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The major brokerage has announced that it engaged a third-party company, PwC, to complete an audit of its systems and procedures ahead of the best interests duty for brokers.
Loan Market executive chairman Sam White said he wanted a “transparent” assessment of how brokers were preparing loans in the lead-up to the introduction of the best interests duty for mortgage brokers in 2021.
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“I wanted a transparent review, which is why we engaged PwC. For instance, there are industry-wide challenges around note-taking, and we’ve developed insights through this review on how to make that easier and more comprehensive,” Mr White said.
“No industry is perfect, but with the arrival of BID later this year, there’s certainly an opportunity for brokers to take their development of files to the next level to support the wider customer experience.
“We know we have to keep disrupting how brokers do things to stay connected with the changing behaviours of customers.”
PwC’s review of randomly selected home loan lodgments found that Loan Market brokers benefitted from an executive team effectively managing risk and compliance obligations.
The review highlighted some of the brokerage’s mechanisms put in place to support its compliance and risk mitigation including:
- Dedicated audit teams employing standardised reviews;
- A considered approach to customer complaints that involve the risk and compliance team capturing, recording and tracking issues to uncover the catalyst of the problem;
- Scheduled and reported training of brokers on compliance, responsible lending and privacy through CRM training platform Springboard;
- Shadow shopping, which uses real customers, focusing on measuring and tracking customer experience with the brokers.
The brokerage also has an offshore broker support to assist brokers who don’t have administrative staff still receive “highly trained compliance support”.
Commenting on the audit, newly appointed chief compliance and regulation officer David McQueen said: “The PwC review has provided us with a great opportunity to confirm that we are leading the way in our approach towards risk and compliance, but also, and more importantly, with an opportunity to reflect and guide our thinking as we approach BID.”
“When I was at Westpac, I held a very strong appreciation of the standard Loan Market set in its file processing. Through this review, we have the information to take brokers’ quality to a new level, which will protect them and deliver more to their customers.”
Paul Bakker, former national manager of strategic partnerships at Westpac, collaborated with Loan Market and PwC on the review.
“Loan Market has always had a strong reputation for their approach towards compliance and collaboration,” Mr Bakker said.
“It was a pleasure to work with Loan Market on the PWC review, and their approach towards the process was always constructive and transparent and very much aligned with ours – that is, to focus on continuously looking at ways to drive even better customer outcomes.”
