The world has changed, and the mortgage market isn’t immune. But what shape will the future take? Tony Carn, chief customer officer at NextGen.Net, talks to MPA about tech advances and finding opportunity in adversity.
MPA: What do you see as the biggest challenges facing brokers at the moment?
Tony Carn: Well, the main challenge is obviously the COVID-19 pandemic. Nobody wants to get infected, and no one’s quite sure what the new normal will be. Work environments have had to be radically overhauled, and a lot of people around the country are working remotely as a result. Face-to-face meetings and getting on the road to meet with clients isn’t really happening either.
There’s a lot of flow-on effect from that, too. Economic growth has slowed – it’s probably going to be negative for Australia this year – and unemployment is high. Longer-term, there’s the risk of recession, and that brings worries about how long it could last. It’s likely to put pressure on the housing market, as well as household income and day-to-day expenditure. Credit policies will probably tighten, too.
Now there’s still opportunity to provide aid as brokers through all of this. It’ll be a challenge, granted, but I think brokers are well positioned and will have an even more important role in helping clients secure loans moving forward. The broker slice of the pie will grow; it’s more of a question as to how big that pie might be.
MPA: How do you think technology has changed the way brokers work? Do you think it’s made it easier to transition during the pandemic?
TC: Look, there’s no question that tech-nology has not only made it easier but in fact has made it possible. Brokers are often working solo anyway, and video conferencing has obviously been a boon for everyone. The current situation has also proved the value of these tech tools, remote working and flex-ible working arrangements. You can improve your productivity, you’ve got reduced travel time, and there’s still accountability around the work being done.
That said, while virtual tools are useful, I don’t think face-to-face is ever going to go away entirely – at least not until virtual honeymoons become the norm!
MPA: What sort of future tech innovations would you want to see in order to make the whole loan process smoother for everyone?
TC: I have a lot of thoughts around what I’d like to see, but I’ll try to keep it outside of the realm of science fiction and within how I think it’s likely to change in the next few years. First of all, giving or sending other people money is already pretty easy at the moment. There are a huge number of tools to carry out transactions like that. But actually receiving that money – or even asking for it – is still a trickier process, particularly when you’re talking about the sorts of sums involved in a mortgage loan.
Part of this is to do with identity verification procedures. Government departments have been more forward in utilising tools like e-signatures or electronic document verification than the banking sector. There are a few reasons for that, but I suspect part of it is that banks are reluctant to be the first. Banks don’t want to invest heavily in a system, then discover it’s woefully outmoded or obsolete within a few years. There’s also a real risk of creating a patchwork of lender processes rather than having something standardised. That’s not optimum from either a lender or consumer perspective, and it can have a real impact on both the image and viability of the business.
Looking ahead, I think lenders are going to need to coordinate at some level and provide a baseline for this kind of thing. Obviously each lender will have its own quirks, but there needs to be a better vision of best practice.
How do you do that? Well, open banking will likely play a big role in it. But even before that becomes mainstream, I think the COVID pandemic will likely cause a lot of lenders and brokers alike to look for better ways – particularly now that we have to, really. I’m a firm believer that you should never waste a crisis; change brings a lot of opportunities and the chance to implement long-term strategic initiatives versus short-term survival tactics.
MPA: How do you think the industry will continue to evolve in the next six to 12 months, particularly in light of the pandemic?
TC: We’ve already seen a shift. If you look at the loans market at the moment, refinance activity is growing. Given the uncertainty around the current situation, people are looking to rearrange their finances and try for more favourable interest rates. Purchasing will probably drop off more too, given the way so many people’s incomes have been affected.
One thing I think brokers need to keep in mind is the importance of managing their clients prudently. There’s only a handful of lenders that empower brokers with the technology to manage their clients throughout the life of the loan, and I think as an industry we need to standardise “We need to have clearly defi ned processes around managing customers through their loan variations” Tony Carn, NextGen.Netthe approach. The way we live and work is changing, and we need to have clearly defined processes around managing customers through their loan variations.
At a wider level, brokers need to be looking closely at their business continuity and disaster recovery plans. The COVID-19 pandemic can serve as a bit of a dress rehearsal for possible future issues – you need to look at where your weak points have been during this period and how you can correct them into the future.
NextGen.Net is Australia’s leading technology provider to the lending industry, which focuses on delivering quality products and services to a range of banks, non-bank lenders and brokers. Its mission is to make lending easy through the delivery of state-of-the-art software solutions, from point-of-sale electronic application lodgement, assessment and processing through to settlement.
NextGen.Net’s objective is to provide smarter solutions for now and what comes next – delivering best-in-class Software as a Service (SaaS) and leading the market in quality management and processing efficiencies.