Rolling with the tech snowball
Just when tech advances in mortgage and finance seemed to be reaching a limit, along came the 800-pound gorilla of AI
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TECHNOLOGY is now ubiquitous in the financial system and lending economy, increasing speed, impacting security and empowering both brokers and clients to do more.
Lenders seem to introduce new fintech tools almost every other week, and the backend at most financial institutions is currently a hive of activity due to a wave of AI tech integrations and upgrades.
Even the experts are shocked at the degree of transformation taking place.
“I’m 30 years in [the business], and I don’t think I’ve ever seen a technology have such an impact on every industry – it’s fascinating to see how widespread something like ChatGPT has become over the last year. I don’t think you’ll find many professionals that aren’t using a tool like that now,” says Travis Tyler, chief product officer at Lendi Group.
He uses NAB’s Simple Home Loans digital initiative as one recent example of how tech allows brokers and bankers to spend more time with customers, providing more insights and quicker responses.
“Upwards of 25% of broker-originated loan applications are coming through Simple Home Loans now, and most of those applications achieve time-to-unconditional in less than a day,” he says.
Another example of how technology makes life easier is NAB’s Instant Pricing Tool, which streamlines the process for brokers repricing existing NAB home loans.
“By prefilling existing customer and account information on pricing submissions, the Instant Pricing Tool is more accurate and quicker to complete.”
“One downside to improving technology is that criminals are becoming more sophisticated in the ways they manipulate victims when and where they least suspect it. Advances in AI, for example, are allowing criminals to create more convincing scams,” says Brown.
“We’ve seen a significant increase in scams in recent years, and as part of NAB’s bank-wide strategy to reduce the impact of scams and fraud, we have prevented or recovered more than $200 million in scam losses for our customers, in part through using technology.”
According to the latest Australian Signals Directorate Cyber Threat Report, there was a cybercrime once every six minutes last year. By sector, finance and insurance firms account for only 4.7% of all reported incidents, but the second most common type of cybercrime against individuals is online banking fraud.
“The ‘scamscape’ is constantly changing, and every Australian needs to learn to recognise the red flags and protect themselves against scams and cybercrime,” says Brown.
Approval times at banks and non-banks alike have accelerated over the last few years, some of this due to brokers being able to use technology more effectively.
“We have new industry brokers reaching competency significantly quicker than in the past. On average, they are doing eight deals in the first eight weeks. On the old system it was more like one or two deals in the first eight weeks.”
This kind of pace used to be something you might expect only from brokers at the top of the industry, so for novices to be able to hit the ground running at that level in a lacklustre lending market is remarkable.
NAB is also ramping up its education efforts for brokers, with similar results in getting brokers out of the gate faster.
“We recently launched an online learning and business knowledge platform to streamline broker education,” says Brown. “The online accreditation and training platform, which was developed in collaboration with Alffie, a Melbourne-based supplier of digital training and a registered training organisation, cuts the time it takes for mortgage brokers to become accredited to write NAB lending products by up to two weeks.
“[This] allows brokers to work faster and deliver greater value to customers.”
The advances have been so fast that governments and regulatory regimes have been left flat-footed. But that may change in 2024.
NAB Broker Distribution is dedicated to helping brokers deliver the best customer outcomes, supported by a national network of experienced BDMs and dedicated support through every stage of a customer’s home lending experience. As the Bank behind Brokers, we will continue to invest in the broker channel to provide brokers the tools and support they need to help their customers, empowering them to build success on their own terms.
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Both customers and brokers are seeing some of the biggest benefits of the new technology.
Tyler has been a key player in helping move all Lendi brokers and retail stores onto a single platform over the last 18 months.
“We’re through most of that now and really starting to accelerate our product development with a focus on how we deliver a great experience. We’ve got a platform that allows us to deliver change to 1300 brokers at once and focus on problems at scale, but also connect them to the broader ecosystem,” he says.
The result is a more seamless interaction between broker and customer, improving not only productivity around completing applications but also accuracy in understanding a customer’s financial position.
For example, during a loan application, customers may forget a credit card they have because they don’t use it. However, as this information is already in the ecosystem, it can be included in the application, resulting in faster, better and more accurate service with fewer false starts for customers.
“Compliance is effectively embedded in the platform,” says Tyler.
Banks are also ramping up their tech investment, with some even becoming fully digital. A recent report commissioned by the Australian Banking Association showed that IT expenditure at three of the four major banks increased eightfold from $3.5 billion in 2005 to $28.5 billion by 2022 as the banks strived to meet the demand for digital interactions across the financial spectrum.
