When it comes to maximising growth, great technology is an essential requirement for lenders and aggregators. COVID-19 has revolutionised the way the finance industry operates and how customers access services, so companies have had to quickly adapt or get left behind.
Brokers want technology platforms that are efficient and easy to use so they can find the right loan products for their clients and get quick credit decisions.
CPA Australia’s Business Technology Report 2021, which surveyed 725 business professionals in different industries across Australia and Asia, found that technology use is a major determinant of business success, with growing businesses focusing on their tech strategies.
The top technologies Australian businesses are most likely to increase investment in over the next 12 months are cloud technology, data analytics and visualisation software. Business intelligence software is also favoured.
Australian Broker asked fintech lenders 86 400 and OnDeck, major bank CBA and aggregator Finsure about the top technology tools they use to help brokers and their clients.
“We built 86 400 from the ground up using the latest technology to solve borrowers’ and brokers’ pain points,” says 86 400 head of lending Melissa Christy.
“It’s the key to making the whole application and approval process easier, which means less time spent preparing the deal and assessing the deal, resulting in faster approval times.”
OnDeck Australia CEO Cameron Poolman says the fintech’s smart use of technology is one of its key points of difference and it is committed to helping small businesses reach their full potential by providing unsecured loans via a streamlined online loan application process.
“We know that brokers and small businesses are quick to embrace new technology, especially when it simplifies processes to save time and money,” Poolman says.
“By continually exploring new technologies, such as our innovative new risk-predicting model The KOALA Score™ and Lightning Loans, OnDeck is at the vanguard of delivering a more efficient service to both brokers and their small business clients.”
Adam Croucher, general manager third party banking at CBA, says that through its new third party banking strategy the bank is focused on improving the overall experience for brokers and making its partnerships even stronger to help them build and grow their businesses.
“We want to ensure CommBank is simpler and easier to do business with for our brokers, and the use of industry-leading technology platforms and tools, as well as the use of available data, is key to achieving this goal,” says Croucher.
Finsure general manager aggregation Simon Bednar says providing the most advanced technological solutions has enabled Finsure to become one of Australia’s fastest-growing aggregators.
“We now have more than 2,000 brokers in our network, which is amazing considering that Finsure only started 10 years ago,” says Bednar.
“By staying at the forefront of technical advances for our industry, we ensure our brokers and their clients are well serviced. We’re also advancing many more diversified technology solutions within our market-leading customer relationship management platform Infynity.
“Raising the technological bar allows our broker network to have greater confidence in attracting more customers, and we are seeing greater utilisation in response to this.”
86 400 uses Simpology’s Loanapp platform exclusively for broker lodgement, enabling a differentiated broker experience, says Christy.
“We worked with Simpology to customise their solution to integrate our digital ID, VOI and Smart Statements processes, which means no paperwork is required to be submitted with the application regarding ID or income and expenses.
“Illion’s BankStatements tool, MogoPlus, ID Matrix and OCR Labs for VOI are all integrated into Loanapp to provide our digital home loan experience.”
Loanworks is 86 400’s origination platform, which manages an application from submission to settlement, allowing the digital bank to create an automated and paperless workflow throughout the process.
“We use FMS to provide our eSign process for customers to digitally complete and sign their loan documentation,” Christy says.
“We didn’t use any software specialists, IT firms or consultants to develop the 86 400 home loan solution. It was developed by us in conjunction with our vendor partners – Simpology, Loanworks, CoreLogic, Mogo, Equifax and FMS.
Christy says the bank’s home loan proposition was developed by understanding the key pain points in the application process and “the broker and customer experience we wanted to provide”.
“We then asked all our technology providers into a room, back when we could all meet in person, to work out how we could develop the ideal process with their technology.
“We collaborated with brokers throughout the journey and invited feedback from experts like Jason Back, who at the time was managing director of The Australian Lending & Investment Centre.”
Poolman says the development of OnDeck’s proprietary small business credit-scoring system, OnDeck Score®, meant that the lender could quickly and accurately assess the health/creditworthiness of a business.
