lending in a simple and safe way. Without forms. Without visiting a bank branch.

In a pre-internet world the core task of banks was to act as a 'middleman' in the transformation of money; in an anonymous mass society they were the 'connectors' between borrowers and the capital market, which in fact is the sum of many savers. Banks either received central bank funds or callable funds from savers and lent this money to borrowers or created investment products out of these secured mortgage loans, which were sold to savers. Initially with the covered bond, invented in the 18th century, the risks were kept on the bank balance sheet. In the 1970s securitization structures were invented, which took the risks off-bank-balance sheet in order to relocate them into 'special-purpose vehicles'. The event of the financial crisis of 2007 damaged the trust of loan investors in those investment products.

The investment products offered by banks also have the disadvantage, that the choice of loan products a borrower is looking for when visiting a bank branch is limited - especially regarding the terms of a loan. The 10-year loan has been the standard for German borrowers so far, because the standard refinancing was traditionally supplied by 10-year covered bonds. On internet platforms the customer can compare and choose among many banks, but one can choose mostly only the rate; regarding terms or other features of loans, there is not much choice. This is where Peermatch comes in with PTSL ('Pass-Through Single Loan'): The peer-to-peer technology conducts the transformation between borrowers and savers; now technology is the 'connector' and makes loan products possible, that are innovative and very customer-friendly. PTSL opens up more choices, rather than just in selecting the best rate on a 10-year loan.

The Peermatch approach is extremely cost-efficient.

Banks have high costs with the issuance of their investment products (covered bonds, ABS) - alone the costs for the concept, the prospectus and rating are immense. Peermatch does not have those costs and hence loan investors can enjoy a higher yield. 


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