LIXI CEO Shane Rigby is trying to make broking’s countless software platforms work together
If you were asked to build an awesome paper aeroplane, would you start with a list of requirements, engage engineers to write design documents, seek budget approval, and tender for a manufacturer to build a plane to those specifications? Or would you just start folding, testing, and improving the next version based on the test results?
At LIXI we are working with our members (including lenders, aggregators and service providers) to improve their customers’ experience by adapting change processes to be more like making paper planes and less like building skyscrapers. LIXI does this by developing data messaging standards for the Australian lending industry that promote flexibility, efficiency and scalability. In doing so, LIXI is shattering the perception that standardisation is a barrier to change.
If you’ve enjoyed the richness and simplicity of the user experience of Uber, Spotify or Netflix, you have benefited from agile methodologies applied across an entire business model. Large financial services are often constrained by regulatory oversight and legacy systems, but they are looking to avoid following a similar path towards demise as that faced by the taxi industry due to Uber, the music publishing business due to Spotify, and the DVD rental business due to Netflix.
Business leaders are looking for ways that entire enterprises can quickly experiment with new products and fulfilment processes, and new ways of capturing and analysing data. Building product variations, testing and iterating quickly is the new normal, and fintechs are extremely skilled at this approach. In response, innovation labs have often been established at the edge of an organisation, but most are now looking
for much greater change, undertaking business-wide transformations to embed agile methodologies across the organisation as a whole.
Modern technologies and the new businesses they enable have given rise to a greater number of ‘service providers’, both internal and external, that all play a role in delivering a mortgage to a borrower. The network of business interactions and system interactions is growing ever more complex.
It is critical that all systems involved communicate coherently, capturing all the right data at the outset rather than requiring lots of to-and-fro later on.
This network of systems must be adaptable and have the ability to quickly change between providers, both internal and external. Uber didn’t build a mapping service; it used Google Maps at the outset. It switched from Google Maps to MapBox when the service-to-price ratio was not sufficient – and have since switched back. Uber later invested in mapping, and is rumoured to be internally implementing its own service. This ability to almost seamlessly switch between multiple internal and external providers is a massive commercial advantage and enables decisions to be based on seeking the right solution at the right time with little friction.
The consistent use of standards for communication between technology systems helps process owners remain independent and supports low-friction changes. Replacing a technology system is much easier if communications to and from that system are based on standards. If a service provider, internal or external, builds a complicated non-standard interface rather than using one based on a LIXI2 data standard, it is implementing a barrier to your future ability to adapt and innovate. LIXI2 standards provide greater consistency across a wide range of message types and are better suited to supporting the technology changes that are ongoing than the first generation of standards.
At LIXI we collaboratively define standards for the data transmitted throughout the lending process, which help the data and digital services to seamlessly coordinate the experience for brokers and their customers. This allows systems to evolve more quickly, thereby supporting innovation – particularly when changes need to apply broadly across many interfaces. For example, the changes required by responsible lending for the collection of living expenses have much less impact if they are applied consistently rather than all organisations making the changes independently, in different ways and at different times.
Through collaboration, LIXI standards will stay up to date and relevant. The rapid emergence of new products and new workflows will no doubt continue to impact all the players in our industry. LIXI plays an important role in delivering standards, tools and frameworks that our members need to ensure they are future-proof and remain competitive in this vibrant industry.
Shane Rigby is the CEO of LIXI, a member-based, not-for-profit company that develops data message transactions for the Australian mortgage industry. He is currently collaborating with participants across the industry to help them gain efficiencies through the further adoption of LIXI standards.