Innovative decision engine fast-tracks road to 'yes'

by Antony Field26 Feb 2021

Enabling real-time assessment in line with each lender’s current product and credit policy, the NextGen.Net platform ApplyOnline provides brokers with accurate loan evaluations and surety for their customers. A valuable tool for brokers and lenders alike, ApplyOnline’s ‘Assessment Metrics’ allows lenders to update their policy details live and ensure brokers are always armed with the correct information.

The tool itself is not only within ApplyOnline but also available for broker groups to embed directly into their CRM platform via an API. Brokers simply ‘call’ the API from their CRM platform at point of sale to assess a loan scenario in real time. NextGen.Net Chief Customer Officer Tony Carn refers to it as “the intelligence under the hood”.

“It’s a very sophisticated rules engine that sits behind our software platform,” he says.

NextGen.Net Applications Director Brett Stanford adds, “Probably the best way to describe the function of the Assessment Metrics tool is as a lightning fast and accurate way of calculating a host of metrics that relate to two of the three ‘Cs of Credit’ – the evaluation of collateral and the capacity position of the application.

“We calculate those metrics then overlay the lender’s policy to provide feedback to the broker as to whether that application adheres to that policy.”

Stanford explains that as with most NextGen.Net services, the fundamental objective of the Assessment Metrics tool is to eradicate the need for reworks and enhance the quality of applications. All this helps save time and helps brokers offer the best service possible to their customers.

“The originator (broker) benefits by getting feedback at the point of sale that relates to those calculated metrics and adherence to lender policy. In other words, the broker is getting immediate feedback as to the likelihood of an application being accepted by the lender,” Stanford says. “The lender gets the benefit of receiving a clean feed of applications.”

The Assessment Metrics tool includes a variety of standard metric calculations that would typically be used across most lenders, including net monthly surplus, loan-to-value ratios and debt-to-income ratios.

“Most significantly,” Stanford stresses, “the Assessment Metrics service incorporates the small, subtle differences that occur within each lender’s calculations and provides results to the broker as closely as possible resembling the way the lender will perform those calculations in their own system.”

The rules engine is intrinsic to the ApplyOnline lodgement service offering, and Carn’s frustration is that some broker groups are not maximising its value while others are still using Excel calculators despite “version control” issues and the inherent limitations in maintaining manual policy records.

“Old habits die hard,” he says. “BDMs need to have greater awareness of our Assessment Metrics tool and understand that it delivers fast, accurate information to brokers’ fingertips and identifies lenders who will provide the exact product they’re after.

“Also, lenders who are not aware that it’s a multifaceted tool with many functions would benefit from knowing that some lenders utilise those metrics as their own ApplyOnline servicing calculator when they’re assessing a loan, and credit assessors utilise it in the back end.”

NextGen.Net’s Industry Benchmark Reporting service is also intrinsically linked to the Assessment Metrics tool in ApplyOnline.

“These metrics form part of our benchmark reporting data set and add real ‘colour’ to the reports,” says Stanford.

“Our benchmark reports are not just simplistic accounts of applications or loan amounts. We dig deep into risk-based metrics, for example segmenting the market based on LVRs and DTI.”

Stanford says NextGen.Net is in a unique position to offer this metrics engine service to its customers because NextGen.Net captures the application data as finalised by the broker.

“The data has the opportunity to evolve and change as the borrower works through their fact-find with the broker,” Stanford says.

“We are uniquely placed to run the calculated policy and metrics against the application data that the customer intends to send through to the lender. Prior to submission we prompt the broker to check what is about to go through in its finalised form. That is the best way to avoid a rework.”

In terms of the metrics detail, Stanford points to the number of years this data has been built upon in ApplyOnline.

“We are fortunate to have a vast amount of accrued knowledge and experience within our data management team, who have an exceptional understanding of the variety of calculations that are performed in the market,” he says.

“So the number of variables that we consider from an application standpoint and put into our engine really means that we are market leaders when it comes to these calculations.

“Our metrics service is being used to not only calculate servicing and other metrics as they stand in the present but also for future states. For example, retirement plans or an interest-only loan that may revert to a principal and interest repayment can be taken into consideration. This means a lender can articulate policy that applies to all these scenarios.”

Because the service is so fast and capable of running different scenarios in parallel, lenders can apply calculations and policy requirements and the broker can get instantaneous feedback.

Looking to the most recent applications of the Assessment Metrics tool, Stanford highlights the fact that lenders are in the process of retiring their Excel spreadsheets.

“We’ve been working with lenders to build standalone servicing calculators that leverage our centralised metric engine service and provide the same level of feedback that ensures the current scenario the broker is working on is in the ballpark and likely to proceed to application stage,” he says.

Carn adds, “The antiquated Excel calculator always has delays and could take anything up to a week to update across the channel. Our Assessment Metrics are driven by a data management team with robust controls and so it’s up to date all the time and its accuracy can be relied upon.

“From a lender’s perspective, it’s very easy to maintain. They can update changes in their servicing calculations or their credit policy themselves. So it’s cheap, it’s easy, it’s accurate, it’s up-to-date, it’s efficient and it’s in real-time!”