A fintech has found a solution that could revolutionise the way that mortgage brokers deal with aggregators and lenders, and greatly expand their ability to be compliant with Best Interest Duty (BID) regulations.
Effi, a platform that helps mortgage brokers to keep on top of leads and business, designed the product as a way of helping clients to deal with Open Banking, which has greatly expanded the amount of data that lenders are required by law to share with customers.
“Open Banking has two propositions,” explains Mandeep Sodhi, CEO of Effi. “One is the getting access to consumer data and the second is the product reference data.”
Consumer Data Right (CDR), which was extended at the start of July, is widely understood in the broker community, but few will know about the second condition, which has arguably a bigger impact on the way that brokers do business.
“Each lender is now sharing their home loan rates, transaction rates and term deposit rates by API,” said Sodhi. “That’s since February, when all banks and non-banks have had to share what their products look like and what their interest rates are. We focus on that, not the CDR.”
“It started as a growth hack, a fun thing for our team. We have a system called Effi where brokers move their leads to different workflows: marked, settled, etc. Then they have to enter the lender and the interest rate, so we thought: Why don’t we automate that? And why don’t we give something to the broker where they can see what the lenders interest rates are?”
“It’s part of BID that they have to look for what the best available rates are on the market, not just their own panel, and we couldn’t find anything that was giving us that view.”
What Effi discovered was shocking, and sparked them into creating this new solution.
“We found that, while the banks are sharing, the total number of lenders that are sharing their data is 114, with 6600+ products on the API, which has all the features and rates. We figured out that, of that 6612, 4882 did not have complete data. That was shocking,” said Mandeep Sodhi.
“That’s why we started building our own product search on top of it, to make that data accessible to everyone, not just brokers and lenders, but everyone who wants to search quickly. That was the start of it.”
Brokers can now access all different products and present a better proposition to their clients as a result of this new software.
“If you look at the new BID, one of the things that has been added is that brokers have to go outside their own lender panel and see what is the best rate available for their customer, which is hard when you have to jump into the aggregator system.”
“Now, through our proposition, they can build their own dashboard, access the data in whatever format they want and tell the customer their best option based on the 114 lenders available. They can now confidently give that information, and quickly.”
“We’re not saying it can give the product recommendation, because we’re not an aggregator or tied by BID, but they can scan the market offering and then make their own recommendation off that.”
“If I was a broker, and was working with an aggregator, I’d only have access to a maximum of, say, 40 lenders. But there’s 114 available, so how can you scan the market and go to the customer under BID and offer them all the options? Right now, they can’t do it.”
“That is the problem that we’re solving. Brokers will even be able to go back to their aggregator and ask why they don’t have access to certain lenders and ask to be given access.”