“NAB has been investing in simplifying, automating and digitising right across the bank. We’re also increasing our use of data and automation. Technology allows us to remove manual processes, reduce turnaround times and make life easier for customers, brokers and colleagues,” says Adam Brown, executive for broker distribution at NAB.
Travis Tyler
Lendi Group
Industry experts
As Lendi Group’s chief product officer, Travis Tyler leads the lender’s ‘Experience’ organisation, which oversees its technology, growth and engineering teams as well as the ongoing maintenance, optimisation and enhancement of its proprietary platform. He brings a wealth of experience from his previous roles as chief product officer at Zip Co. and chief product and marketing officer at neobank 86 400, where he was part of the founding team and instrumental in scaling the company’s business before its purchase by NAB. He also brings over 20 years of banking experience from Westpac and St. George Bank, much of which was in mortgage lending.
Lendi Group
Travis Tyler
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Travis Tyler
Lendi Group
Industry experts
As Lendi Group’s chief product officer, Travis Tyler leads the lender’s ‘Experience’ organisation, which oversees its technology, growth and engineering teams as well as the ongoing maintenance, optimisation and enhancement of its proprietary platform. He brings a wealth of experience from his previous roles as chief product officer at Zip Co. and chief product and marketing officer at neobank 86 400, where he was part of the founding team and instrumental in scaling the company’s business before its purchase by NAB. He also brings over 20 years of banking experience from Westpac and St. George Bank, much of which was in mortgage lending.
Lendi Group
Travis Tyler
Adam Brown is the executive for broker distribution at NAB, with responsibility for national leadership of the NAB and Advantedge third-party businesses. He has been at NAB for over 15 years, with more than 10 of those working in and across the broker industry. His experience in financial services spans operations, risk, technology and sales/distribution, including in several senior roles leading teams across these disciplines. Having led the national Advantedge business from 2019, he moved into an expanded role to lead the combined NAB and white label business in 2023.
NAB
Adam Brown
With around 99% of all bank transactions now handled either online or through apps, and customers consistently rating these methods higher than ATM, face-to-face or phone-based interactions in terms of satisfaction, there is no turning back the clock for tech in finance.
Even AI isn’t considered that new in some areas. NAB has been using AI in a variety of ways for some time, particularly across cybersecurity, fraud and financial crime, to help protect customers and brokers as well as the bank.
Travis Tyler
La Trobe Financial
Industry experts
“I’m 30 years in [the business], and I don’t think I’ve ever seen a technology [such as ChatGPT] have such an impact on every industry”
Travis Tyler, Lendi Group
There is a degree of self-perpetuation in the accelerating use of digital tools. As platforms become more widespread and responsive, it’s easier to lift their performance as the amount of data snowballs. Some of this is helped by AI-optimised systems, but much of it is still based on good old-fashioned user feedback.
“Last quarter, we received 300 pieces of individual feedback [from our platform users], which goes directly to our product teams and helps prioritise their backlog. Additionally, we have a design team that conducts field research each quarter to address specific problems, informing our roadmap and experiences,” says Tyler.
Combining AI with regular feedback supercharges the optimisation process.
“With some of the new technologies and how they use AI, it can take a different approach and be far more accurate,” he says.
Even so, making sure humans remain central to the process is a common theme across tech deployments in finance.
“NAB wants to be at the forefront of AI, but only with the right guardrails in place. The key to that is combining AI with human intelligence,” says Brown.
As many have observed when tinkering with AI, it can sometimes seem to have an almost innate need to please its taskmaster with a convincing and useful response – even if the details it bases its response on are shaky. “Large language models [LLMs] today can have hallucinations – they need to be human-assisted,” says Tyler.
Tyler agrees that investing in privacy security is crucial for financial institutions and goes hand in hand with having an overall system that is up to scratch. It’s an area in which compliance costs are also rising fast – a recent financial crime compliance report shows the total cost for Australia amounted to $5.37 billion, with 98% of financial institutions seeing an increase over the last 12 months and nearly 40% of that cost attributed to labour.
“[For privacy] you need the capability. It’s not something you can outsource to someone else. It needs to be embedded, technically, people-wise, process-wise and culturally,” says Tyler.