This year OnDeck also launched The KOALA Score™, its innovative and unique risk-predicting model that uses AI and machine learning to provide small businesses with faster access to funding, coupled with an uptick in funding limits.
Poolman says The KOALA Score™ has enabled OnDeck to introduce new Lightning Loans for finance of up to $100,000 based on six months’ recent bank statements and no asset security.
“These fast-tracked loans can be decisioned in less than 30 minutes and approved and funded to the customer in as fast as two hours, helping brokers to support their small business clients to seize opportunities as and when they arise.”
OnDeck also uses best practice pricing disclosure tools such as SMARTBox, giving brokers and small businesses a clear finance cost to determine the ROI of a funding decision.
Poolman says The KOALA Score™ and Lightning Loans were developed internally in 2020 using OnDeck’s own team of data scientists in Australia and the US.
“We also drew on feedback from the broker channel citing the need for a quick and easy application process and speed to funding to fine-tune our technology and capability in the local market.”
Croucher says CBA has a range of platforms and tools for brokers, and it has “doubled down” on technology investment.
“We have launched a new DigiDocs process for customers with a home loan in NSW, Victoria and South Australia.”
DigiDocs allows customers to receive, sign and return their home loan documents digitally, meaning faster settlements and a better overall customer experience.
CBA is continuously enhancing DigiDocs, which will support customers regardless of which state or territory they live in by Christmas.
“We have uplifted ApplyOnline and our internal systems to support changes to liability and conduct verification requirements to help improve the credit assessment process while maintaining strong consumer protections,” says Croucher.
CBA has launched a new serviceability calculator to provide a better understanding of CommBank policies, with in-built business rules, policies and guidance text. It will be integrated with broker head groups’ CRMs.
Croucher says brokers can already access CommBroker, a one-stop shop where they can obtain information about home loan products, including credit policy, pricing and features, and track and monitor loan application status.
Bednar says Infynity enables brokers to compare loan options from their panel of lenders within 30 seconds.
“Infynity has provided a significant boost to our service proposition for brokers and is the most up-to-date CRM in the market. It delivers cutting-edge customer management tools to help a broker remain on top of outstanding tasks and keep a strong line of communication with their clients.”
Infynity was produced in-house by Finsure’s technology development team in consultation with brokers, internal SMEs, and partners such as NextGen.Net.
Finsure’s recently launched Client Centre links all customer data directly to the broker’s account in Infynity, speeding up the application process and allowing brokers to focus on loan selection instead of chasing customers for information.
Bednar says Infynity recognises compliance as a business enabler, not an inhibitor.
“It allows brokers to monitor their behaviour and identify potential issues within the business before they become concerns. Needless to say, it has proven to be a game changer for our brokers.”
Infynity creates a centralised platform for third party application integration, allowing brokers to connect with their own partners as well as Finsure service providers. It is integrated with platforms such as NextGen.Net’s ApplyOnline.
“Finsure has also formed a partnership with software provider Drive IQ to boost the digital asset finance offering to its broker network,” says Bednar.
Christy says one of the fundamental advantages of 86 400’s process is that it collects verified data up front.
“Customers, brokers and our assessment team can then understand what the applicants actually earn and spend in real terms, not just guesstimates,” she says.
“It means that parts of the application are automatically populated for the broker around income, expenses, assets and liabilities. We don’t have to ask the applicant to find statements, rental agreements and payslips.
“It also means that we can automate decisioning and get faster turnaround times for applicants.”
Christy says 86 400 has received plenty of positive feedback from brokers.
“The process – wow! Super easy and straightforward. Even the customer was impressed. I’ll be raving about 86 400 and how simple the application process is and finding some more deals to send through,” said broker Damian Claridge.
In the words of broker Jason Eitel: “The way 86 400 handle applications is one of the most positive steps forward I have seen in 20 years of broking”.
And another broker commented: “The process is great, your products are great, and you are great. We are out camping, and to think I was able to prepare, package and lodge a successful deal with little more than a laptop and Wi-Fi in a car was amazing.”
