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A growing number of lenders are overhauling their mortgage origination systems and turning to tech to improve and speed up their loan origination processes.
Australian lenders are on the cusp of a transformative technological shift that will fundamentally change how loans are processed, approved, and serviced, according to a new independent report commissioned by technology solution provider NextGen.
In a new report, Second generation technology: Banking on the next transformation, published by the thought leadership division of The Australian Financial Review and NextGen on Tuesday (18 March), generative artificial intelligence (AI) and quantum computing are propelling the next generation of digitisation in Australian retail banks.
According to the report, while many financial institutions have faced “significant challenges integrating new technologies with legacy systems”, new opportunities are emerging for lenders to enhance their service offerings across all channels, from online mortgage applications, and digital document and ID verification, to reducing loan processing times.
The report said that this can be done through Software as a Service, highlighting that NextGen’s own solutions – such as ApplyOnline® solutions – are already doing so. For example, it flagged how mutual lender Beyond Bank has recently embraced tech, including AI, to reduce loan approval times and improve loan processing systems.
Beyond Bank uses tech from software supplier NextGen, which has reportedly helped cut loan approval time to between 24 and 48 hours, while also saving an estimated 300,000 pieces of paper annually, according to the report.
The lender said it has also been able to cut the risk of human error in its system through automation.
Several other lenders have made moves to overhaul their tech systems recently.
MA Money has become the latest non-bank lender to embrace technology in a bid to grow its loan book and strengthen customer service.
The non-bank lender is set to launch a new loan origination platform, Cinch, promising more automation and new features.
The platform will be released to the wider market later this month and is aimed at building on the 155 per cent year-on-year growth in its loan book.
Cinch was created by Ingenuity Partners, which previously built origination solutions for brokerages and lenders, including Athena Home Loans.
Cinch Technology managing director and Ingenuity Partners founder, Kyle Dunsire, said the platform would continue to add more features, with new AI agents leading to more automation.
The platform will reportedly simplify lending, with automation to reduce manual work, cut costs, minimise risk, and ensure compliance, Dunsire said.
Commenting on the tech, MA Money head of credit and risk, Thierry Merand, said: “Cinch has been a game-changer for our team, streamlining the credit assessment process with automation that improves both speed and accuracy.
“It allows us to maintain strong risk controls while ensuring a smooth and efficient experience for our brokers and customers.”
AMP Bank is also about to launch a new end-to-end loan application system, developed in partnership with Simpology and MSA National, in the second quarter of this year.
The tech can run upfront income verification and pre-populate income data into loan applications, helping fast-track time to loan approval and improve fraud detection.
Meanwhile, digital bank Ubank is also relying heavily on tech to simplify the digital home loan lodgement process.
The lender rebuilt its mortgage broker platform in response to user feedback as it seeks to deliver a better online experience for brokers and their customers.
Speaking to The Adviser, Ubank’s head of broker distribution, George Srbinovski, said the new platform has automation built into its application review process, a tool used by the bank to better understand its customers and deliver faster credit decisions.
“Within one email, we do verification of identity, privacy, consent. So that’s gone from multiple touch points back to the customer down to one,” Srbinovski said, adding that it had cut the time and hassle linked to admin for brokers and clients.
Years of investment in technology by lenders have helped them consistently cut times for broker applications to record lows, according to the latest Broker Pulse survey.
[Related: Ubank upgrades broker platform after seeking out user feedback]
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