Fintech to link banks, brokers and regulators

by Miklos Bolza24 Oct 2017
Australian fintech MoneyCatcha has partnered with bank HSBC Australia in a trial of its two blockchain platforms with the aim to improve loan turnaround times and reduce compliance spending for the banks.

MoneyCatcha has developed loan processing platform Homechain and regulatory risk review tool Regchain which are both powered through the same internal blockchain engine.

The fintech has partnered with HSBC Bank to trial the use of its Regchain software which helps regulators capture and review information from lenders through regular reports detailed at a level that each lender is comfortable with, CEO and founder of MoneyCatcha, Ruth Hatherley told Australian Broker.

“We are completely agnostic in terms of how an institution wants to use our technology. It may be that one institution wants to give full visibility of their home loan portfolio on an ongoing basis to both ASIC and APRA on a read-only basis with no restrictions around that.”

At the other end of the spectrum are institutions that want to push out reports to APRA from the Regchain platform, she said.

The initial pilot will look at HSBC’s comfort level around what the data set looks like inside of the platform and how the data can be shared with regulators today. Findings of this trial will be released at the beginning of next year.

The platform eventually aims at reducing compliance spend for financial institutions, she said, especially with the big four banks alone spending between $350m and $400m each year on regulatory reporting and compliance.

MoneyCatcha is currently in talks with a number of other banks about trialling Regchain although non-disclosure agreements prevent the specific institutions from being named.

Fast off the block chain

Discussing loan processing platform Homechain, Hatherley said the software could pull hundreds of loans from application to settlement within 90 minutes in a test environment.

This included 45 minutes for input, verification, assessment and documentation plus a further 45 minute wait to book the next window to settle within the PEXA platform.

However, Hatherley admitted that turnaround times would be slower in reality due to the way in which banks were set up.

“With those types of modern day challenges that still exist, you can assess the application and have it ready for settlement in one to two days. There are still some manual processes that hinder settling it on the same day.”

The missing piece now is for the banks to catch up with these faster turnaround times, she said.

“It’s important to know that the technology is capable of doing that today. It’s a matter of building something that the world can aspire to as opposed to being sub-optimal and building just what is good for the status quo today.”

Hatherley’s 21 years of experience within the mortgage and finance space at the Commonwealth Bank of Australia and at Mortgage Choice showed her significant flaws within the loan application process.

She was driven to research and then create Homechain to pull all the pieces of the process together in a true end-to-end workflow.

“When I went over into the broking world, I thought we would be able to help customers by channelling them into banks and financial institutions that were better than others in terms of service and product. What I experienced over a long period of time is that no one bank was doing it better than any other over an extended period of time.”

Homechain aims to speed up the process end-to-end while removing pain points for consumers, internal bank staff members and brokers, she said.

The introduction of the PEXA platform and the requirement that refinances be completed digitally was fortuitous for Hatherley.

“If I could stitch a workflow together and link it into PEXA, the customer’s file never leaves that workflow platform. That doesn’t exist in the market today.”

Homechain can be used by lenders, aggregators, mortgage franchises and more with the platform agnostic about who the user actually is, she said.

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