By:
Tony Carn
Chief customer officer, NextGen
I think the opportunities we saw in open banking were pretty clear, but if you look at what's in it for a broker, there's so much efficiency and saving. To be at the cutting edge however, you need technology leadership.
Recently, we've seen both Connective and Mortgage Choice demonstrate that leadership, and we're now in those groups up to 60 per cent of brokers in those groups using it on a regular basis.
We're also seeing 35 per cent of mortgage applications from those groups on our platform actually utilising open banking source data.
We knew other broker groups weren't ready to move at that pace, so we created Frollo for Brokers so that any broker in Australia can now register. We'll verify their status as a mortgage broker under the CDR Trusted Advisor model, and they can then get set up within around 24 hours to be sending requests to any customer and have ongoing, real-time access to open banking data.
We’re seeing good statistics from the brokers that access it, and in a period of realistically six, seven, eight months, to get up to a third of application flows being sourced through open banking data is pretty impressive.
The challenge we always have with these things is actually change management. It's coming out of the comfort zone and using it for the first time. What we've been really encouraged about is the uptake and the passion of brokers who are already using it.
We have a lot of brokers who are using it in close to 100 per cent of situations.
We have benchmarking data we share with brokers and lenders around those metrics and what they can improve. But it’s not just about speed; it’s about the other benefits it delivers to a broker’s business, from day-to-day customer engagement to the quality of the application they provide to lenders.
The key word for me is trust. Having a trusted source of data, a federally regulated regime where banks must provide that information without providing internet banking logons and passwords.
The other thing is fraud prevention. It's so topical at the moment and there's a lot of noise. But this is a process which is ironclad; it's a sustainable industry solution. It's not a quick fix; this is something here for the long term.
It’s also cutting down on information requests and, in turn, reworks, which we're seeing decline. That means more loans are going through straight-through processing, where you give it to the lender once and the next thing is an unconditional approval.
We have benchmarking data we share with brokers and lenders around those metrics and what they can improve. But it’s not just about speed; it’s about the other benefits it delivers to a broker’s business, from day-to-day customer engagement to the quality of the application they provide to lenders.
- Tony Carn
Brokers are dominating, and for very good reason.
Is this going to be just to their benefit? Absolutely not. We're very privileged in the broker space, but over time we've had so many lenders who have also seen the advantages of adopting ApplyOnline in their processing of loans.
We've enabled them over time to actually process the loan in ApplyOnline all the way through to settlement. With 80 per cent of loans going through the broker market, it's actually better to align that process with their first-party channel so they've got the one system doing everything.
A continuing trajectory. Some will find that they've fallen behind by not changing fast enough. I think it's time to move quickly.
At the moment, we're experiencing such a rapid pace of change, and it's like the old adage of the bus driving past: you want to get on it, get hit by it or drive it. And so that's a choice that everyone has.
Going beyond 12 months, I'm very optimistic that at a point in time it will become the standard. That's how you will collect data for a home loan application.
But I come back to the word trust again. It's going to be the continuing story we hear over and over: the trust that open banking helps brokers establish, alongside the benefits around efficiency and speed, that will ultimately change the game.
We're very privileged in the broker space, but over time we've had so many lenders who have also seen the advantages of adopting ApplyOnline in their processing of loans.
- Tony Carn
Tony Carn
Chief customer officer, NextGen
