Hi Francesca, can you please start us off by introducing yourself to our readers?
Hi Jake, great to meet you! I’m the Francesca Carlesi, co-founder & CEO of Molo Finance.
Molo is a fully digital mortgage lender and the UK’s first. I’m a ‘new entrepreneur’, I started my career in banking, moving from different banks and worked in consultancy for McKinsey. You can say I’ve been converted to FinTech after seeing the good and the bad of banking and moved to the other side of the fence.
So, you moved from consulting & banking and Molo is your first foray into the start-up world, why did you do it?
The main reason is that I’ve always had the drive to do something more entrepreneurial. Everything that I’ve done in the past, even though it has been in big corporates, it’s always been about pushing myself and driving a big impact.
I’ve previously done a lot of digital projects in banks and I was looking for something where I could build something from scratch and really control it. I think the real trigger, I looked at the mobile market with a friend, who is now my co-founder, and we realized that it was a major opportunity which nobody had ever done before which was very exciting.
For me, it was the right moment in my life with the right partner, and it was a sense of “we’ve always wanted to do it so let’s go out and do it”, otherwise we would have regretted it.
Can you tell us a little bit about Molo Finance and what’s unique about your offering, especially compared to your competitors in the growing alternative mortgage lending space?
First of all, I don’t think we have any competitors! We’re very different from other digital mortgage providers.
Molo is a very simple concept, it’s the idea of taking the mortgage industry on the same journey that banking has gone. We’re a completely digital mortgage lender and we lend money to consumers to get a buy-to-let mortgage.
In doing that, we own the full customer journey. It’s really easy, all you need to do you go online, click a few buttons & submit your information, and you can get a mortgage quickly online.
Our aim was to fully digitize the whole mortgage process, making it paperless with real-time data validation, and provide a nearly instant decision. If you can open a bank account online in a few minutes, there’s no reason why we shouldn’t be able to do that for mortgages.
From a technical standpoint, how does the platform work?
Imagine it like an origination platform for mortgages, with the online journey for customers. They give us information online, we test and validate them in the back-end through an API, and we’re able to screen who we’re able to give a loan to or not. Instead of it taking ages with people, we’re able to do it with machines.
We’ve created a great front-end and customer experience but behind the scenes, we have a very heavy decision engine that assesses everything that you need to get a mortgage like creditworthiness, property valuation, affordability, fraud, compliance and everything else in between. If the user provides any additional information throughout the process, then we’re able to process it very quickly.
On average, how long does it take for somebody to get approved on the platform?
It can take 15 minutes, or less if all the information is there! For some people, of course, it’s not this short, but our promise to all customers is a decision within 24 hours.
It’s certainly quicker than the weeks it could take to get a mortgage traditionally.
Exactly. In the end, you don’t need to use any paper and it can be done as quickly or slowly as the customer wants.
What we find is that the majority of our customers are actually happy to do the whole process through their mobile, which was a surprise to us when we started the business.
Especially with the advent of mobile banking and open banking, with the API’s linking all financial apps to your bank so easily…
It was definitely a big surprise for us when we founded the company and we were doing market analysis ahead of it, our hypothesis was that people thinking that the decision to get a mortgage is a big decision in their life so they would probably start the journey on their mobile and end it sat down in front of their PC to make the final decision.
We realised that wasn’t necessarily true and a large number of our customers are happy to do the whole process through their mobile.
Do you think it’s been a challenge that mortgages, typically, have been done face-to-face and do you think it’ll take a long time for people to transition to digital-only mortgages?
I wouldn’t say it’s a challenge.
Everything, especially in FinTech, is transitioning away from strictly face-to-face. Clearly, there will be a transition period and it won’t happen overnight.
There will be people who will be ready today and those who will be ready tomorrow. People are becoming more and more digitally savvy and self-starting and we don’t expect everybody to migrate straight away. What we are noticing, however, is a huge demographic switch happening. We shouldn’t think just of our potential customers today, say 20% – 30% of the population, but of the young people of the future, many of whom don’t do anything without their mobile, so this share is shifting dramatically.
