While the Australian federal government’s plans to implement an open banking regime — which will require banks to provide customers and third parties with access to customer data (where permitted) — was met with mixed reactions from the financial services sector, the overwhelming consensus was that open data will pave the way for further innovation in the financial services industry.
Speaking to Mortgage Business, uno Home Loans founder and CEO Vincent Turner said that the new regime will provide borrowers with more power.
According to Mr Turner, once an interoperable and secure framework for open data sharing is established in Australia, customers will be able to consolidate their bank accounts, credit files and other information such as property valuations to get a near accurate indication of the lenders that are likely to approve a home loan, the amount they are likely approve and other loan terms.
“I think customers will start to expect to pull out their phones on the bus on their way to work and find a better mortgage than they have today. That’s the level of effort required to interact with the first half of the mortgage process,” the uno CEO told Mortgage Business.
Acknowledging that it will take time for such a capability to become standard, Mr Turner suggested that home loan customers will come to expect this level of control and transparency.
The growing popularity of on-demand services such as Uber and the increasing sense of immediacy among consumers is an indication of this, the CEO added.
“We had a customer that came to us who had already gone well down the path [of applying for a mortgage] with an online bank, but then that bank told them they’re going to need to go to Australia Post to do this piece of the puzzle and they decided they could not be bothered,” the uno CEO said.
“They woke up on Saturday morning, they uploaded everything [to uno] that they gave to the other bank, and said: ‘Do you have a bank who won’t require me to go to AusPost?’ We said: ‘Absolutely, we’ve got three’.
“I don’t think anyone’s really set out to empower and engage that [breed of customer] before.”
With the increase in voice-based AI helping borrowers with financial decisions and monitoring, Mr Turner said he believes that technology will continue to play an important role in eliminating information asymmetry and empowering consumers.
“There were the days where real estate agents had listings and you had to go to the real estate agent because they knew what properties were for sale. You couldn’t really work that out for yourself. There was that information asymmetry… and there are customers who believe they’re being short-changed because they can’t see all the [home loan] options for themselves, even though they want advice and someone else to do all the work.”
The CEO concluded: “This is the breed of customer that says ‘uno feels better to me because I can jump in and see everything’.”