From open banking into the future

Here's how quality data can help non-banks, brokers, and their clients

From open banking into the future


By Mina Martin

According to the Equifax Mortgage Broker Pulse Survey 2023, 16.5% of brokers were planning to adopt new digital solutions to automate processes in the next 12 months, while a further 17% said they will adopt new digital solutions to enhance the customer experience.

Fuelling these changes is a barrage of quality customer data made accessible by open banking to financial firms. Open banking was also expected to supercharge competition by providing customers with more options and making it easier for them to switch lenders.

“The introduction of open banking in Australia has the potential to make a wealth of data available to allow lenders to make faster, more accurate decisions,” OnDeck CEO Cameron Poolman said.

The Consumer Data Right framework, which is now being extended to non-bank lenders, will enable non-banks to make more accurate and efficient lending decisions, streamlining application processes.

Getting accurate and robust data about a client from the get-go is a big plus not just for brokers going through the loan application process but also for their clients.

“Our view is that the more data we have, the better for the client,” Poolman said. “Data allows us to form a holistic view of a small business, which forms the foundation of responsible lending and also allows us to better tailor our finance solutions to each client’s circumstances.

“However, for tech to reach its full potential in this area, the quality of the data needs to be exceptional, and all financial institutions need to be prepared to engage in sharing data for open banking to live up to expectations.”

The current tech acceleration can be said to still be in its early stages, and for brokers to keep pace with the changes, they need to be in a continuous state of relearning how to do their jobs. By embracing systems and processes that require less intervention, they can make many aspects of their job easier.

“There are so many opportunities to design and deploy new technology in the consumer personal and secured-vehicle loan business that one of the most challenging issues is simply prioritising which project or opportunity to tackle first,” Beaumont said. “The challenges are where we place our best for each upcoming quarter.”

But even as the revolution gathers speed, many finance professionals expect humans to work alongside algorithms, to assist customers on their journeys and handle exceptions rather than being replaced outright.

“Regardless of advances in tech, we know that people always want to speak to people,” Poolman said.

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