How the broking industry could benefit from CDR data

Speaking to The Adviser following the announcement that MogoPlus had partnered with open banking fintech TrueLayer to access customers’ CDR data, Mr Page noted that while practical use cases of CDR had so far been limited, the mortgage broking industry could expect to see more benefits rolling out in due course.

Mr Page said: “I think the focus [so far] has been very much on the regulatory compliance level, as it should be. Most banks are now accredited as data recipients. And now they’re looking at how can we turn that from a compliance journey into a real business opportunity, a differentiator? 

“I think we will start to see the use of CDR data in different lending journeys. And I think the banks will probably lead that within their direct channels first. But then I think with the trusted adviser position that brokers have, we’ll quickly see some of the aggregators putting in similar journeys as well, using insights and analytics as the driver.”

According to Mr Page, these use cases could include:

• Harnessing predictive analytics to analyse spending/saving behaviours and nudge the broker to proactively contact customers when the data predicts that they’re mortgage ready
• Predicting when borrowers will be facing hardship (which was adopted by some lenders recently to assess COVID-19 hardship) and flagging behaviours and trends that require intervention to prevent borrowers from going into hardship
• Establishing an industry-standard set of affordability results that isn’t lender-specific
• Providing aggregator-specific set of affordability and serviceabiity configurations that enable brokers to conduct affordability assessments/serviceability across all lenders on the panel

Mr Page elaborated: “Where CDR data can be passed to trusted advisers by an accredited party and the broker/aggregator can also now plug in analytics and insights from people like us, it could do two things: One, get a industry standard set of affordability results that isn’t lender specific. And secondly – and this is the next horizon I think – use the same data set that’s been collected without any lender-specific processing and run it through the lending configuration of each lender.

“So, in effect through an aggregator layer, a broker could say: ‘Okay, we’ve done a standard data collection on you, Mr Customer. We have three or four banks on a shortlist that could provide you with a loan, given your circumstances’ (And obviously that’s not just about transaction history, that’s about other factors as well, depending on the product).

“That same dataset can be run through the affordability and serviceability configurations of each of those four lenders and effectively, it means that results or affordability assessments and offers could be made at the point of the broker doing it over the counter with the customer… and seeing quickly that they’ve passed all this expense and qualification for serviceability. 

“That could be provisional, or it could be a full approval, depending on the risk appetite of the lender.”

Mr Page outlined that MogoPlus is also “moving into predictive analytics”, which would enable the broker to proactively reach out to customers when they’re deemed ‘mortgage ready’.

“Using the same data sets, we could be looking at patterns and enabling the broker to say... ‘You might want to save your first home loan. We can tell you when you’re ready to do that, rather than you thinking that you’re ready or coming to knock on our door or someone else’s door’,” Mr Page said.

“Likewise, the consumer could set savings goals, for example, and the data can be accessed and when either the lender or the broker was facilitating that data is ready, the proactive nudge approach can be taken.

“We need to have a data-first approach to really provide much better customer experience, faster decisioning and less operational costs both for the broker groups at the aggregator, and then the lender.

“That would mean the consumer gets a lower friction journey, the broker gets a more efficient use of the data, and – potentially through an aggregator platform – it could bring the credit rules and serviceability measurement in close to the broker and consumer interaction. So the broker can cover more ground more efficiently, and everyone saves by reducing paperwork and any inaccuracy that that creates.

“That’s the next wave of insights that we’ll start to see emerge, we think in the next 12 months,” he said, highlighting that this would provide the mortgage distribution channels with more opportunities to identify when borrowers might be requiring their services, earlier.

Find out more about what the new CDR rules for trusted advisers mean, how brokers could take advantage of the new rules, and learn how to harness open banking to gain instant access to a comprehensive, verified, up-to-date view of a client’s finances at The Adviser’s 2022 Better Business Summit (due to begin on 28 April).

NextGen national head of broker partnerships Renee Blethyn will unpack the CDR regime and explain how to harness rich data to assign income, spend categories, assets, and liabilities through automation.

The Better Business Summit 2022 will be held in April, May and June across five states.

Themed “Digital Broker”, a variety of speakers will provide brokers with the tools and knowledge to harness technology to increase efficiencies and succeed in their businesses.

The Better Business Summit 2022 will be held in the following locations:

• Brisbane, 28 April 2022 at Sofitel Brisbane Central
• Sydney, 5 May 2022 at the Australian Turf Club, Royal Randwick Racecourse
• Adelaide, 12 May 2022 at the Adelaide Convention Centre
• Perth, 19 May 2022 at Crown Towers
• Melbourne, 2 June 2022 at Crown Towers

Click here to buy tickets to the summit for $249 and make sure you don’t miss out! 

Alternatively, attend the summit for FREE by becoming a member of The Adviser. Click here to learn more.

For more information about the 2022 Better Business Summit including speakers and agenda, click here.

[Related: Giving brokers CDR data shows they’re ‘professional class’: NextGen]