An exclusive Tech Tribune Q&A with Peter Esparrago (co-founder and executive chairman) of FinLocker, which was honored in:
Tell us the origin story of FinLocker – what problem were you trying to solve and why?
The mortgage industry has always been a laggard in applying technology compared to the other financial services sectors. FinLocker was started with the goal of automating the very manually intensive and high-cost mortgage application and underwriting processes by accessing consumer-permissioned financial data from the source and applying analytics.
Based on customer feedback, FinLocker has evolved by moving its technology capabilities much earlier in the homeownership process, to when the consumer is still just dreaming of buying a home. FinLocker provides the tool and resources to help them achieve their dream by providing real estate search, mortgage and homeownership education, credit report and monitoring, financial account management, budgeting, mortgage readiness, streamlined mortgage pre-approval, and more.
What was the biggest hurdle you encountered in your journey?
FinLocker is a B2B2C. FinLocker sells its white-label platform to financial institutions, which they provide for free to their consumer customers. One of the biggest challenges is to serve and satisfy two “masters” – the financial institution and the consumer. Both have their own needs and objectives, and it was challenging to balance in the early years of our startup.
The mortgage industry is very compliance-driven, and businesses are very slow to change their processes and adopt new technologies. By demonstrating our platform to mortgage lenders, they could see the value to their business and their consumers.
What does the future hold for FinLocker?
FinLocker will continue to expand its market-leading technology capabilities to support consumers’ entire homeownership journey. Connecting lenders with consumers when they first start thinking of buying their first home, FinLocker can help consumers improve their credit, save for their down payment and closing costs, get mortgage ready to be strong applicants for mortgage approval, obtain insurance, and perform other home-related services. As homeowners, they can continue using FinLocker to help them to maintain their credit, start new savings goals, and keep them engaged with their lender so they can leverage their home equity for other financial needs, and more.
FinLocker started by first focusing on the mortgage industry. However, FinLocker’s customers utilize their FinLocker for all types of consumer financial transactions like auto loans, insurance, student loans, credit cards, consumer loans, and more.
What are your thoughts on the local tech startup scene in Missouri?
The St. Louis tech startup ecosystem began to develop a “critical mass” around the 2012-2014 timeframe, when key entities like Cultivation Capital (early-stage venture capital firm), SixThirty (fintech accelerator), T-Rex (startup space), Capital Innovators (tech accelerator), Arch Grants (startup funding), Yield Lab (ag accelerator), Arch Angels (angel investors), Stadia Ventures (sports accelerator), and more came into the picture. St. Louis is now recognized as one of the top tech startup ecosystems in the country.
What’s your best advice for aspiring entrepreneurs?
For entrepreneurs aspiring to do a startup: have a simple idea that is easily explainable, but you must have a legitimate “secret sauce,” be able to clearly identify your customer and have a large enough market that can support one revenue stream. Once you have identified your product or service, work with your initial customer(s) to co-develop your product or service.