Retailers fuel the desire for instant gratification with three-hour delivery options. Smartphone apps have enabled consumers to order taxis, food and even alcohol on demand. And in the financial sector buy-now-pay-later services allow consumers to purchase products even if they don’t have the funds in their account.
This trend is already impacting the lending industry. It was recently reported that Macquarie Bank is dominating mortgage lending, thanks to its speed of service and digital offerings. Aussie Group also announced it had committed $20m in tech investments to improve its processes. And aggregator Loan Market suggests its tech is what helps its brokers grow.
Using technology to gain the advantage of speed is clearly what is winning the battle. It’s why we keep seeing significant investment in fintech, which jumped to $2.9bn last year, according to KPMG.
Speed is not only providing competitive advantage but quickly becoming an imperative in business. And the pace of change will only increase as digital transformation takes hold.
Turning manual into virtual
Unfortunately for brokers, there are many processes for meeting lending requirements that are still very manual.
For example, one of the biggest time sinks is the verification process, from verifying the identity of customers and vendors to arranging site visits where authorised verifiers can then tick their checkboxes. Traditional processes currently take from days to weeks. Meanwhile, a cash buyer can swoop in and scupper the deal.
However, there is one ubiquitous technology that is enabling brokers to turn these manual processes into virtual, digital processes, cutting the time it takes to secure finance, reducing processing costs and opening the door to automation. And it is something many of the new digital services are based on – the smartphone.
The smartphone can remove the need or many manual, location-based activities that require a physical inspection. Its camera offers a means by which customers and vendors can share the required information, with GPS location data used to confirm the picture is not fraudulent.
This means brokers no longer need to do physical asset inspections, as information on assets can be shared by capturing the verification details with the vendor’s smartphone camera. This can be a game changer for brokers in regional areas, who typically spend an inordinate amount of time coordinating asset and vendor checks.
Using technology to gain the advantage of speed is clearly what is winning the battle
A faster experience
Now that documents are being shared digitally, it is easier for brokers to use software to automate the process, creating a faster, scalable and repeatable experience.
For instance, instead of customers having to download and email brokers their bank statements, tools like Illion’s bankstatements.com.au allow brokers to retrieve the statements they need, including a responsible lending report, to secure finance from lenders. Brokers can also use DocuSign for signatures and confirmations so customers can secure funds directly from their smartphone.
Online opens opportunities
The biggest benefit of transitioning towards a digital, online model is that it opens the door to diversification.
Today’s digital landscape can help improve the relationship between lenders and brokers, creating a platform on which digitally driven organisations can better integrate and provide products and services to meet customer needs.
Using these digital platforms, lenders can easily define the documents required for brokers to provide an offer in a matter of minutes. Whether it’s for a car, boat, caravan or home loan, by creating a set of defined parameters, along with the ability to connect and share digital information, this allows brokers to quickly and easily meet almost any customer scenario.
This gives them the chance to diversify outside of their niche and offer products that meet different life stages of customers.
Keeping it secure
However, while going digital can provide the advantages of speed and diversification, it is imperative that brokers should remain compliant with data privacy regulations.
Many of the documents and information required for financing are extremely sensitive. Customers can also sometimes send unsolicited information that leaves brokers at risk of a data breach – such as additional financial information they think may help with their applications.
It is important that brokers understand how they must handle this information, particularly if they sent it by email.
To this end, when brokers choose technology platforms to improve efficiencies, they must check they encrypt the information, ensure it meets data privacy regulations and doesn’t hold any information beyond reason. If unsure, it may be worth asking their lending partners if there are digital platforms they would recommend.
No better time than now
Technology will be the next big battleground for brokers. Those that move first to digitise and automate will not only get the advantage of speed but also open the door to new service offerings. This will be a significant advantage in meeting consumers’ demands for instant gratification and convenience.
CEO at Verimoto