L-Bank launches digital funding approvals for home loans via KfW platform

• DZ BANK and LBBW as pilot partners
• Private clients and savings banks, plus cooperative and Raiffeisen banks benefiting from trend towards digitalisation

Getting promotional loans faster: Together with its pilot partners DZ BANK and Landesbank Baden-Württemberg (LBBW), L-Bank is launching digital funding approvals for its home loans. Connecting to KfW's “Bankdurchleitung Online 2.0 (BDO)” promotional funding platform allows Baden-Württemberg's banks and savings banks to issue funding approvals at the push of a button, directly during a consultation regarding L-Bank's housing products. L-Bank is now Germany's first promotional institution at federal state level to provide clients of the German Savings Banks Finance Group (Sparkassen-Finanzgruppe) und the German Cooperative Finance Group (Genossenschaftliche Finanzgruppe) access to immediate, web-based commitments for their promotional loans. Digital funding approvals are already standard for KfW's nation-wide housing products.

The new service makes it easier for private individuals to obtain a promoted home loan. This simplifies matters for clients of the 52 savings banks and 206 cooperative banks in Baden-Württemberg. Local bank advisors can apply to L-Bank for loans and immediately receive a financing decision even during the consultation with the client as part of a fully web-based process. The client's bank sends the data via KfW's promotional funding platform to L-Bank, where it is reviewed and a decision is reached automatically. The amount of time that private builders or property buyers need to wait to obtain a funding approval is reduced from two or three banking days to just a few minutes. In this way, immediate funding approvals provide certainty for planning purposes at an earlier stage. Digital funding approvals can be used for L-Bank's “Wohnen mit Kind” and “Wohnen mit Zukunft: Erneuerbare Energien” housing promotional programmes. In order to take out a promotional loan, however, the client's bank must still be willing (as the contracting party with the client) to assume the credit risk.

Background: What is the core idea behind the BDO platform?

The advisor at the client's branch of the bank or savings bank submits an application online using the web-based process while he or she is still talking to a client who would like to apply for a promotional loan in order to build a house, for example. The (savings) bank and the promotional institution exchange data via KfW's promotional funding platform. Following an automated check at the promotional institution as to whether the criteria for promotion are met, a binding funding approval is issued in the space of a few minutes. The client advisor and the client can obtain certainty for the planning of the project already during their meeting.