How NAB shifted on data with responsible lending

  • By Christine St Anne

The National Australia Bank’s decision to invest in data over the last few years is paying off for the business and key in meeting its obligations around responsible lending.

It was an assessment made by the bank’s executive general manager, broker partnerships Anthony Waldron and general manager of home lending Paul Riley as ASIC kicked off round two of its hearings into responsible lending in Melbourne.  

“Using data services has been really important. Not just in meeting our obligations [around responsible lending] but in making the customer experience simpler and easier as well,” Riley said.

“We have made a number of investments over the last few years [around the use of data],” Riley added saying the strategy was important in understanding the customer better which ultimately results in a better loan application experience. 

“It addresses pain points for both the customer and the banker. We also wanted to make it simpler and faster for our customers.” 

Both Riley and Waldron were responding to ASIC deputy chair Karen Chester’s questioning around the use of technology and innovation. 

Chester noted that a number of smaller providers including businesses like Tic:Toc seem to be leading on technology and data usage.

Riley acknowledged that NAB was the first bank’s “to really embrace comprehensive credit reporting”. 

“We actively use [CCR] in both our lending as well as on our consumer finance part of the business. 

“We also continue to look at different services and different providers that help us both capture more information but also to better categorise this information for both our bankers and customers.” 

Waldron said it’s an area that the bank continues to explore further and added that while “data improves the conversation it does not replace the conversation”. 

Here he said the bank continues to have conversations with its customers to understand their expenses better.

He added that the bank also needs to remain “mindful about finding the right balance between the convenience of the services offered to customers but also the privacy considerations". 

“We always want our customers to remain in control of their data,” he said

However, while decisions given to the customer have been made faster, the net processing time for online applications have remained the same.

The bankers were also grilled on their use of HEM particularly as the bank uses six additional categories in addition to the HEM, yet 66 per cent of its applicants fall below the HEM.  

ASIC Commissioner Sean Hughes said the regulator was just trying to “understand what was missing in action”.

For the bankers, it is about asking the right questions and keeping a focus on capturing the right types of information.