What is stopping lenders from overhauling loan application processes?

by Ksenia Stepanova19 Nov 2020

Speed, online application platforms and turnaround times have been earmarked as areas where lenders need to do some real work – and, according to one expert, banks face a raft of challenges when it comes to overhauling the way they handle applications.

Signavio country manager for Australia and New Zealand Andrew White says that for banks, home loans are usually one of their chunkiest areas of business, so it makes sense for them to streamline that process as much as possible. However, he says they also need to consider a range of regulatory issues when moving to any new way of working – something which could slow the transformation process down considerably.

“Retail banking is bread and butter in both Australia and New Zealand, so naturally banks are looking at how they’re managing their home loans,” White said.

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“It’s all about the customer experience, and how they can shorten that cycle. If someone wants to go through the process of getting a mortgage, the faster you can turn that around, the higher propensity you’ll have for that prospect to engage with you. But the more you take them back, the more they’ll shop around – that’s the 101 of customer engagement.”

“Everyone is also trying to speed up the process of customer onboarding, and they’re trying to do that in a compliant way,” he continued.

“You can’t just say ‘yes, you’ve applied – we’ll give you a home loan.’ You have to do your due diligence, and luckily there is process around those things in Australia and New Zealand. But the biggest challenge the lenders face is how they can upscale that process and speed it up, but do it while complying with the necessary regulations.”

White says that any overhaul in process also benefits the lender’s internal staff, and that efficiency  gets passed on to any clients or advisers that the lender deals with.

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“From our perspective, digitisation and transformation gives you a whole different way of working,” White said.

“That’s something that has always been hard for the banks to maintain in a cost-effective way, but when you come out with a new product, it shouldn’t take several months for everyone behind the scenes to support that.

“They should be able to understand what’s happening straight away, and be able to pass that on to the advisers and customers.”

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