Half of Australians think that the onus should be on banks to proactive monitor their clients financial health, according to new research from Experian.
The information services experts released a report that lays bare how Aussies feel about responsible lending, with 50% saying that banks should monitor their clients, but 80% saying that they did not know whether their bank provided such as service.
Experian have a long track record of getting to the core of what Australians expect from financial institutions: recently, they found that 20% of borrowers lie on credit applications.
For brokers, the study should be taken in the context of Responsible Lending Obligations (RLO) and Best Interests Duty (BID), which dictate how the channel works with lenders to assess the ability of customers to service loans.
“Where brokers come in is at the point of application,” said Mat Demetriou, Australia and New Zealand General Manager of Decision Analytics. “Once they get that loan, we want to proactive assess that customers are meeting obligations over time.”
“Of course, circumstances do change: people lose jobs, see losses of income, natural disasters, family matters, separations and divorce. All those sorts of things can impact somebody’s ability to service that loan.”
“The idea here is to help banks to help their customers by proactively identifying triggers or stressors that come up over time, so that they can remediate those before someone goes into hardship.”
“All of that falls into Responsible Lending: it’s not just at point of application, it’s also ongoing monitoring of the loan and the consumer’s ability to pay it, and to support them if they can’t.”
Demetriou was quick to add that banks were already intervening to help customers affected by the pandemic, and adapting new methods to keep clients informed over the life of a loan.
“What we really want to emphasise is that the banks have done a really good job, especially during Covid, in terms of being proactive and offering flexibility with things like payment holidays and deferrals,” he said.
“They’re investing a lot in automated decisioning and advanced data and analytics to be more proactive and help customers achieve lasting financial wellbeing.”
“That’s the key here, because that’s what drives long term loyalty and really empowers them. It’s a win win for both the bank and the customer.”
