“The big opportunity for the entire industry is how do we spend less time on reworking deals and asking for more information, and therefore speed up the time to approval and the time to settlement. I mean this for both bankers and brokers. By no means am I saying that we don’t have a lot to do to make sure we don’t have to rework deals,” Rakhit says.
One difficulty in achieving better productivity, Rakhit says, is the disparity between lenders. With each lender having its own distinct requirements, he says it’s easy to see why brokers can end up frustrated.
“The reason why I think it’s so difficult is because every lender has slightly different criteria of what is required from the customer. Lender A may ask for a two-page list, lender B a one-page list, lender C may ask for the end-of-year income statement.”
But industry figures pushing for a uniform application across all Australian lenders may be in for a long wait, Rakhit predicts. Instead, Rakhit says the industry should focus on developing technology that does a better job of communicating each lender’s particular requirements.
“I don’t believe that we’re going to get uniformity across the lenders, so my solution would be to try to build technology that says the broker has chosen lender A; this is exactly what this lender requires for specific deal,” he says.
RESPONSIBILITY LIES WITH LENDERS
Therefore, Rakhit argues, much of the onus for improving productivity and efficiency lies with lenders. Lenders have the opportunity to build technology that will make straight-through processing easier for both lender and broker.
“Given the progress we made over a decade ago when we moved from pen and paper to electronic trading, the next stage of evolution should be using the new technological capability coming into the industry the first time, and submit an application that is acceptable to the lender, and the lender turns that into an offer and a settlement in much quicker time than they do today.”
Rakhit says he can foresee a day when dynamic checklists communicate to brokers each lender’s criteria for each unique deal, taking the guesswork out of submitting applications and supporting documents and helping brokers supply all the information a lender needs at the point of sale.
“My goal would be that the broker chooses a lender based upon the client’s criteria, and it’s the lender’s duty to say exactly what they want, and to make sure not only that the list of documents goes out to the broker, but that it is the exact same that goes to the back office,” he said.
The end result of such improvements will be better returns for lenders and brokers alike, Rakhit says.
“For the lender it’s a reduced cost to process, and increased revenue because you put the deal onto the books quicker. For the broker, it’s an improvement to customer satisfaction, as well as less time spent on each file and more time for value-adding activities.”
DOING THEIR PART
For its part, Rakhit says Bankwest is investing in technology to make processing more efficient, and to make the application process more straightforward for brokers.
“We’re looking at a dynamic checklist that says on deal A we want these five documents, but on deal B we may want five entirely different documents. The second thing we’re looking at is optical character recognition. That means the system will be able to read an application, read that the driver’s licence is in the same name, the contract of sale is in the same name, be able to go ‘tick, tick, tick’ on those documents. It will give us the ability to process more volume quicker without putting more cost into the business.”
For brokers’ part, Rakhit says the key to getting applications right the first time is communication. “The first thing I’d say is to make sure that you’ve got whatever is unusual about a deal agreed upon beforehand. The second is to ensure that what the lender has asked for is exactly what is provided.”
But Rakhit argues that brokers are largely already ticking these boxes. He says the majority of brokers do a good job of providing everything that’s asked of them.
“I’d say brokers are very good at those things. I think there’s more that Bankwest needs to do than there is for brokers. If brokers have to move two steps forward, Bankwest needs to move five or six. That in no way means that we have terrible service. It just means we have to be more responsive to make our service that much sharper.”
