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By pulling together valuable data and market insights, NextGen.Net is helping lenders and aggregators prioritise areas of improvement as well as empowering brokers and customers. MPA speaks to Mike Ponsonby, account executive at NextGen.Net to find out more.
MPA: Can you explain to brokers what NextGen.Net’s benchmarking reports are?
Mike Ponsonby, account executive, NextGen.Net: For the last couple of years we’ve been working on building market data and industry insights. Our ApplyOnline platform processes over a million applications each year; that’s an enormous amount of data, which allows us to see what trends are happening.
Within a week or two of a new month, our customers get a really good lens on what happened last month insofar as not only their own performance but more broadly across the market. Our reports establish a benchmark point of view to help a lender understand what performance and behaviour they offer to brokers. I think it’s a great win for brokers to have lenders more informed; it enables a better outcome for broker experience and customers overall.
With application volumes, for example, they’re getting an understanding of what’s happening in loan purposes, because there are obviously a lot of different offers out in the market. Also, they’re understanding changes in higher- or lower-LVR lending, what the profile of applications looks like regarding how much are they borrowing, what the volume coming out of each state is, etc.
Time to approval has been a key report for many of our customers. It’s been really important for them to have visibility of not only time to a conditional approval but also time to an unconditional approval. We work with lenders to help them understand how they can increase digitisation in their loan application process for brokers.
When it comes to applicant ID, for example, the Document Verification Service, Supporting Documents service and eSign tool dramatically reduce the effort and time taken to manually collect documents and wait for wet signatures. And by helping lenders look at where greater data automation capabilities can be introduced, we can help them create operational efficiencies. We provide information specific to the lender and show them how they compare against the market. Then we work together with them step by step to help them achieve a faster, and sustainable, turnaround time.These reports really enable lenders to prioritise the biggest wins in change management that they can achieve.
MPA: How important has it been during COVID for lenders to keep track of how everything is changing?
MP: When the change happened across the community, we started providing weekly data. It used to be monthly, but we felt that lenders would want to be more informed around understanding changes in their own businesses. We started providing weekly data across application volumes, submissions, conversion rates, time to unconditional approval – so they were getting a far more detailed view.
Everyone was really unsure about what would happen with the market, and everyone had their crystal balls to work out whether the market would be decreasing or whether it would continue quite strongly. It was quite surprising that it didn’t drop off as much as many thought it might.
When that change came, we gave access to data in a timely manner, so they were seeing market data within 48 hours of every week. They were understanding what happened last week and then working out how they could effectively make decisions in the future week based on what they knew and not what they were guessing.
MPA: How can these reports help lenders improve?
MP: The reports have enabled lenders to see how they’ve been tracking over the last 12 months so they can ask how they can get better efficiencies in their credit operations areas to consistently turn around deals in a far more timely manner.
We’re now seeing that lenders are getting far more sophisticated in terms of what the time and experience is for certain customers that look like a certain application type.
A lot of lenders are saying, well, who are we targeting? Is it refinances less than 70% LVR, or 60% LVR? And if it is, let’s go out there and become famous for great service and great turnaround times so we can attract more of that business.
Lenders now are becoming quite smart, so not only does an offer of a cashback or a refinance or an interest rate become more attractive, it’s also the experience you become famous for.
That’s a great offer because it’s intangible; it’s providing not only a cashback but an efficient business that’s set up to sustainably provide good service for customers. I think that’s become really powerful.
MPA: In what areas are aggregators using your benchmarking reports?
MP: They’re in a really strong position because they’re getting better, more factual access to data where they can actually keep track of the lenders that are on their panel and what the experience is that those lenders are providing insofar as consistency and turnaround times for their brokers. They’ve been able to have more informed conversations with lenders, which has been really good.
It also comes down to quality of applications. The data has been able to drill down into things like the quality of applications that might go from one broker group through to a lender. Then they can work with their brokers through training and education to understand how you package up a better application to get a better turnaround time for your customer.
I think broker groups are more empowered now to have better conversations with the lenders and to sit down and understand why they are getting slower turnaround times in comparison to other lenders on the panel; and to say they feel there’s improvements that can be made. So lenders can go away and work on that directly with broker groups.
Our reports have been fantastic at providing more visibility so customers can get better service overall.
MPA: How can open banking (the Consumer Data Right) help with turnaround times in the future, and how is NextGen.Net planning for this opportunity?
MP: It’s probably going to be one of the biggest changes for some time, so that’s why we went out and acquired Frollo, because Frollo is the first fintech to be ACCC accredited to be consuming data through open banking. That’s a massive pipeline of shared information.
For us at the moment, it’s been positioned around liabilities and expense verifi cation. That really enables a completely diff erent type of conversation; it’s not around the information gathering and documents, it’s around consent to access the information so it creates a far easier process for customers. They’re not having to gather the paperwork, and it’s a better experience and a faster experience for lenders, because the information comes through in a couple of seconds.
It enables brokers to have better conversations with their customers as well, because they can get more educated.Customers will be declaring what their liabilities might be, and then once they have that information through open banking, brokers can sit down and say, this is where the numbers have come in based on the various expense types.
MPA: What further opportunities do you see eventuating from open banking for both brokers and their customers?
MP: I think there’s more empowerment for customers. They’re probably going to have speed of choice as well, so the daunting home loan process may not be what it used to be, and it can actually be around enabling consent.
There’s more empowerment particularly as their lending needs change, and I think the process will become far more digitised than paper based as it has been for so long.
It’s an exciting market. There’s a lot of investment into things like open banking. I think it’ll be transforming that process all the time; things will be coming more customer-orientated and designed around a customer, and the experience will be better for customers.