Digital verification: The future of mortgage broking


The shift towards digital verification is reshaping the mortgage industry, offering brokers a powerful tool to streamline the application process. This technology, emerging as a cornerstone of modern broking, ensures accuracy and security, enhancing the client experience.

As brokers, adopting digital ID verification means staying ahead in a competitive market and providing swift and reliable services that clients expect. It's a clear step towards a more efficient future where technology meets the needs of a dynamic industry. In this blog, we explore how embracing digital verification sets the stage for a more innovative, more connected era in mortgage broking.

Key takeaways

  • Digital ID verification revolutionises mortgage broking by providing faster, more secure services.
  • Digital advancements benefit both borrowers and lenders through convenience and improved risk management.
  • Tools like LoanTrak and IDyou are critical for brokers, enhancing communication and identity verification.
  • PEXA is leading the digital shift in Australian mortgage broking with electronic settlements and transaction tracking.

Challenges of traditional verification methods

The conventional mortgage application process, for all its tried-and-tested methods, has its fair share of challenges. The most evident of these is the time factor. Manually verifying a client's identity, which typically involves a meticulous review of physical documents, is undeniably time-consuming. This not only extends the duration of the mortgage application process but also introduces potential inaccuracies due to human error.

Furthermore, the reliance on physical documents brings another challenge: susceptibility to fraud. Forged documents and misrepresented identities are genuine concerns in face-to-face meetings. Additionally, the recent COVID-19 pandemic underscored another vulnerability of this method. With stringent social distancing measures, in-person interactions became a challenge, leading to application delays and a growing sense of frustration among brokers and potential homebuyers.

Borrowers and brokers have become accustomed to remote sales and “paperless” advice, with most brokers opting for a hybrid model of in-person and remote delivery facilitated by web-conferencing tools, e-signing, remote VOI, and online client portals.

The promise of digital ID verification

To address these challenges, the industry is increasingly turning to digital ID verification. This method, underpinned by advanced technology, offers a streamlined approach to identity verification.

Lenders can now authenticate a borrower's identity remotely, eliminating the need for physical document exchanges or in-person meetings. This shift not only speeds up the verification process but also ensures that mortgage applications progress smoothly, even in challenging circumstances.

However, the advantages of digital ID verification extend beyond mere convenience. The robust security measures inherent in digital methods, combined with state-of-the-art encryption techniques, offer a level of security that traditional methods struggle to match.

The introduction of Best Interests Duty (BID) has increased the time broking teams spend per file by an average of 40% compared to five years ago, with longer lender SLAs and a higher quality of advice, despite remuneration remaining the same.

The pivotal role of technology in modern mortgage lending

As the industry leans into a digital-first approach, it's evident that technology is the driving force behind this transformation. Here are a few key insights into how technology is reshaping the mortgage landscape:

  • Adapting to market dynamics

    Digital-first lenders, equipped with cutting-edge platforms, are uniquely positioned to navigate market fluctuations. These platforms, bolstered by data analytics and AI-driven algorithms, provide lenders with the agility to adapt swiftly to market changes. This responsiveness ensures that they can offer borrowers personalised services tailored to their specific needs, leading to enhanced customer satisfaction.

  • Open banking

    Replacing the age-old paper chase is open banking—a revolutionary concept that's set to redefine mortgage lending. With open banking, lenders can access a borrower's financial data in real time (with their consent). This direct access not only speeds up the application process but also ensures unparalleled data accuracy.

  • A win-win for borrowers and lenders

    In this revamped digital landscape, both borrowers and lenders stand to gain immensely. Borrowers can initiate mortgage applications from the comfort of their homes, enjoy faster approvals, and benefit from a transparent process. Lenders, on the other hand, can optimise their operations, reduce overheads, and make data-driven decisions, ensuring better risk management and product customisation.

Efficient mortgage application technology

Tools and software essential for brokers

The mortgage broking industry, with its intricate processes and need for precision, has always been on the lookout for tools that can simplify and enhance the broker experience. As the industry evolves, especially in the digital age, the reliance on advanced software and tools has become paramount. Two such tools that have emerged as game-changers for brokers are LoanTrak and IDyou, which are integral components of the online lending platform ecosystem.

  • LoanTrak: The ultimate tracking solution

    LoanTrak, as the name suggests, is a comprehensive portal designed with the modern broker in mind. This mobile-friendly platform offers a plethora of features that are essential for brokers in today's fast-paced environment:

    1. Real-time reporting:

      Brokers can track the progress of loan applications across all MSA lenders in real-time, ensuring they're always in the loop.

    2. Communication made easy:

      The portal lets brokers input notes and send messages directly, facilitating seamless communication.

    3. Document management:

      Brokers can easily view and upload essential documents, streamlining the documentation process.

  • IDyou: Revolutionising identity verification

    In an era where identity verification is crucial, IDyou emerges as a beacon for brokers. This mobile app is not just any identity verification tool; it's designed to cater to the unique needs of brokers:

    1. Anywhere, anytime verification:

      Whether you're in the office or on the go, IDyou allows brokers to conduct identity verification seamlessly.

    2. Inbuilt video call functionality:

      Given the current global scenario with COVID-19 restrictions, the app's video call feature supports remote verification, ensuring brokers can continue their operations.

The Importance of "radical transparency"

The term "radical transparency" might sound intense, but its implications for the mortgage process are profound. MSA National, a significant player in the mortgage industry, is championing this concept. Essentially, it's about giving brokers complete access to every customer interaction and every document produced on a file. Such transparency ensures that brokers are not just bystanders but active participants in the mortgage journey.

This approach is not just about openness; it's about efficiency. With tools that promote radical transparency, brokers can have a bird's eye view of the entire process, ensuring they can make informed decisions and provide timely feedback.

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Role of PEXA in shaping the digital future of mortgage broking

PEXA, as Australia's leading online property exchange network, has been pivotal in ushering in this new era of digital transactions. It offers a seamless platform that facilitates the electronic settlement of real estate transactions, thereby reducing the dependency on cumbersome physical paperwork and the traditional manual processes that come with it.

But PEXA's influence extends beyond just electronic settlements. It's a holistic solution that encompasses various facets of the mortgage process. From electronic document signing to real-time tracking of property transactions, PEXA provides brokers and their clients with a streamlined, efficient, and secure experience.

This shift towards digital platforms like PEXA signifies a broader industry trend: a commitment to leveraging technology to enhance user experience, improve efficiency, and ensure security. As the industry continues to evolve in this direction, it's clear that the future of mortgage broking is not only digital but also more efficient and customer-centric.

Wrap up!

Integrating digital ID verification and advanced technologies is not just a trend but a transformative force within the mortgage industry. As we've explored, adopting these innovations is streamlining processes, enhancing security, and providing a level of convenience and efficiency previously unattainable. For brokers, this means an opportunity to deliver exceptional service, adapt to market changes rapidly, and engage with clients through a transparent and customer-focused approach.

At Brokers Back Office, we embrace this transformation, providing specialised support that empowers brokers through every stage of the loan process. Our commitment to innovation and service excellence ensures that our partners are equipped to thrive in this dynamic digital era, delivering convenience and confidence to their clients. As the industry advances, we're here to ensure a seamless transition into the future of mortgage broking. For more information on how we can assist you, please contact us.