Calls for aggregator inclusion in new CDR

The Loan Market Group – which represents Loan Market, PLAN Australia, Choice, and FAST – has argued that brokers need aggregator-designed technology to deliver the customer outcomes open banking was designed for.

The submission is in response to the release by Treasury of new draft rules for consultation to amend the CDR so that consumers can share their data with “trusted professional advisers”, including mortgage brokers, without those professionals requiring to fall under the same regulatory obligations that apply to data recipients.

The amended rules would mean that a CDR consumer can consent to an accredited data recipient (ADR) – such as their bank – disclosing their CDR data to their nominated trusted adviser, and enabling the lender to invite their customer to nominate one or more trusted advisers to share their data with (but the ADR cannot nominate the trusted adviser themselves).

Under the CDR system, consumers can consent to a transfer of their data from a data holder to an ADR, or from one accredited person to another. An ADR would be accredited by the Australian Competition and Consumer Commission (ACCC) to receive consumer data to provide a product or service.

Interested parties had until 30 July 2021 to respond to this consultation.

Role of aggregators unclear in CDR

As such, in its submission to the CDR extension, the Loan Market Group chief compliance and regulation officer David McQueen has pointed out that “the role of aggregators is unclear in the new CDR proposal”.

The submission warned that should aggregators be excluded the benefits of open banking to customers (including using their own data for faster and “better” financial decisions) would be lost through complexity.

The submission also stated that involving aggregators would simplify the complexities of data sharing, including technology integration and risk management processes.

It further stated that allowing aggregators access to the data of consenting customers (that was then securely passed to the broker) has better allowed brokers to fulfil their client’s objectives.

Commenting on the submission, Mr McQueen said brokers needed aggregator technology to monitor and manage customer data through “the lifecycle of the adviser-client relationship”.

He also said that the aggregation group “wholeheartedly” believes that brokers should be considered trusted advisers within the open banking regime.

However, he called for clarity on the role of aggregators in the new CDR proposal.

“We believe holding a credit licence isn’t enough for brokers to add real value for their customers in the scheme,” Mr McQueen said.

“Brokers need the digital infrastructure aggregators deliver at subsidised cost to protect and optimise the sharing of their customer data. Aggregator support would ultimately save brokers time and keep them safe in compliance.”

In addition, Mr McQueen posited that allowing aggregators to receive data would help reduce loan application turnaround times.

“Allowing aggregators, on behalf of brokers, to access verified data flows – instead of unverified documents – can significantly reduce home loan processing time,” he said.

Brokers worked in the best interests of their clients by providing them with wider and informed options, which aligned with the objectives of the CDR, Mr McQueen added.

“To restrict the access of brokers, as trusted advisers, to their customers’ data would effectively mean open banking has hit its limit in enhancing the customer experience,” he said.

Loan Market expands Qld support team

Loan Market has made two appointments in Queensland to grow its network and support existing business owners.

Former Commonwealth Bank of Australia (CBA) relationship manager, third-party banking, Samantha Barnett has been appointed state growth manager.

She has joined the aggregator after a decade at CBA, including the last five years as a BDM working with Queensland brokers.

Speaking about the focus of her new role, Ms Barnett, who is a Kaizen process advocate, said that 90 per cent of Queensland brokers she encountered in her CBA BDM role were currently “flat strap”.

“But many of them are spending too much time in the business rather than on it,” she observed.

“They’re working 16-hour days without the returns you’d expect because it’s taking longer to get a deal done and they don’t have the right processes or tech to service the heightened demand.

“A lot of the time, they want to get back a work-life balance for their mental health. Showing them how Loan Market has the tech to save them time and keep them safe within the new regulatory environment will be a large part of my focus.”

The aggregation group has also appointed former WLTH lending support manager Taryn Howe as broker success manager.

Ms Howe, who has a background in neobanks, will help Loan Market’s Bring Your Own Brand businesses utilise the aggregator’s digital tools.

She said that broker requirements are changing rapidly, particularly in relation to regulatory terms and client expectations.

“Loan Market has welcomed a lot of new customer service managers (CSM) to the network over the last year,” she said.

“These CSMs are tech savvy and I’m looking forward to helping them drive the digital capabilities of their brokers – something which has proved critical in lockdowns.”

Loan Market Queensland director Andrew Thompson welcomed the new appointees while noting that the group’s settlements in the state were 63 per cent higher than the same time last year.

“Confidence is strong… there’s a buzz in the air about what the 2032 Olympics will deliver to Brisbane in terms of infrastructure, private investment and job creation,” Mr Thompson said.

“Queensland is really in for a defining period in its history and I’m very pleased to have Samantha and Taryn join Loan Market to help our businesses make the very most of this exciting chapter.”

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