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Artificial intelligence could be used to hunt rogue brokers

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Australian Broker | 13 Dec 2016, 08:00 AM Agree 0
The new smart algorithm could aid in everything from targeting broker fraud to helping find suitable products for clients
  • Brado | 13 Dec 2016, 08:45 AM Agree 0
    the problem with this statement; "but is that the suitable product?" is that we don't have to find the 'suitable product' but find one the is 'not unsuitable'... so is this algorithm defunct before it starts?
  • chrisc | 13 Dec 2016, 10:09 AM Agree 0
    We seem to be being pushed into socialist regimes by the day - not enough that the banks dictate everything to us, now to be controlled by computers (or the people who invent the programs - with their / their sponsors flavours in built / who is the sponsor for this latest one); the brokers and the clients will have reduced say or subjectivity or choice - how many times have we seen where the current credit code (consumer protection) favours the bank over the consumer - the banks grow even stronger in then being able to fit their programs to the algorithm which in time they will - its all computers Vs computers - is this being tried on all Government Depts too - that may have many more and better far reaching outcomes than picking on Brokers all the time or does sponsorship and politics get in the way of it there.
  • Brett from Brisbane | 13 Dec 2016, 10:22 AM Agree 0
    Of course, the algorithm will have analysed your business plan and target market, interviewed the client and analysed the qualitative and quantitative data accumulated at the interview stage before determining “a suitable product”, which we all know we can’t do. Then the overlay of urgency on SLA overs combined with approaching contract clause requirements which could deem some products unable to achieve delivery by the specified timeframes, which causes disharmony and anxiety at a client level. This is something which the algorithm may have a difficult time coping with.
    A ‘robo advice’ model as an audit check can only be the continuation of a draconian and naïve understanding that programmers and officials seem so keen to push around in wheel barrows.
    If the industry wants to look at rogue brokers, maybe look at the percentage of application volume for that broker and question why the lodgements seem skewed towards on lender. This algorithm (not digital) has been in the industry for many years at an aggregator level.
  • Josh | 16 Dec 2016, 10:00 PM Agree 0
    Veriluma recently raised funds from shareholders as a fintech start up and with respect the article seems to be a sales document to see if there are any interested parties, which is good low cost marketing they are moving in the right direction. But if they are have allocated a significant spend of shareholder money, believing they have something that aggregators, lenders and ASIC who have not invested in already is a trap for new players.

    Rogue brokers in the broker market cannot operate on the fringe for long. They either drop into a place of fraud or are punted by the aggregator/franchise for incompentance.

    It would be a dream to do a bang bang bang and a "throw" to a lender (4 loans) like its an afternoons work. Its 30-40 hours at best of resource, so overriding any algorithm, conflict of interest or commission is, that if the Broker, does not deliver a solution, supported by rationale the client has choices and can shop! We cannot escape the cost and time broker algorithm to go bang and throw - maybe 20years ago!

    The algorithm is not a mystical formula that is the oracle of finance. It needs assumptions and if I was a shareholder who stumped up money, I would be asking the question as to what does the algorithm do, that the big boys with very deep pockets, investing many times more, knowing brokers are moving market share north of 55% and lending money for nearly 200 years, are not doing?

    To clear the air, we challenge AB and Veriluma to test the veracity of the algorithm.

    My Scenario is a simple one:-

    I earn $130K as a single person with no dependants
    I have a home loan of $200K on a home in Sydney worth $700K
    I would like $20K to buy a car and am considering a consumer lease or adding to my home loan.

    Algorithm - broker is weighing up both options and your compelling answer is???

    ............. that's what I am talking about.

    If I invest time and money into a loan that gets discharged for whatever reason within 12 months I have to pay back what I received. Given Veriluma is operating in the same space, will they pay back the shareholder funds for a decision gone wrong?

    Are clawbacks in the algorithm??

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