Spearheading the digital revolution

by Sarah Megginson14 Sep 2020

A trusted innovator in lending technology, NextGen.Net makes the process of applying for a home loan more seamless and structured through ApplyOnline®, a loan processing tool that becomes an integral part of a broker’s business, enabling brokers to increase efficiencies, while simultaneously offering users a smooth customer experience.

ApplyOnline® provides true straight-through processing backed by an advanced workflow and decision engine that significantly improves loan approval turnaround times.

“We’re well beyond critical mass in terms of utilisation of our Supporting Documents service, with a checklist to say which documents are needed when, and the capacity to use optical character recognition (OCR) to read the files. ApplyOnline® is a safe and efficient environment for document delivery, and it’s a genuinely superior alternative to emailing documents!” says Tony Carn, chief customer officer at NextGen.Net.

First launched almost 15 years ago, ApplyOnline® also offers brokers access to detailed reporting of pipeline movement, to increase visibility of loan status and identify process bottlenecks – and it’s these types of efficiencies and opportunities that have really benefited brokers during the pandemic, Carn says.

Tony Carn, chief customer officer, NextGen.NetTony Carn, chief customer officer, NextGen.Net

“The pandemic hasn’t really changed the baseline of what we do. As a software-as a-service (SaaS) offering, ApplyOnline® was already a digital platform, so we’d already revolutionised the way we do mortgages online almost 15 years ago, and the fact that we had the digitised structure in place meant we were ahead of the curve without ever realising this is the environment we’d be operating in,” Carn explains.

“One of the things we actually had in place was a robust pandemic plan, although we didn’t expect to ever have to use it! As an organisation, what we saw was that there were a number of tools we offered that were available but weren’t really being used. A really good example of that was e-signatures, as most lenders were still requiring a wet signature.

“The likes of MS Teams and Zoom and electronic document delivery and signatures have always existed – COVID-19 has merely jolted us into using them more”

“The other was ID verifications. Many lenders still required brokers to ID a customer face-to-face. With NextGen.Net an authorised gateway provider with the Department of Home Affairs, ApplyOnline® allows the broker to type in the details of government-issued documents and have it all verified within the platform. The uptake of these tools now has been impressive.”

NextGen.Net’s benchmark reporting is another area in which both broker groups and lenders are seeing a lot of value.

ApplyOnline® provides for robust insights and analysis, which allows a lender, for instance, to review its credit assessment metric and ask: how do we calculate living expenses, and how does that compare to the rest of market? How are we performing in terms of the number of applications received across various different categories? Are the number of refinances up for the month, or have they fallen? And what is the current turnaround time to unconditional approval?

NextGen.Net: Streamlining the mortgage process“Everyone wants to know what’s going on in the market and how they are comparing against peers in ‘time to yes’ and a number of other KPIs. We ratcheted it up, and now we have made these tools available as a self-service platform, which has been really interesting as it allows the data to be accessed in real time,” Carn says.

While the industry has embraced rapid tech change since the outbreak of COVID-19, Carn believes that innovations and efficiencies should serve to free up brokers to better serve their customers rather than replacing their role altogether.

Remote interactions are “the obvious one”, he says, in terms of the major pivot that mortgage brokers, lenders, aggregators and indeed the entire industry and business community have made in an effort to continue working while being socially distanced.

“The likes of MS Teams and Zoom and electronic document delivery and signatures have always existed – COVID-19 has merely jolted us into using them more, and perhaps made us realise we should have adopted some of them sooner. Interestingly for us, when the pandemic first hit, we had Microsoft Teams but we were barely using it; it was being used largely by our developers but wasn’t used widely across the business. Now it’s become our primary means of communicating and meeting,” he says.

“Going forward, technology will never replace a broker. I think we’ll learn to leverage the tools more effectively, and brokers will be supported to do what they do best: help people. I read somewhere recently that virtual engagement will replacement face-to-face meetings and become ‘the new normal’ when virtual honeymoons become the new normal. We are learning to better leverage technology, but it’s in addition to, not at the expense of, the existing broker offering.

”When the pandemic first began impacting Australians in March, this was followed by the three busiest months of broker activity on record, Carn says – and has created awareness and appreciation for the work that brokers do.

“Brokers and lenders alike have a tough job to do. In any environment it’s tough, but in a tightening market from a credit perspective, things aren’t as easy as they used to be. So, right now, from our perspective, it’s about making sure the right plumbing is in place to allow lenders, brokers and borrowers to interact in a seamless way,” Carn says.

“Brokers and lenders alike have a tough job to do ... from our perspective, it’s about making sure the right plumbing is in place to allow lenders, brokers and borrowers to interact in a seamless way”

“A lot of the work we’re doing is behind the scenes. It’s not so visible and it’s not always the sexy, sizzling stuff – but it does serve to take a lot of the friction out of the mortgage application and approval process. We aim to be a safe and reliable pair of hands to support the broker community.”

At present, this includes a big focus on helping brokers and lenders alike meet their regulatory obligations. With best interests duty at the forefront of everyone’s minds, there are a number of ways that NextGen.Net aims to help broker groups deliver the changes required – a task made slightly more complex by the fact that “they’re largely subtle”.

“The vast majority of brokers are already doing what they need to be doing, and they’re acting in the best interests of the customer already – this is about having the evidence in place to support that,” Carn says.

“A lot of the changes stem from responsible lending and the legislation that came into place earlier this year, too. We worked on delivering a digitisation solution with a number of lenders as far back as 2018, so we’ve been well ahead of the curve with this before it was even on the agenda for others.”

In another move that demonstrates NextGen.Net’s position at the forefront of the industry, earlier this year it acquired Frollo, a purpose-driven Australian fintech and leading provider of financial management and open banking solutions.

The strategic acquisition brings together industry leaders from complementary business  areas to help both companies lead the way in Australia’s new open banking environment.

“With open banking, there will be real material change to the industry over the coming two to three years, and that change is now starting to get underway. We as an organisation have made a meaningful acquisition in that space through the acquisition of Frollo, which is an unrestricted data recipient under the open banking regime and the only fintech in the market that is able to facilitate a consumer exercising that right in the market,” Carn says.

The addition of Frollo’s complementary technology and teams will strengthen existing NextGen.Net solutions and improve lending experiences using open banking. Frollo will leverage the experience and resources of NextGen.Net, while providing open banking technology for the NextGen.Net platform to reduce the cost of responsible lending and improve ‘time to yes’.

A government-led scheme that mandates the way banks should share consumer data in a machine-readable way when customers request it, the Consumer Data Right aims to reduce the friction within financial transactions, help consumers get better deals, and spur innovation through competition.

Frollo is the first fintech in Australia to become an accredited data recipient under the ACCC’s open banking regulations and was the first to go live with access to open banking data on 1 July.

“Frollo has fantastic tech and the ability to retrieve that data and aggregate and categorise it in really meaningful ways,” Carn adds.

“In terms of what’s next for NextGen.Net, we play some of those cards close to our chest, but we’re currently kicking off an important change to our user interface and user experience. We’re leapfrogging that to a market-leading state and rolling it out to the broader broker market, beginning with a pilot basis in September. It’s going to enhance integrations right across the journey, from a customer to a broker to a lender, and it also delivers a lot of operational and user enhancement, so it’s going to have a really big impact. Watch this space!”

Frollo: A strategic acquisition