Australia’s mortgage technology revolution could show UK the way – Torpey

With the Australian mortgage market now going from strength to strength, it seems like a good time to examine the technology lessons to be learnt from our colleagues down under – and how they could apply to the UK?

First, it’s important to note that there are largely only two types of software used during the mortgage application process in Australia: the sourcing systems being used by aggregators and NextGen.net. Each aggregator in Australia (the equivalent of a UK mortgage club or network) has its own sourcing system, which brokers use as a comparative, compliance and customer data capture tool to connect with lenders.

It is the lender’s responsibility to keep its criteria updated on the sourcing systems, which effectively filter lenders based on the customer’s circumstances, such as their salary, requested loan value, deposit amount.

Once the most relevant lenders have been identified, the next stage is applying and submitting the application through NextGen.Net. This is where the Australian market really differs from the UK.

Market monopoly

Established in 1993, NextGen.Net is Australia’s leading industrywide technology provider, with 97% of brokers and over 50 lenders using its electronic mortgage application platform, ApplyOnline.

In the UK, applications must be completed through each lender’s broker portal system. As a result, if the application is rejected, the whole application process needs to be restarted and reformatted for a different lender’s customer relationship management (CRM) system. Clearly, this process is time-consuming for the broker and the customer alike.

By contrast, NextGen.Net’s ApplyOnline solution offers a standardised data format approach that integrates every lender’s CRM application into one holistic system. This standardised approach ensures that even before an application is submitted, it is of the highest quality and has the highest chance of being accepted.

Several key processes take place while the application is being completed. Right from the start, ApplyOnline assesses the specific lender policy and the borrower data to inform brokers of the exact supporting documents that are required to package the loan correctly.

More than 5,000 criteria rules are also being checked while the form is being filled in, from how a hyphen in a customer’s surname is formatted to the way in which a mobile number needs to be input.

The lender’s credit policy is also collated and systematised, so that a broker can see how the application is aligning with the lender’s requirements in real time. For example, a bank may have a max loan-to-value (LTV) ratio of 80% in a certain location, but depending on the client’s address, the LTV could change. Having access to such a comprehensive and dynamic checklist means that the type of application, and the type of product needed, will ultimately determine what is available.

Real time validation

Lenders and aggregators work together with NextGen.Net to make sure that all Application Programming Interfaces (APIs) are up to date and valid. Lenders are able to make changes on the spot, so brokers are always up to date. Also, by validating all loan data in real time, lenders are assured the application is correct and within policy from the point of sale.

At this stage, the application is ready to be submitted, and the broker will be informed if the application has been accepted and if not, why not. Again, this marks another key difference in the UK and Australian mortgage application process. In Australia, this same application can be ‘cloned’, re-assessed and submitted to other lenders, without the need to manually complete every detail of the form again.

From a technology point of view, the mortgage process journey in Australia is clearly very different from the UK. The way in which customer and lender data is captured, validated and cloned should certainly give the UK’s mortgage sector food for thought.

No system is perfect, of course, but there are definitely some lessons to learn about the need to invest in technology that can streamline the application process for all concerned.