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Speaking during the Mortgage Business Spotlight podcast earlier this month, Jack Meredith, LEXTECH’s COO, commented that competition in the market was the current big issue for the electronic conveyancing (e-conveyancing) sector.
“That's the biggest point of difference at the moment. We've got an incumbent who was given a very favourable environment, which led to a monopoly and it's going to be very difficult,” Mr Meredith said on PEXA.
Earlier this week, Link Administration Holdings Limited (Link) — which holds a 42.7 per cent stake in PEXA — agreed to an amended Scheme Implementation Deed for its sale to Dye & Durham Corporation, following repeated rejections.
During the announcement of these rejections, Link noted its intentions to satisfy the ACCC’s concerns over a monopoly in the space.
However, Mr Meredith said during the time, that regardless of the acquisition, PEXA will still maintain a distinct grasp over the e-conveyancing space.
“I understand the ACCC concern around a monopoly and the third-party products that will be brought in if this acquisition goes through. You have things like the information broker side, the legal service, or the legal practice management, which becomes a concern,” Mr Meredith said.
“But at the end of the day, it's kind of glossing over the fact that there is a monopoly out there.”
He continued: “This acquisition probably won't change that. It's probably not going to be a huge detriment to it,” Mr Meredith continued.
“It's not as if this acquisition going through is going to automatically cement PEXA's monopoly provider. They already are. What the market really wants — what they're calling for is more competition. And that will only come from more services in the market.”
Mr Meredith said that despite LEXTECH wanting to go down this path, and the presence of other outfits, including Sympli, until there are more Electronic Lodgment Network Operators (ELNOs) on the market “that can compete on price and particularly service and technology”, this acquisition won’t change PEXA’s hold.
Lack of transparency the result of a lack of focus
Speaking at the time, Mr Meredith noted that, compared to other jurisdictions, the transparency in e-conveyancing was still an issue.
He noted that, at the moment, a broker “isn't able to access that e-conveyancing settlement environment due to various reasons, whether it's the provider or there being a restriction on being able to provide them with access”.
Speaking as to why this is the case, Mr Meredith commented that the current priority of conveyancing “just hasn't been focused on providing the brokers with the update,” and that the intention is “heavily dependent on conveyances and lenders”.
“And it doesn't go much further than that,” Mr Meredith said.
“If you look at the overall intention of e-conveyancing decades ago, the idea was that it would start with a real estate agent starting a file, and then all the parties would come along. And that would be your true straight-through processing, but through various owners and various government bodies, PEXA and Sympli have really just focused on registration and financial settlement.
“Brokers aren't really involved right at that end with the registration or the settlement that the banks undertake. They've been left out of the process," he said.
“And the easiest way, I guess. And it's why [LEXTECH is] so heavily focused on it, is bringing in a system that doesn't just originate right before settlement.”
You can listen to the full Mortgage Business Spotlight episode, partnered by LEXTECH, below:
[Related: Spotlight: Where to next for mortgage digitisation?]
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