Banks with operations in the brokered mortgage, secured lending and debt management markets are being urged to adopt a universal format for sharing and accepting customer data.
Senior industry figures acknowledge that banks have become better at sharing affordability data, but are frustrated that banks’ broker systems will not accept underwriting data in formats generated by other parts of the same bank.
It means that when a broker conducts an affordability assessment with a bank, they are able to obtain the information quickly. But when they attempt to pass this information to a different division of the same bank, the banks request the original bank statements. This is adding significant time to new lending and debt management applications, according to industry experts.
In an interview with Open Banking Expo, Susan Rann, chief executive officer of Paylink Solutions, said that banks should be applauded for their Open Banking efforts this far, but suggested it is now time for lenders to ensure their processes and practices are common throughout their organisations.
“In terms of the banks being open to the integration of open banking, we have seen good uptake on that. Where we are having some difficulty is we are talking to brokers to package cases. They will use an affordability tool with a consumer and send that information back to lender.
“What we are finding is, when we send this stuff to the lender, because it is not in the format of a traditional bank statement, they won’t accept it as part of their underwriting criteria.”
Rann said she is currently working with a large UK brokerage and other industry stakeholders to consider how best banks could resolve the issue.
Market analysts are the big four consultancy firms continue to review the future of the intermediated lending markets, and recognise the issues highlighted by Rann.
At the start of the summer, KPMG published a report on the future of mortgages. Speaking to Open Banking Expo, Chris Monaghan, a partner in the company’s Financial Services Advisory practice, said that banks will have to make notable improvements to their intermediated systems.
“The connectivity of brokers into underwriting facilities will have to be improved. If you are a broker, you have to fill in multiple banks’ systems. It will consolidate with some sort of front end and multiple providers at some point, with aggregation of lending opportunities following.”