Real-time loan pricing tool launches for brokers

Built into the Stryd Broker platform, the repository was built in partnership with Consumer Data Right (CDR) technology provider Adatree and aims to accelerate the identification of new growth potential through trusted risk and loan data services.

By scanning a range of data from multiple sources, including Product Reference Data (made publicly available by Australian banks in compliance with their CDR obligations), the platform finds “the most competitive” product and pricing offers available for their clients.

The tool aims to help brokers work more efficiently and help them protect their back book by identifying customers most at risk of refinancing.

Brokers can provide a list of customers and generate consumer CDR requests for them. Once a customer completes the CDR consent, the broker can automatically monitor loans for more competitive offers.

The Stryd Broker Platform uses the key data for the customer’s account(s), obtains an up-to-date security address valuation to process the loan, and finds the most competitive product and pricing offers available for that loan by comparing and cross-matching the relevant data against the Stryd Product Repository.

Currently, there are 60 lenders in the Stryd Product Repository, believed to be one of the most comprehensive repositories of live open banking data for mortgages in market.

Stryd said the number of lenders will increase to 76 in the coming days, with more expected to be brought online in due course.

68% of loans received a better rate

The product has been launched following a broker pilot. While piloting the tool over a period of two months, 10 broker participants processed 558 loan records, with a more competitive product found for more than 68 per cent of them (a total of 377 more competitive offers).

The total loan value of better offers identified was $115.5 million.

Of the 377 loans where a more competitive offer was identified, 70 loans had a more competitive rate of up to 2.0 per cent and 28 received an offer in excess of 2.0 per cent compared to their current rate.

A further 128 received an offer that was up to 1.0 per cent lower than the customer’s existing rate and 151 loans received an offer up to 0.5 per cent better than the borrower’s current rate.

Of all the customer loans reviewed, the largest proportion (21.4 per cent) of borrowers that could find a better deal elsewhere were currently CBA customers.

Ruth Hatherley, founder and chief executive of Regchain, commented: “Approximately 69 per cent of Australian mortgage holders are not on the best interest rate, and for mortgage brokers to find them a better deal, they need real-time visibility on what deals are out there in the market.”

She noted that the broker pilot had identified that brokers could be protecting their trail income by harnessing the tool – highlighting that if the market average trail commission of 0.15 per cent was applied to the $115.5 million, this would equal $173,241 in trail.

The platform has since processed over $46 billion of home loans through Stryd. It currently has a strategic partnership with Effi and is reportedly working with several large aggregators to explore integration with their APIs to allow a pass-through of the data to their lodgement systems.

CDR data quality a major problem

The fintech said it had been working on the infrastructure for the Stryd Product Repository for the past 18 months but has been challenged given the poor quality of data being provided by lenders through the open banking ecosystem. Indeed, the roll-out and expansion of open banking have been delayed given these data quality issues – a problem which has been flagged by the ACCC as a key regulatory focus.

Given the issue, Regchain™ has been undertaking extensive work to review the data quality of lenders’ product detail APIs to determine which are fit for use, which need rules applied, and which require remediation by the lenders for the product to be usable.

The white paper, Democratising Data for the Good of Consumers: Unlocking the potential of better quality Product Reference Data, reviewed 1,600 individual home loan products offered by 86 bank brands.

It found that 768 home loan products had data quality problems, with other CDR data quality issues including incorrect loan purpose, missing LVR or loan amount, product names, and duplication.

“To power our Stryd app and ensure the best data, we address data quality issues with business rules, cross-referencing to publicly available information on websites and manual reviews,” Hatherley said.

“The good news is that product reference data quality is getting better because it’s an enforcement priority for the ACCC.

“We are working closely with them to let them know on a weekly basis what we’re seeing at the coalface with respect to incorrect interest rates, missing data and the misuse of free text fields when there is a relevant structured field.”

Rehan D’Almeida, CEO of FinTech Australia, noted the launch of the new repository tool: “CDR’s purpose is to improve consumer choice, convenience and confidence. The Regchain Stryd tool is a great example of a fintech app that is using open banking to make a positive impact on the finance industry and consumers.

“By supporting mortgage brokers to help borrowers save money on their mortgage, it’s playing a part in tackling Australia’s housing affordability crisis.”

[Related: 65% of broker back book not on most competitive loan]