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Open banking may have gotten off to a rocky start, but the recent reset of the Consumer Data Right (CDR) points to a bright future. We sit down with Renee Blethyn, head of broker partnerships at NextGen, and Maëlle Debeugny, product lead for data for open banking provider Frollo, to learn about the key developments in the space, including the increased adoption of artificial intelligence (AI) solutions, and what’s in store for the third-party channel.
The government announced it would ‘reset’ the Consumer Data Right to deliver better consumer outcomes. What’s your take on this move?
Renee Blethyn (RB): We were enthused by the announcement from [Assistant Treasurer and Minister for Financial Services] Stephen Jones about the CDR reset, particularly around the planned ban on screen scraping, which we think is great for consumers in terms of the safety aspect of their data. From a mortgage broker’s perspective, we are hearing brokers that are using and have used screen scraping-type services are getting a bit of resistance from consumers around that as they become more aware of the safety of their data.
Maëlle Debeugny (MD): The bundling of consents is also something we’re excited to see being rolled out. It will allow consumers to provide two types of consents in one, so both the collection of their data from the banks and at the same time providing that data to their trusted advisers.
For mortgage brokers, it’s a more streamlined user experience that will also be a simplified experience in terms of the language used as part of the consent flow, to ensure customers aren’t overloaded with information and are very clear on the consents they’re providing.
Q. How could the CDR reset impact mortgage brokers’ work?
RB: What’s great about the CDR and open banking is the protection it provides to consumers. What is a bit challenging is the amount of information we have to provide to meet our legislated requirements. That’s what has been really exciting about the changes announced in that reset – the ability for us to streamline that process. Brokers are going to really benefit in that space.
An example would be if you have the Financial Passport module within [NextGen’s] ApplyOnline® application. By matching the broker’s identification and the customer’s identification, it will trigger the recall of open banking information relevant to the applicant and auto-populate the application so the broker doesn’t have to do multiple data entries and/or different consents.
Q. How is Frollo using open banking and artificial intelligence (AI) to benefit brokers?
MD: We’re using AI to help categorise our users’ transactions. We’re committed to our excellence in data and this is critical to provide a Financial Passport of quality to brokers. We want to provide the best experience no matter the applicant’s bank. But we know the core banking systems are very different from one bank to another. Transactions can look very different.
Our mission is to make sure that, no matter the bank, we provide this breakdown of expenses and income in the same way. For that, we’re using more than 15 different open banking fields. This is all of the richness of data that we have access to through the CDR. We’re learning not from one or two banks, but from the 100-plus banks already accessible via the CDR. This is a very rich dataset.
The beauty of what we’re doing is that it’s not any static rules that may give a distorted version of the truth. But with ingesting so much data from different banks and different types of applications, our machine learning models are learning from constant, new data feeds and improving. So, all scores are dynamic and reflect different scenarios, employment types, and changes of seasonality.
Right now, income detection and income scoring are live for mortgage brokers within the Financial Passport Insights PDF. And what that physically looks like to a broker is a dashboard that’s like a traffic light system. So it’s amber, green, red, depending on the score. What it is doing is giving a broker an indication of where they either need to look for more information, ask more questions of the client, and or consider specific lenders.
Q. How are you continuing to evolve what NextGen provides brokers?
RB: What brokers are telling us is they want more visibility and richer insights in transactions, which is helpful in terms of giving them that instant snapshot of this borrower. An example of some of the insights we’re going to be sharing in the coming months is a summary of not just buy now, pay later accounts, but a full count of the number of accounts a customer has.
That’s something that we know is a key part as to whether a customer is fit for finance right now and what things they need to look at to get into a better position.
Brokers are the best at being able to coach and guide consumers on that pathway.
Q. What advice would you offer to brokers looking to harness open banking?
RB: I think we are going to start to see a combination of services as one package, for example, energy and telecommunications bundled with financial services using open banking. Brokers, as trusted advisers, are going to be front and centre, guiding customers through those solutions.
I would encourage any mortgage broker to learn what they can about open banking. NextGen runs awareness sessions every single month. It’s free to attend and it’s just one hour. You get CPD points and you will actually see a live demo of how our solution works and integrates with ApplyOnline. We obviously think that it’s market leading because it provides that efficiency.
We would love to see as many brokers as possible attend those sessions and then talk to their aggregator about being able to have that service available to them.
Visit https://nextgen.net/applyonlinewebinars/ to sign up for free.
You can hear more about NextGen and Frollo on The Adviser In Focus Podcast.
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