Invest now to get broking returns from data revolution

by Calida Smylie07 Mar 2014
A digital and data revolution has been predicted for the mortgage broking industry – and now a technology whiz gives brokers his tips to get ahead.

Tony Carn, sales director at lending technology provider NextGen.Net, says big data will provide massive opportunities to the broking world in just the next three years.

He agrees with Deloitte’s recently released annual mortgage report, which concluded the $1.3 trillion Australian mortgage market is “on the cusp of exciting change” led by a digital and data revolution.

The data revolution, or big data, or will have an enormous impact on the way lenders design and price their products and how they manage their risk, Carn tells Australian Broker.

“Positive and comprehensive reporting is probably a good call-out of where big banks have the advantage, but this is just one aspect of how big data will impact the way mortgages are originated in the Australian market.

“I’m not just saying that from a broker or third party distribution perspective, but also the area of direct consumer where it will change the dynamic as well.”

Apart from positive credit reporting, initiatives which bring quality measurement back to the point of sale are heavily reliant on data and digital innovation.

“I envision better packaging by way of loan quality scoring being the industry norm in the not-too-distant future,” Carn says.

“Risk and complexity scoring are also very useful aspects for big data and they drive the ability to achieve straight-through processing.”

The broking industry is always looking at how to effectively drive better efficiencies and costs to get more business, Carn says.

“There’s a huge opportunity to bring quality management of loan applications forward in the mortgage origination process. There should be a way to manage the quality of the application at point of sale… Lenders investing in that type of innovation will drive real outcomes from 2015 to 2017.”

Another big driver in how data can improve origination in coming years will be the ability to access it in real time rather a few months down the track, Carn says.  

“To be able to use that data for benchmarking purpose is a great opportunity and can drive best practice, and that can impact origination process.”

The data revolution may help smaller lenders catch up to the majors.

“Smaller lenders have an advantage in being nimble. While they may see it as needing to catch up, I think they are well-positioned,” says Carn.

“Often lenders will look at their own existing constraints, but I think it’s often about using different technology platforms and providers and see how they can better integrate with other providers.”

However, the key is to invest now if you want to get returns in the 2015 to 2017 window, Carn concludes.

“It’s about change management. It’s one thing to use data and technology but I think it’s important to bring the business along with those changes, making them across all channels.”

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