A tech company that is actively preparing for a future where lenders emphasise client capability rather than their security, has encouraged brokers to do the same - and has even built a new tool to assist.
“From a digital perspective, there’s quite a bit changing. What is probably going to be most impactful is open data,” explained Tim Brown, head of financial services at Lakeba, the tech group behind broker document collection app Ezidox,
In the near future, consumers will have the ability to share their data with anybody they choose. Banks will be unable to refuse access, which is sure to lead to a shift in power.
“Change will be adopted if I, the client, know that I’m a better risk than the majority, and I know that I can take my data from bank to bank to get a better rate,” said Brown.
“We’re going to see the mobility of clients change dramatically.”
In order to stay relevant and still be able to deliver the best consumer outcomes, industry players – brokers and aggregators alike – will need to learn to utilise the changing dynamics.
“It’s commonplace in any industry that some people become complacent and get left behind, while others make the changes and challenge the current market,” said Brown.
“We’ve seen this in the aggregation space before. Someone comes in with new technology that’s more efficient, more informative, and enhances productivity.... That would make brokers want to move,” he added.
Whereas the ability to consolidate lenders’ policies, products, and pricing into one platform was once considered cutting edge, it’s now expected as the bare minimum. To remain an invaluable resource in a rapidly changing environment, aggregators will need to continually update the tools and support they provide to mortgage brokers.
A project that Brown is currently working on at Lakeba aims to do just this.
He explained, “We’re building an affordability score that takes current cash flow into account, which is a far better analysis of somebody’s ability to repay – today and in the future. It also covers all the responsible lending guidelines that APRA is now imposing.”
“It is crucial that brokers understand the importance of embracing this data,” he concluded.
Brown will be delivering the opening remarks at the upcoming MPA Broker Business Exchange on 5 June. For more information or to register, visit: https://brokerbusinessexchange.com.au/
In a show of support for the industry given recent events, Key Media has waived the 2019 registration fee for brokers.