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Property data and services provider CoreLogic has revealed that Australia’s valuation and mortgage industry has undergone a digital transformation in the last four years, as more users turn to digital valuations to enhance speed, efficiency, and customer experience in the mortgage process.
According to CoreLogic, the volume of digital valuation orders has increased by more than a third since 2019, with almost half of all valuations processed through the data and analytics company are now digital.
Desktop valuations have reportedly doubled from 12 per cent to 21 per cent and automated valuation model (AVM) usage has risen to more than a quarter (28 per cent) of all valuations – a new record high.
Speaking of the data, CoreLogic’s executive – product, data and analytics Tim Jenner outlined that the widespread shift to digital working during the COVID-19 pandemic had resulted in a series of innovations that have had “a transformational impact on the industry”.
“COVID-19 provided the catalyst for innovative change after in-person activity was greatly reduced at a time when a record number of mortgages required the timely processing of valuations,” he said.
Mr Jenner added that the use of property data, analytical techniques, and digital workflow tools removed several manual steps from the process and allowed lenders and brokers to radically reduce the ‘time to yes’ for their customers.
CoreLogic noted that, for some online lenders, digital valuations represented 80 per cent of their valuation activity.
The CoreLogic data also revealed that refinance loans were the leading reason for valuation requests, representing 76 per cent of all valuations.
Mr Jenner commented that digital valuations were helping accelerate the mortgage origination and settlement process.
He explained: “Beyond serviceability, there are two critical enablers in the mortgage origination process; one is an accurate valuation of a property and the second is time.
“Fast, accurate, digital solutions that significantly reduce bottlenecks while ensuring the property is suitable for the borrower and provide an acceptable level of security for the lender has been a game changer for the industry.”
CoreLogic’s executive – product, data and analytics flagged that the speed in which digital valuations could be undertaken had also accelerated, with Mr Jenner citing its recent partnership with valuation firm Opteon for its digital valuations solution SMARTval as having further improved the data and processing speed.
National Australia Bank (NAB) has been making the move to digital valuation solutions in partnership with CoreLogic, with NAB’s executive, home ownership Andy Kerr stating that the bank had achieved “faster turnaround times and simpler home loan approval processes”, alongside “positive outcomes” for customers since becoming the first major lender to leverage SMARTval.
Mr Kerr said the move had “helped slash timelines for valuations while meeting all the stringent conditions required to achieve settlement.
“Innovation like this is key to continually improving and simplifying our product offering, our approval times for customers and our experience for brokers and our colleagues,” he said.
Similarly, AMP Bank has been working to digitise the mortgage origination experience, with AMP Bank’s head of lending operations & client assist Melissa Christy revealing the bank had reduced its average turnaround time across all valuation types by around 40 per cent over the last three years by optimising its digital valuation mix.
She said the new types of digital valuations were “helping to enhance the process and improve the experience for brokers and customers”, revealing that over 60 per cent of AMP Bank’s valuations this year were completed via AVM or desktop.
“As a result, we’re seeing some customers receive a response on their valuation almost instantly with AVM, and it’s becoming increasingly common for desktops to be turned around within an hour,” Ms Christy said.
“‘Time to yes’ is a measure brokers and customers count on, and one we’re committed to making as quick as possible.”