ID verification company ZipID (acquired by Veda in 2015) believes a standardised approach to verifying the identity of borrowers will allow all lenders to improve their experience for brokers.
ZipID has been working with a handful of aggregators including AFG, Connective and Vow Financial to help streamline what ZipID co-founder Sean Simmons calls a ‘thorny issue’ for brokers – ID checks.
Sixteen lenders are now trialing brokers' use of the ZipID mobile app, which guides consistent face-to-face ID checks, removing the need for current paper work and filling out lender's ID forms.
“One of the phrases we use is 'ID done once. Done right.' It’s a lender agnostic solution. As a broker undertakes their assessment and their fact-find with their client, they don't want a specific ID or solution for Bank A, they want a simple, one-size-fits-all solution,” he explained.
In a highly competitive market like home loans, ZipID has identified that aside from product and rate, service levels – or ‘the broker experience’ – is one of the most hotly contested areas in third-party distribution.
“One of the features of that competition is how funders are competing for referrals from brokers for deals and there are only so many things that they can compete on. And what we have learned is that ease and broker experience and delivering fast approvals and fast results for brokers is probably the number one thing that funders can compete on. More so than rate. More so than product. The broker experience and its ease and speed and consistency is what's winning in the market,” Mr Simmons said.
“So what is being constantly played back to us is that having 20 different ID policies and AML forms for 20 different funders is adding no value. It's differentiation where it shouldn't be.
“What funders are recognising is that if identifying clients can be made easier and more efficient as a standard, they can reduce rework errors and compete on other things rather than on clunky, fragmented processes.
“We think that every layer of the value chain recognises that some greater standardisation is in everyone's interests.”
According to Mr Simmons, feedback from brokers already using the ZipID app has been strong, citing that it's simple and easy to use at client meetings.
In response to broker interest, the company ran a series of webinars for more than 500 AFG brokers in mid-December. A surge in demand forced the group to put on additional webinars, where according to Mr Simmons, feedback from brokers further validated that ID checks were still a sore point for many.
The group recently launched a pilot rollout with 16 lenders through AFG. Similar rollouts are underway with Connective and Vow Financial. Mr Simmons said that so far, the feedback has been encouraging.
“Many lenders are now seeing that they can encourage their brokers to have this conversation. Their BDMs are starting to say to brokers: ‘Hey, we've got something extra for you’ and presenting them with ZipID – a new, streamlined way of doing ID checks for successful loan applications'.”
The ZipID service works on a ‘lender pays’ model and is free for all mortgage brokers.
It also provides a ‘come to you’ agency service to support brokers who cannot meet their clients face to face. Mr Simmons explained that this model has been popular with phone based / online brokers such as Australian Credit & Finance and iSelect.