The feature uses AI models to transform complex sets of information into easy-to-understand metrics to help assess income.
Part of the consumer data right (CDR), Open Banking has promised to facilitate a simple and regulated transition of data between different financial services since July 2020.
Since then, NextGen worked to bring the benefits of the framework to the mortgage industry, with major banks like CBA integrating the provider’s loan lodgement platform, ApplyOnline.
Available as part of the Frollo Financial Passport 'Insights Report', NextGen’s latest feature introduces 'income regularity scores' for applicants.
The scores measure the consistency and stability of an applicant's employment income streams across three dimensions; amount consistency, payment regularity, and payment longevity.
Renee Blethyn (pictured above), NextGen's head of broker partnerships, announced the feature during a technology panel at the MFAA Conference last Friday before the association’s national awards.
"This new income verification capability represents a significant leap forward in how we use Open Banking data," Blethyn stated. "It's another time saving tool to assist mortgage brokers, making the process faster and more accurate than ever before.”
NextGen's Open Banking solution leverages CDR data to provide mortgage brokers with comprehensive financial insights on their clients for home loan applications.
“We believe open banking is the safest way for you (brokers) to be able to work with your clients in terms of them sharing data with you and sharing that with lenders to enable a smooth transaction process,” said Blethyn at the conference.
This addition positions NextGen as the first in the market to offer income detection and verification specifically tailored for home loan applications.
Through its partnership with Frollo, NextGen said the solution delivers accuracy in income assessment.
Mary Khatchadourian, mortgage broker and director of Vault Finance, agreed with this assessment after signing onto a pilot through her aggregator, Finsure.
“I heard of open banking so I jumped on straight away. I love technology and I knew this was going to be a game-changer,” said Khatchadourian. “It’s a vital part of our business and probably the most important tool we use.”
Khatchadourian said technology like open banking is making her job easier.
“The more information I have from the client, the better the outcomes are going to be for everyone, for the bank, for the client, and for me,” she said.
“When we did send out to the clients, we pre-position them. They knew what they were getting, and they had links to the website so they can read more about it.”
Khatchadourian noted her team was using a different tool to collect financial data, but they found it wasn’t as secure.
“Security is a big thing. It’s really important for technology to be safe,” she said.
Besides finding it secure, Khatchadourian said the biggest advantage of NextGen Open Banking was its “speed and accuracy”.
“We won’t submit an application and get an email from the assessor saying that we’ve missed a personal loan repayment or there’s private school fees. We see that all before it even gets to application,” she said.
“It makes our lives much easier and the process much faster.”
Blethyn emphasised the broader implications of this technology.
"By simplifying the income verification process, we're not just saving time for brokers and lenders. We're ultimately improving the home loan application experience for countless Australian consumers,” Blethyn said.
“This is about making the dream of homeownership more accessible through smarter, faster processes.”
