NextGen CCO unpacks new AI income detection solution

Speaking at the MFAA Conference on 25 July, NextGen’s head of broker partnerships Renee Blethyn unveiled the AI income detection solution that has been described as “a significant leap forward”.

“This new income verification capability represents a significant leap forward in how we use open banking data. It’s another time saving tool to assist mortgage brokers, making the process faster and more accurate than ever before,” said Blethyn.

The new feature in the Frollo Financial Passport ‘Insights Report’ introduces ‘income regularity scores’ for applicants. These scores assess the consistency and stability of an applicant’s employment income streams across three dimensions:

1. Amount consistency
2. Payment regularity
3. Payment longevity

These dimensions provide a comprehensive view of an applicant’s financial reliability and can be crucial for financial assessments and decision-making processes.

Blethyn said: “By simplifying the income verification process, we’re not just saving time for brokers and lenders. We’re ultimately improving the home loan application experience for countless Australian consumers. This is about making the dream of homeownership more accessible through smarter, faster processes.”

Speaking to Broker Daily at the MFAA Conference, NextGen’s chief customer officer Tony Carn delved into the opportunities open banking presents for both brokers and consumers.

“There’s a lot of talk about open banking, but I don’t think a lot of people are really crystal clear on the fundamentals of what it is. And that’s really important to understand. It’s a federally regulated requirement for ADIs to make customer data available to an accredited recipient. So basically, they’re saying all banks must adhere to this,” he said.

“Organisations can go to the federal government and become accredited which is what’s called an accredited data recipient. That allows them to go and fetch customer’s data on a read-only basis on their behalf. And so, there’s a lot of security. There’s a lot of requirements on becoming an accredited data recipient. It’s a pretty big investment.”

This makes open banking secure, allowing for a safe and reliable means of sharing consumer data.

“We’ve invested in having that status, we are an accredited data recipient. So, on your behalf, I can collect all your information from every bank that you deal with and provide it to you in a matter of seconds. Once people get their head around that, it’s really valuable,” said Carn.

“It’s really the next generation of collecting bank statements via screen scraping and sharing your internet banking password. You don’t have to do it. But beyond that too, it gives you currency. So, when you’re doing a statement, all the data you can just give back to the broker. But you can also use that data then anytime.

“So a broker can go, I want to go and access that data today. They can refresh and collect it today. They can do that now and when they’re ready to submit an application in three weeks’ time, they can refresh it again. And what brokers don’t probably realise is that they have a wonderful leg-up in the trusted adviser regime of open banking, where the ACCC has said, consumers can share their data with a trusted adviser, which by definition is financial planners or an account solicitor and mortgage brokers.”

What’s missing from the conversation is awareness. Simply put, not enough people know what open banking is and how it works. This is where education is important, said Carn.

“The big use for it is being able to collect the data safely, easily, and have that confidence with the consumer that it’s all a nice, safe and regulated process,” said Carn.

“The federal government has not invested in education and public awareness. And it could be argued it’s not necessarily their job, but that’s where it is. So, it’s really up to private enterprise, the industry itself, and that’s where the MFAA is doing a great job. They’re fully on board and see the benefit for brokers and consumers and lenders as well.

“So, it’s time. I always say, when we first rolled out dynamic checklists in apply online, that took five, six years to really get to critical mass. So, it will thrive, it just always takes a bit of time to lift the wheels off the tarmac, so to speak.”

Good news for those looking to take advantage of these solutions as Carn said that the use of open banking among aggregators and brokers is steadily increasing.

“A number of aggregators are well down that path now, turning it on so their brokers can utilise it. And what that means is that it’s just a button that they put in their CRM. So instead of saying, will you share your internet banking passwords or upload documents? They just go, here’s a request, and that’ll take you through a flow with NextGen to say we’ll invite you to access your data and to share it with your broker,” he said.

[Related: Momentum Media Australian AI Awards 2024 launches for the first time]

Jack Campbell is the editor of Broker Daily. After graduating from the University of Wollongong in 2022, Jack began his journalistic career working on Broker Daily’s sister brand, HR Leader. In August 2023 he was made the news editor and worked alongside some talented journalists writing articles and recording podcasts.

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