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The non-bank lender is using AI to detect and limit fraud and speed up applications, but it remains conscious of the tech’s limitations.
Bluestone Home Loans (Bluestone) has described how it is increasingly leaning into artificial intelligence (AI) through partnerships but says it views the technology as enhancing rather than replacing brokers.
At an event to celebrate 25 years of lending on Wednesday (12 March), Bluestone hailed recent growth, teased more product launches later this year and described how it was embracing new partnerships to capitalise on AI’s benefits.
Speaking exclusively to The Adviser, chief commercial officer Tony MacRae outlined how Bluestone was working to speed up application processes and cut unnecessary documentation while minimising fraud risks.
The non-bank lender has partnered with AI-driven document processing and verification platform DocuScan Australia (DocuScan), which aims to automate document verification while improving fraud detection through authenticity checks.
The tech is designed to automate document-heavy processes for faster decision making, greater regulatory compliance and cost cutting.
“[It’s an] amazing piece of AI that is far more efficient and accurate than the human eye in picking these [fraudulent] things up. And so, that’ll become a key part of our defence,” MacRae said.
Mortgage fraud is a hot topic in Australia after recent research found that younger Australians, in particular, have a laissez faire attitude to lying about their financial situation on finance applications.
Along with harnessing AI tools to flag fraud, MacRae emphasised that Bluestone was focusing on making better use of available data to get a fuller picture of customers and was using tools from credit reporting agency Equifax to ensure that it understands customers better.
However, despite its clear use, MacRae told The Adviser he was mindful that AI could not replace brokers and that customers may be wary of it.
Recent research found that 69 per cent of brokers do not think AI impacts how clients are engaging with their finances.
Borrowers are also sceptical, with 80 per cent of those surveyed saying they would not trust an Al chatbot to provide accurate financial information, education or advice.
MacRae said: “I think AI gets bandied around too liberally, and a lot of people don’t really understand where it is. I think it will evolve. But I think as an industry, as a business, we need to just understand its capabilities better.”
He underlined that technology would not be able to replace the human touch that brokers offer.
“[We] see it growing but the key thing, for me, is I see it supplementing the great experience that brokers and lenders like us do, not replacing it.
“The most important financial decision that most people will make is getting a home loan. People like the comfort of having someone help them through that. And so brokers are important,” he said.
Looking ahead, MacRae explained that AI had limitations in understanding the full customer picture.
“Our business was built on looking at differences and finding uniqueness. And so, we will always look beyond just the pure numbers to understand the customer story,” he said.
Non-banks were a ‘novelty’
Since Bluestone was founded 25 years ago, the broking industry has undergone considerable change.
Broking had only been around for less than 10 years when the lender launched – but the channel now writes a record 76 per cent of all new home loans – and trends indicate that figure is likely to keep growing.
Commenting on how the industry has evolved, MacRae acknowledged major changes to competition.
“Some of the big changes are just the number of players in the industry and the competition that creates,” he said.
“If you think, 25 years ago, low doc and credit impaired [lending], they were just cut out of the market, and that was why Bluestone established itself. Today, it’s probably about 20 per cent of the market.”
MacRae added that along with more brokerages, lender competition had also surged.
“Twenty-five years ago, banks dominated the market. An entrant like Bluestone was sort of a novelty.
“Now, the role we and other non-banks play is so critical to providing credit to people that, without us, would be completely left behind,” he said.
[Related: Bluestone teases fresh lending products this year]
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