Technology is rapidly redefining Australia's lending landscape.
Tony Carn, NextGen's chief customer officer, described the country's loan market as having reached a "critical juncture."
"While customer expectations have accelerated toward instant, digital-first experiences, many lenders remain tethered to legacy infrastructure that wasn’t designed for today’s pace," he explained. "Only 35% of consumers are fully satisfied with their digital banking interactions, highlighting a significant experience gap that threatens competitive positioning."
To help brokers and lenders stay in the game, NextGen, a service provider that builds software used during the loan process, recently commissioned a report — dubbed "Australian Lending Technology 2026: 5 insights defining the industry's future" — highlighting the key trends shaping the sector and the opportunities emerging alongside them.
NextGen surveyed more than 130 lending professionals — including senior executives from firms such as Pepper Money, Skip, NGM Group and ING Australia — to find out how technology is changing the industry and their thoughts on the big opportunities.
The report explores topics such as artificial intelligence, open banking, strategic partnerships and more. Australian Broker rounded up the biggest takeaways.
Approximately 84% of lenders said customers would have a better experience if loans were approved faster. But it's not technology that is slowing things down; it's data quality, such as incomplete applications.
"The biggest impediment at the moment is ensuring we’ve got all that information packaged upfront," said Barry Saoud, chief executive of mortgages and commercial lending at non-bank lender Pepper Money. "Incomplete applications trigger back-and-forth requests for documentation with each cycle adding days to the timeline and eroding broker and customer confidence."
Mario Emmanuel, co-founder of non-bank Skip, added: "A fast no is always much better than a very slow yes. The experience a customer is going through is very emotional and vastly different to the experience and perspective of the lender."
The opportunity for growth then lies in both better broker education, as well as lender systems that reduce application errors, NextGen said. "Lenders who master upfront data completeness will capture disproportionate market share."
As artificial intelligence becomes more advanced, brokers and lenders are learning to integrate the technology into daily practices. AI is proving useful for routine administrative tasks and speeding up workflows. It is also being applied to document verification and fraud detection.
"Scaling our quality human-led service is an opportunity we’re investing in," Emmanuel said. "AI empowers our Australian team with data-led insights and automations, which skip over manual data entry and enable more applications by removing easily automated tasks. By automating routine processes and reducing manual workload, teams can handle greater volume without proportional headcount growth."
Despite this, human relationships remain a critical part of the process.
"Human judgment is still central for complex lending decisions, nuanced customer conversations and scenarios requiring empathy and creativity," NextGen said.
The opportunity for growth will hinge on leveraging AI for everyday tasks without losing the ability to foster relationships, or to think critically.
Open banking — which requires major banks to share specific products and customer data with approved third parties when requested by the consumer — is speeding up the loan process. But it can also benefit smaller lenders too — if they know how to use it.
"When you can see someone’s complete financial position through open banking, you can look across the market and help those customers to get a better financial deal across all their different financial products," said Richard Burton, chief financial officer at customer-owned banking firm Newcastle Greater Mutual (NGM) Group. "This helps them with their spending and budgeting."
The report found that most lenders said open banking improves income verification, expense verification and fraud detection, among other things.
But while major banks and authorised deposit‑taking institutions in Australia are required to adhere to the guidelines of open banking, according to the Consumer Data Right (CDR) framework, smaller lenders are not yet required. However, adopting open banking can help these lenders and non-banks speed up loan processing, improve accuracy and strengthen both broker relationships and customer outcomes.