Croucher says CBA has seen a direct correlation between the investment made – in streamlining its processes and introducing new products and services – and the bank’s improved service levels.
“These have improved considerably over the past few months, with current turnaround times one to two days for simple deals and two to four days for more complex applications – leading all other major banks,” he says.
“Our FY21 financial result showed that 85% of applications via the broker channel are decisioned within two days, which is a direct result of our focus on operational execution in the third party channel.”
Feedback from brokers and head group CEOs has been extremely positive.
“At a recent event with head group CEOs, investment and service was called out as being a standout for CBA and the key to driving a strong partnership between head groups and the bank.”
Ensuring the bank’s products and services are fit for purpose and address the challenges faced by brokers is key to their adoption, says Croucher.
“We have listened to our broker partners and made significant investments in our operating model, our broker application system and processes, the efficiency of credit officers, and the policies, processes and systems that support the broker channel.”
For example, CBA trialled CommVal, relying on feedback to ensure the product made things easier before rolling it out nationally.
At Finsure, Bednar says the Infynity system was designed with growth in mind, “meaning we had to get the foundation right”.
By using the latest technology and open-source architecture, Finsure is in control of its destiny and can introduce new tech features on a regular basis.
“Importantly, we don’t rely on the time frames of external development companies that may have other priorities that need to be addressed,” Bednar says.
“The response from our broker network has been overwhelmingly positive, which can be attributed to how we incorporated broker feedback into the design of the system.”
Infynity includes a “user poll” feature so brokers can vote on the features they would find most useful to add to the platform.
Poolman says technology will increasingly streamline the finance process and potentially expand opportunities to secure finance in the small business lending space.
“As a dedicated small business lender, OnDeck realises that the traditional ‘rear-vision mirror’ approach that banks use to assess a business’s ability to manage a loan is no longer relevant,” he says.
“This is particularly the case in the environment of the COVID pandemic, when past results can often be a poor guide to future outcomes.”
Poolman says OnDeck has always been a technology-driven lender, using the power of data to deliver best-in-class lending solutions for brokers and small business customers.
“We will continue to invest in new technology, and we are currently road-testing a new platform. Right now, it’s a case of ‘watch this space’.”
OnDeck launched its Know Your Score online scoring calculator in 2017, which in partnership with credit bureau Equifax has delivered more than 16,000 credit scores to Australian businesses.
Independent research conducted by Honeycomb Strategy on behalf of OnDeck shows 53% of small business owners are unaware that a credit-scoring system applies to Australian businesses, and 76% say it would be useful to know their score.
“A business credit score is a key factor that lenders address when considering eligibility for finance, and the applicable interest rate,” says Poolman.
These types of resources can help brokers educate their small business clients so they can improve their chances of securing finance.
At CBA, Croucher says as well as adding more than 150 staff its home loan operations in the past financial year, it has also invested in new technologies and tools to support the broker channel.
This includes Version 2.0 of CBA’s Home Loan Pricing tool, enabling brokers to get real-time, accurate pricing for individual deals; the CommVal platform which gives brokers access to CBA’s valuation and property database so they can provide the latest property values and order, receive and track valuation requests prior to application; enhancements to the connection as well as data that flows between CBA systems and head group CRM platforms; improvements to the timeliness of the data and ‘time to yes’ information made available to brokers; and enhancements to the ApplyOnline service, improving the document upload and checking processes to reduce effort and duplication by the broker.
Christy believes the key players using technology are mostly those in the direct home loan space.
“I think in the next 12 months we will see more and more players enter the broker space with digital offerings and automated decisioning,” she says.
“86 400 will continue to be an innovator in the digital home loan space and has an exciting roadmap of initiatives planned to further refine and enhance our experience, but as you might expect, we hold our cards close to our chest.
“We have received a lot of amazing feedback from our broker partners and customers and will continue on our path to put more Australians on the financial fast track with their home loans.”
Christy says 86 400 is looking forward to the time when open banking is fully adopted by data holders, making the process even more seamless for brokers and customers.
