The ship is sailing on this revolution and those not on it are going to find the future tough going. Those who do not invest time and money in automat- ing and accessing the Open Banking revolution, are going to run the risk of becoming irrelevant as the world moves on without them. There are lenders moving in the right direction, and I am pleased to say that LendingMetrics has helped many make the transition. But there need to be more, far more. What should be obvious is that not only are consumers wanting an easier app process, but also demand is now coming from brokers fed-up with the cumbersome decision-in-principal regime. They can see - if some lenders can’t - that automation will lead to more con- sistent decisions (not dependent on the variables that come with manual underwriting) and a relatively rapid ‘yes/ no’ that cuts the need for shopping around and ultimately leads to a greater conversion rate. They can see the effi - ciency savings it will bring to their own business. They can also appreciate that it means a new era of consistency for
lender decision making and much less uncertainty on their part when present- ing applications. Knocked sideways by the no win/no fee ‘mis-selling’ bandwagon, they can also see the regulatory gain of having a digital system in place where every single automatic decision is support- ed by a comprehensive audit output, where every bit of data on which a deci- sion is based is recorded, and where every calculation made against that data is logged. For example, an income calculation is made at a precisely logged moment in time and comes with a never-before-possible level of granu- larity thanks to Open Banking. At last, a solution to the tidal wave of spurious mis-selling cases that they have had to deal with and a robust electronic audit trail that will stand up to the scrutiny of any regulator. For the lender, the upsides are unde- niable. Certainly an ability to increase the scale of lending, where the under- writing has been automated and manual involvement limited to getting a minority of cases over the line. Instead of the labour and time-inten- sive decision-in-principal process with
information and proofs collated man- ually, there is a consistent automated result in minutes based on real-time data backed up by credit referencing. A much easier to obtain decision with less, if any, paper, and more electronic execution. I admit, it will not be an overnight silver bullet. Initially, there will still be a fair degree of paper in their processes. But it is a long overdue journey that they will have embarked upon that will benefit them and their brokers massively in the immediate as well as the longer term.
Above: LendingMetrics Managing Director David Wylie
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