Digitising commercial loans: Leading lenders make the shift

by AB16 Nov 2017
Electronic lodgement of commercial loan applications is on track to become the industry norm in the future, forecasts NextGen.Net sales director Tony Carn.

“It’s inevitable,” he maintains.

“We’re in a transition period, with some people still saying commercial loans are too complex to digitise. But that attitude is changing fast. In some respects we’re where we were 14 years ago with residential mortgages, with the early adopters benefiting from being forward-thinking.

“The industry began moving into the 21st century when NextGen.Net deployed the first digital residential mortgage in 2004. Today close to 100% of residential mortgages are written digitally.”

Carn anticipates a transformation in the commercial lending space that will witness a significant decline in the traditional paper-based application and thereby “drag commercial loans into the digital age”.

“Lenders are recognising that if they want to build scalable platforms to write serious volumes of commercial loans they need to do so electronically,” he says.

“Otherwise they’ll have to engage additional staff and prepare for a lot of extra paperwork, because diversification is happening in the broker sector and commercial loans need to have traceability, clear communication and auditability. As the demographic of brokers is evolving, they too are demanding digitised solutions.”

NAB is the first big four bank to utilise electronic lodgement for business finance products, demonstrating its commitment to the broker channel to offer business finance products of the same quality and in the same streamlined way as residential loans.

NAB is in the process of implementing a NextGen.Net ApplyOnline electronic lodgement solution to enable distribution of business finance to the broker market.

The ApplyOnline Commercial LIM will enable NAB to open up more opportunities and leverage brokers in the commercial space.

“Hats off to NAB,” Carn declares. “They’re the first to deliver a comprehensive digital commercial loan solution in the lending space.

“They’ve built the infrastructure and framework around accommodating commercial loans for brokers and delivering better turnaround times, reducing reworks and providing greater visibility and tracking, and backchannel messaging.”

ApplyOnline provides lenders and brokers with ‘plug and play’ distribution into the broker market for an increasing number of product types. Once built into ApplyOnline, it can seamlessly plug any product into any broker.

“That provides brokers ready access to electronic lodgement of commercial loans without lenders needing to invest millions of dollars in development, new platforms and bespoke mechanisms that cater to their individual policy requirements and different broker groups. A standardised approach will ensure commercial loan applications are as uniform as conceivably possible,” Carn says.

“Plus full credit to Suncorp,” he adds. “They were the trailblazers in this space with the electronic lodgement of small business loan products; likewise ANZ in adopting electronic lodgement for asset finance.

“Broker diversification is increasingly on the agenda. Electronic lodgement of commercial loans is making it a lot easier and more efficient for brokers, and therefore commercial lending is becoming far more accessible.”