54% of financial institutions are looking to initiate instant approvals for loans
More than half of financial firms plan to roll out “instant loan approval” within the next two years, according to a new study.
The findings are in a new report commissioned by digital identity technology provider GBG, which saw research group IDC investigate 1,502 Australian consumers and 300 financial institutions (FIs) and professional service firms as of October 2021.
the Digital Identity Verification: Bridging Usage, Preferences and Trust Gaps in Australia report found that the majority of Australian companies plan to roll out new digital services that would require identity verification as part of the onboarding process over the next two years.
When asked what services they plan to roll out over the next two years, more than half noted ‘instant loan approval’ (53%), while a similar proportion (54%) planned to initiate instant loan applications and approvals.
Other potential services included deposits, payments and crypto transactions (68%), open banking (54%), and facial verification for new or existing customers when onboarding or signing into a service ( 50%).
The researchers also noted that an increasing number of companies are generally looking to provide more digital services to consumers, following an increase in consumer behavior online.
According to the report, two-thirds (67%) of Australians had created up to six new online accounts in the past 12 months, following the pandemic, to continue to access services remotely. In addition, three out of four customers used the web, mobile or apps when integrating with a new service this year.
Michael Araneta, AVP for IDC Financial Insights and Senior Analyst for the survey, noted: âAustralian businesses must be able to support the tremendous growth in customer interactions. This has notably been seen in customer onboarding, where the growth of new customer accounts in digital channels shows no signs of stopping. It is important for companies to ensure that the customer onboarding process is transparent to define the quality of the customer journeys from the start.
The results come as more and more lenders focus on speeding up turnaround times and, in some cases, offering âinstantâ approvals on home loans.
This week, the National Australia Bank (NAB) said it was continuing to roll out the Symple Home Loans system, which now handles around 80% of its proprietary apps.
The platform reportedly returned loan approvals within an hour for 30% of requests, or within one day for 60%. About 80 percent of them would see a result within five days.
The bank reported that the platform will be rolled out to brokers in fiscal 2022, alongside a new credit decision engine for the chain.
In the same way, Australian Mortgage (now owned by Volt Bank) uses an “instant credit decision”, achieving “fully verified approvals” in less than 15 minutes.
Its digital mortgage solution will soon be distributed by the Australian Finance Group (AFG), as part of Volt’s new alliance with the group, with AFG brokers piloting the product “in the last quarter of 2021”, before being put available to all AFG brokers. early 2022.
Volt Bank has previously said that Australian Mortgage’s smart lending solution will be a key part of Volt’s Banking as a Service (BaaS) offering and help accelerate turnaround times for brokers, who are currently experiencing long delays with traditional lenders.
[Related:Â CBAâs new digital mortgage to be offered direct]
Annie Kane is the managing editor of The Adviser and Mortgage Business.
In addition to writing about the Australian brokerage industry, mortgage market, financial regulation, fintechs and the broader lending landscape – Annie is also the host of Elite Broker and In Focus podcasts and The Adviser Live webcasts. .