As Lendi Group’s chief product officer, Travis Tyler leads the lender’s ‘Experience’ organisation, which oversees its technology, growth and engineering teams as well as the ongoing maintenance, optimisation and enhancement of its proprietary platform. He brings a wealth of experience from his previous roles as chief product officer at Zip Co. and chief product and marketing officer at neobank 86 400, where he was part of the founding team and instrumental in scaling the company’s business before its purchase by NAB. He also brings over 20 years of banking experience from Westpac and St. George Bank, much of which was in mortgage lending.
Lendi Group
Travis Tyler
Adam Brown
NAB
Adam Brown is the executive for broker distribution at NAB, with responsibility for national leadership of the NAB and Advantedge third-party businesses. He has been at NAB for over 15 years, with more than 10 of those working in and across the broker industry. His experience in financial services spans operations, risk, technology and sales/distribution, including in several senior roles leading teams across these disciplines. Having led the national Advantedge business from 2019, he moved into an expanded role to lead the combined NAB and white label business in 2023.
NAB
Adam Brown
Adam Brown
NAB
Adam Brown is the executive for broker distribution at NAB, with responsibility for national leadership of the NAB and Advantedge third-party businesses. He has been at NAB for over 15 years, with more than 10 of those working in and across the broker industry. His experience in financial services spans operations, risk, technology and sales/distribution, including in several senior roles leading teams across these disciplines. Having led the national Advantedge business from 2019, he moved into an expanded role to lead the combined NAB and white label business in 2023.
NAB
Adam Brown
“One downside to improving technology is that criminals are becoming more sophisticated in the ways they manipulate victims when and where they least suspect it”
Adam Brown, NAB
Less error, more speed in lending systems
A snowball effect for tech
Less error, more speed in lending systems
A snowball effect for tech
Published 02 Apr 2024
Adam Brown
NAB
Source: Moody’s Analytics Navigating the AI Landscape report 2023
AI expected to transform banking
24%
Lendi Group was created in 2021 though the merger of Aussie Home Loans and Lendi to form Australia’s largest retail mortgage broker. Both were founded as market disruptors to help Australians get better deals, better rates and better information on home loans. Lendi Group’s platform allows customers to compare, apply and settle loans online while being supported by a team of experts and brokers who power its brands, products, services and relationships. With a shared history of challenging the status quo, the two brands provide different customer experiences with the same goal of helping more Australians achieve homeownership.
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Tech a double-edged sword in security matters
Keeping people up to speed
Scale of impact AI is expected to have on risk and compliance in banking
Transformative
53%
Major
21%
Moderate
2%
Minimal
0%
None
46%
Financial crime involving digital payments
Source: LexisNexis Risk Solutions True Cost of Financial Crime Compliance Study, Asia Pacific, 2024
What types of financial crime are on the rise in Asia-Pacific?
19%
Increased by
11–20% in last year
Increased by over 20% in last year
23%
38%
Financial crime involving the use of AI
21%
38%
Corruption and bribery within the supply chain
18%
40%
Criminal use of technologies/methodologies
23%
35%
Financial crime involving cryptocurrencies
23%
35%
Trade-based money laundering schemes
23%
35%
Use of money mule accounts to launder crime proceeds
23%
34%
Supply chain disruptions
In January, the government published its response to public submissions to a discussion paper on ‘Supporting Responsible AI’, which examined the need for a combination of general regulations, sector-specific regulations and self-regulation initiatives to support safe AI practices. One possible outcome is the implementation of mandatory guardrails for using AI in high-risk settings, either by amending current laws or creating new laws specific to AI.
Such new rules could affect the use of AI in the finance industry and will be a factor that backend teams will need to consider.
The sudden AI-driven lurch forward comes at an opportune time for Australia as the open banking regime starts to deliver huge amounts of valuable data to systems that can now digest it and offer more meaningful choices to consumers.
“Where we’ve got to now, [open banking] has broader coverage, service quality, and is much better in terms of what information the banks are providing – it’s more standardised, more reliable,” says Tyler.
He sees a major opportunity for bringing richer data into financial ecosystems, which will give consumers the ability to make financial decisions tailored to their unique circumstances.
“Having this kind of data in real time getting into the hands of customers and the broker means that they’re more informed and can regularly make better decisions around how they create wealth for their family and their future.”
0%
None
2%
Minimal
21%
Moderate
53%
Major
24%
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TV
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Independent Feature
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Exclusive Leader Profile
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Big Deal
Premium Content
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Reverse Mortgages
Investment Loans
Specialist Lending
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