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As open banking and the Consumer Data Right become more widely adopted by lenders and brokers, there could be an opportunity to review and reduce responsible lending laws, according to White.
Speaking on Mortgage Business’ Mortgage & Finance Leader podcast, White said that he believed there were opportunities for reducing “friction” in the home loan space as a result of technological innovation.
White explained: “I think the focus, at least in the discussions we’re having, is how do we take cost out of the system? Because that friction erodes margin for everybody. So, how do we get a better, more streamlined service for lenders and for brokers that enables less friction cost?”
He said he believed there were opportunities to look at “the fundamental way a mortgage is processed”, particularly when it comes to “the amount of time that is spent doubling up and doing things two or three times”.
“How can we verify employment expenses? How we can prove that, rather than have the manual process that there is (where the broker does all the work and then the lender does the same amount of work)?” he said.
“I think there’s a massive opportunity to streamline the process around how we get smarter [and] how we use data and how we can tie into that.”
White told Mortgage Business that the roll-out of government-backed and trusted ecosystems – such as open banking and digital ID verification – could be the solution that would result in more streamlined lending laws.
He explained: “There is some legislation, I think, that needs to be looked at around that. For example, APRA says that a lender can’t rely on anything that a broker gives them.
“With things like blockchain coming through and open banking, if we can verify some of the work we’ve done, can a lender rely on that if it can be verified and fraud-proof? If we can stamp that so that there are tokens around that, I think that will be important.
“Because, if the lender doesn’t have to do as much work, then the lender has less pressure on their margins, which in turn gives more flexibility for brokers to be able to add value back.
“I think open banking is going to be awesome in that space. I think that’s one area that is going to change.”
Other benefits that open banking could bring to the broker channel include giving brokers “a more dynamic view” of their client’s financial position and the financial products that they hold, post-settlement.
“So, there’s a lot of those things that I’d like to see changed, but it’s going to take all of us to work on that together … Lenders have got good ideas on that, we have ideas and I’m sure our competitors do, and a lot of other software providers do,” he said.
“I think all of us, as industry, need to continue to work together to find those solutions.”
White added that he believed that technological innovation was going to be “critical” to the evolution of this industry.
“We don’t think it’s [a fight] between broker or digital. We think the solution is the digital broker,” he said.
“How do we make sure that, rather than turning up with a knife to a gunfight, [our brokers] turn up with a bazooka?
“That’s the bit we’re investing in. And if I think about things that keep me awake at night, it’s money around those areas, and all the things that relate to that.”
You can find out more about Sam White’s vision for the future of the broking industry, as well as what the payroll tax judgment means for brokers, in the Mortgage Business’ Mortgage & Finance Leader podcast, here:
[Related: Lending sector is ‘biggest opportunity’ in open banking: Frollo]
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