During ASIC's day-long webinar exploring current opportunities and developments around responsible lending, an aggregator executive made a case for the necessity of digital Verification of Identity (VOI) in the mortgage industry, even in a post-pandemic world.
“My hope would be that we don’t go back to what [VOI] was before COVID-19,” said Loan Market chief compliance and regulation officer David McQueen.
According to McQueen, while social distancing restrictions have undoubtedly encouraged the more rapid adoption of digital VOI solutions within the industry, there are benefits to the new solution which will outlast the pandemic – and with no additional risk as compared to the physical verification process.
“[Over the next five years] working within the mortgage space, the clients we are going to be dealing with are going to change. Clients are going to be far more comfortable with using digital tools,” McQueen added.
“For a lot of larger institutions, we know it’s harder to make change happen. But it’s in their interests to speed up their ability to change. Especially when it’s the right thing to do for the institution and the consumer.”
McQueen also emphasised that if digital VOI is given indefinite approval by the Australian Registrars’ National Electronic Conveyancing Council (ARNECC), lenders would be pressured to do the same.
Since the onset of social distancing restrictions, majors, non-majors, non-banks and aggregators have moved to make digital VOI available to their brokers, as facilitated through a range of tech companies such as InfoTrack, MaxID, and MSA National’s IDyou app.
Recently, FinTech Australia highlighted the role open banking could play in helping to standardise digital VOI across financial services, creating a secure base which would allow for further innovation in the space.
“Currently, through tailored [anti-money laundering] programs, bespoke technology solutions and a handful of aggregators, entities largely design their own ways of dealing with ID verification issues,” the group explained.
However, once standardised, digital VOI could be used in a myriad of additional ways, delivering a material benefit not only to financial institutions, but to Australian consumers.