54% of financial institutions looking to launch instant approvals for loans

The findings come in a new report commissioned by digital identity technology provider GBG, which saw research group IDC survey 1,502 Australian consumers and 300 financial institutions (FIs) and professional services firms in October 2021.

The Digital Identity Verification: Bridging Usage, Preference, Trust Gaps in Australia report found that the majority of businesses in Australia are planning to roll out new digital services that would require identity verification as part of the onboarding process in the next two years.

When asked which services they are planning to roll out in the next two years, more than half highlighted 'instant approval for loans' (53 per cent), while a similar proportion (54 per cent) was planning to launch instant applications and approvals of services.

Other potential services included crypto deposits, payments and transactions (68 per cent), open banking (54 per cent), and facial verification for new or existing customers when onboarding or logging into a service (50 per cent).

The researchers also noted that an increasing number of businesses are generally looking to provide more digital services to consumers, following an uptick in online consumer behaviour.

According to the report, two-thirds (67 per cent) of Australians had created up to six new online accounts in the last 12 months, as a result of the pandemic, to continue their access to services remotely. Moreover, three in four customers utilised web, mobile, or apps when onboarding to a new service this year.

Michael Araneta, AVP for IDC Financial Insights and lead analyst for the survey, remarked: “Australian businesses must be able to support the sheer amount of growth in interactions with customers. This has been seen especially in customer onboarding, where the growth of new customer accounts in digital channels does not show any sign of stopping. It is important for businesses to ensure that the customer onboarding process is seamless to set the quality of customer journeys right from the get-go.”

The findings come as more lenders focus on hastening turnaround times, and – in some cases – offering “instant” approvals on home loans.

This week, National Australia Bank (NAB) said it is continuing its roll-out of the Symple Home Loans system, which now processes around 80 per cent of its proprietary applications.

The platform reportedly returns loan approvals within an hour for 30 per cent of applications, or in a day for 60 per cent. Around 80 per cent reportedly see an outcome within five days.

The bank has flagged the platform will roll out to brokers in the financial year 2022, alongside a new credit decision engine for the channel.

Similarly, Australian Mortgage (now owned by Volt Bank) uses “instantaneous credit decisioning”, reaching “fully verified approvals” in less than 15 minutes.

Its digital mortgage solution will soon be distributed through Australian Finance Group (AFG), as part of Volt’s new alliance with the group, with AFG brokers piloting the product “in the last quarter of 2021”, before being made available to all of AFG’s brokers in early 2022. 

Volt Bank has previously said that Australian Mortgage’s Intelligent Credit solution will form a key part of Volt’s banking-as-a-service (BaaS) offering, and help speed up turnarounds for brokers, who are currently experiencing long delays at traditional lenders.

[Related: CBA’s new digital mortgage to be offered direct]