Constant Energy Capital, a Falmouth-based financial services company that originates and services home-improvement loans, has released an AI-powered software platform to help banks and other lenders automate the provision of hardship relief to borrowers struggling to pay their bills.
The release of the software, called Constant.ai, comes at a time when the spread of COVID-19 has led to a rapid breakdown in the country’s economy, staggering unemployment figures, and what is expected to lead to a recession.
“Over ten million Americans have filed for unemployment against the backdrop of $16 trillion of consumer debt,” Catherine Powers, CEO of Constant Energy Capital, said in a statement.
Economic downturns like this inevitably lead to banks and other lenders receiving massive increases in incoming requests for hardship relief from borrowers.
“With mortgage forbearance requests alone increasing by nearly 2,000 percent, the COVID-19 crisis has shone a spotlight on the lack of preparedness to support hardship relief requests,” she said.
The solution that Constant.ai provides is to use AI-enabled automation to yield faster and more accurate decisions about payment deferrals, loan modifications and other workouts, which in turn will significantly reduce the massive incoming call volume and long wait times caused by COVID-19 financial hardships that a lenders’ customers are facing. Constant’s platform evaluates a borrower’s real-time financial situation and provides repayment options and, when appropriate, loan modifications in a matter of minutes, without human intervention.
As a lender itself, Constant Energy Capital began building the software for itself about a year ago. It wanted a tool to help it automate hardship-relief decisions during a recession in order to avoid the high costs of servicing distressed loans, Powers told Maine Startups Insider in a follow-up conversation.
“We knew a recession was coming, we just didn’t know when,” Powers said. “When the COVID-19 crisis accelerated consumer financial stress, our team made immediate system adjustments to offer the technology to other lenders and servicers.”
Innovation in lending had previously focused on the front end of a lender’s relationship with customers, essentially making it easier for consumers to access more credit faster and easier, Powers said. However, once loans are originated, she said the technology used for servicing them is “antiquated.”
“Offering, processing and documenting forbearance and more complex hardship relief is highly manual and paper-based. So we undertook the effort to build it ourselves with development starting mid-last 2019,” she said.
Aside from its own loan portfolio, the company has already gained some traction since releasing the product in late March. It’s currently finalizing contracts with three large non-bank loan servicers and are in talks with a federal government mortgage guarantor and a global technology platform company that has its servicing technology integrated with most major banks in North America, Powers said.
“All of these discussions are under confidentiality agreements. We’ll share more as they close,” she said.
