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While lenders are embracing digital ID verification processes, one mortgage broker said there is a lack of industry-wide adoption.
As demand for mortgage brokers rises, driven by 11 rate hikes in one year, brokers are seeking ways to improve efficiency and productivity, with many taking up digital ID verification to fast-track loan applications.
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However, the absence of streamlined digital ID processes poses challenges for brokers.
Alex Brownbill, who heads up Australian Medical Finance, a brokerage specialising in providing home loans for medical industry professionals, highlighted the benefits of using digital ID verification.
The process has significantly expedited application processes, with ID verification taking less than a minute, he said.
“From the clients’ perspective, they do it at a time that is convenient for them, and it takes about 10 minutes to do the whole process for both the client and the broker,” he said.
Speaking to The Adviser, Mr Brownbill expressed his satisfaction with fintech IDVerse, which employs advanced technologies such as optical character recognition, document fraud assessment, liveness detection, and face matching.
“I was blown away,” he said. “It was light-years ahead of any other process because we don’t have to meet with a client.”
The process works by receiving a link via a text message before the client is prompted to take a photo of their face, scans their IDs such as passport and driver licence, and confirm their details.
As the technology progresses, the government has announced it will provide $26.9 million in 2023–24 to sustain and develop the next stage of the digital ID program, as part of the 2023–34 federal budget.
However, the lack of a standardised process for the third-party channel to utilise digital ID and directly transmit data to lenders presents a setback for brokers.
Brownbill explained that banks’ regulations and processes have not caught up with technology, with some still requiring face-to-face ID checks or videoconferencing for ID verification.
“One of the hurdles that we have to overcome is that the banks’ regulations and processes quite often haven’t caught up,” Mr Brownbill said.
“Even though they might be using it internally ... they haven’t made that part of the process for the third party.
“They need either industry or aggregators to start pushing for universal reform from lenders to allow this through the broker channel.”
He emphasised that although aggregators are “pretty good with integrating technology” into their platforms, their capabilities depend on what final lenders allow, leaving brokers at a disadvantage.
As such, “brokers are getting left behind,” he said.
Fraud not a concern
Meanwhile, despite fraud on the rise in Australia, Mr Brownbill said concerns hadn’t been raised with his clients.
“We’ve had out of the dozens, hundreds of clients, we’ve implemented this with we’ve had one client ever asked to see the privacy policy. And that’s it,” Mr Brownbill said.
General manager APAC at IDVerse, Paul Warren-Tape, added that the technology has third-party protections built into its agreement with its clients.
“This ensures that our product remains accessible, and all data is safe and secure at all times, with recourse if there are any incidents/data breaches, etc,” Mr Warren-Tape said.
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