The other thing that I want to clarify, you said digital-only, but we are aware of the transition and we wouldn’t call ourselves ‘digital-only’ but ‘digital-first’. What that means is that we do have physical underwriters in-house and we have a customer support function in-house, as we are human after all.
Especially as a mortgage can be such a huge decision that some people will require that human touch in the process, especially people who are less digital-savvy.
Your customers, are they mostly London based at the moment?
Naturally, the reality is that the biggest uptake is in London and the South-East because the type of customers is more trusting of the online, digital-first mortgage.
We are also seeing a lot of uptake outside of London, but there is an imbalance. The mortgage industry, as a whole and especially buy-to-let, it’s very skewed to London and the South-East.
These two factors mean that we have the majority of our customers here in London and the South East, but we are seeing more and more people coming to us outside of these areas throughout England and Wales.
Molo was founded around 2 and ½ years ago, what’s been your biggest challenge?
I think the life of a start-up is full of challenges, but that’s why we like it and it’s part of the fun.
I’d say our biggest challenge has been people and the team in general. It’s so important that you need to continuously need to make sure that it’s right. What I’ve noticed as the company grows very quickly, not everybody grows with the company, and it meant finding the right people at each step of the company’s journey.
Firstly, hiring the right people with the right mindset is hard. Hiring for a start-up is tough, especially compared to a big corporate, because you can hire for right skillset and experience, but you need the right attitude and mindset. These things together are very rare, and it’s hard enough to find these people anyway.
Secondly, the right chemistry is key as well because we’re in a room and working closely together night and day, so you need people to like each other.
Thirdly, you have the growing pain’s effect, as you grow you need to add new people to the business with a different skill set as not everybody can grow with the business.
To expand a little bit on what you said about hiring, what are the characteristic of the people that you hire?
The first one for me is ownership, which I think is a must-have and non-negotiable for me. They need to be self-starters and take ownership of what they do, they care, passionate about what they do and be collaborative with other people in the business.
All of these things are the key things that I’m looking for alongside the ability to be resilient, which I think is important! We don’t want people who give up at the first hurdle as there will always be challenges in a start-up.
Resilience is always something that comes up when talking to hiring in a start-up, especially with all of the ups and downs.
Talking of ups, what are you most proud of in the last 2 and ½ years?
There’s a lot of things that I’m proud of as a lot of things are a first and we’ve been in uncharted territory right from the beginning.
If I had to pick one thing that I’m most proud of is that we’ve built a unique proposition in a mortgage market that nobody thought it was possible. Not only have we done it quickly but has also been highly recognised as a great thing.
When I started the company and started talking to people in the industry, there was a sense that we can’t really do as mortgages are “too complex, it’s not like banking, why are you doing it, there are brokers etc”.
One year later, after we went live, there was huge recognition from the same people that ‘this is the future’. That’s what I’m particularly proud of as it’s thought leadership and executing that first.
What I want to do is leave a mark, and we’ve opened up a new way to change the mortgage industry, one step at a time.
You said that you want to change the mortgage industry, but what the ultimate goal? Looking back in 10 years, for example, what impact would you want Molo to have on the mortgage industry?
There’s a lot that can be done.
The ultimate goal is to give back access to property financing in a much more affordable way to almost everybody.
We should use technology as a means to an end, we’re not developing a digital proposition for the sake of creating a digital proposition.
This is about giving better customer outcomes, experience and access for customers which is fundamental.
Homeownership is one of the biggest problems in this country, and by leveraging technology to help a fundamentally obsolete market we take out a lot of the cost in the market and make it easier and accessible for people get mortgages.
We want to be able to use real-time data to analyse and give mortgage assessments based on what they’re worth and give them the best price possible. The technology platform that we’ve built is saving us a lot of costs, which means that we can give the saving back to customers as well.
It means a better experience for our customers, enabled by our technology, that allows us to radically change the mortgage industry.
Finally, what are your future plans? Do you plan on offering more than buy-to-let?
Well, it’s not a mystery. I think it’s known that it’s going to happen. Molo wasn’t born to offer just buy-to-let. We do look at the mortgage market as a whole and buy-to-let is step one, which is different from everybody else and it’s easier to digitize.
There’s a lot of positives that have allowed us to accelerate time-to-market.
Watch this space!