Sean Simmons, Co-founder and Head of ZipID, uncovers a digital solution that allows the mortgage sector to overcome compliance issues in customer identification.
Digitisation across the financial services industry is becoming increasingly important, not only for consumers who are searching for the best possible user experience, but also for financial institutions who want to reduce errors and increase efficiency.
But despite the impressive headway made in the industry, the mortgage sector is lagging behind, particularly in the process of verifying a customer’s identity.
While momentum is growing amongst mortgage brokers, aggregators and lenders for a streamlined industry standard to verify the identity of home loan customers, the current reality is plagued with inconsistency and frequent errors, with many lenders sharing that broker ID capture is one of the top three causes of rework.
The process doesn’t have to remain this way. Equifax (formerly known as Veda) is leading the way for the mortgage industry to transition to a standardised and digitised process through its ZipID broker solution.
Modernising an outdated process
The current ID process when applying for a home loan is outdated. While face-to-face identity verification is vital in reducing fraud, and is a regulatory requirement for property related transactions, the process lacks consistency, is paper heavy and is not broker friendly. This causes delays for brokers and customers and adds manual processing and rework costs to lenders.
According to the Mortgage and Finance Association of Australia (MFAA), more than half of new residential home loans were originated by mortgage brokers in the September quarter 2016.
This makes it more important than ever to address the challenge of bringing the process into the twenty first century, whilst ensuring protection against fraud and compliance with regulation.
Brokers often bear the brunt of compliance challenges, as they strive to navigate policy variations across lenders and the delay caused by rework which frequently arises in the ID verification process. This in turn has a significant impact on lenders’ mortgage origination costs, both in terms of money and time.
In fact, customer surveys from Equifax have shown that, typically, 40 to 60 per cent of loan applications through the broker channel are affected by ID-related rework.
Given these issues, it’s hardly surprising that industry leaders have been quick to back the ZipID solution.
One of the cornerstones of the ZipID service is the mobile App (www.zipidbroker.com.au), which removes the risk of rework caused by incomplete or poor quality ID capture.
The ZipID App contains a prompted workflow that guides brokers through a structured ID process, capturing true copies of their client’s ID documents, as well as their signature and photo. The data is geolocated and time stamped. The ZipID App then securely returns a single PDF to the broker, containing all of the ID information required for sending to the chosen lender.
Already, the ZipID solution has achieved the support of 16 lenders including NAB, Macquarie and ING DIRECT, who are running trials or in rollout, and aggregators including AFG, Connective, Vow Financial, eChoice and Loan Market.
Prominent mortgage broking group, AFG, has thrown its support behind the idea of a standardised solution, encouraging its panel funders and industry bodies to continue the momentum already achieved by ZipID to achieve a more customer- and broker-friendly process.
Leading mortgage aggregator, Connective, is also vocal in its support of ZipID, pushing for the rollout of a consistent and compliant service that will deliver a positive impact across the board.
A solution for all scenarios
For the mortgage industry to effectively transition to more standardised and digitised processes, the tools available will need to work for all parties, across all situations.
To this end, ZipID has innovated to ensure the ZipID Report satisfies the VOI safe harbour standard and AML/KYC requirements. Incorporating feedback from brokers, ZipID’s solutions respond to the key problems posed by existing ID methods to help make the process faster and easier.
The ZipID App gives brokers, mobile lenders and branch staff the power to securely capture their client’s ID information using any smart phone or tablet in one fully compliant PDF report, wherever they are.
ZipID also offers an Agency solution for brokers who cannot meet with their customers in person. They can arrange for ZipID’s trained and police background checked representative to complete the ID process at the customer’s home or work at a time convenient for them – a great solution for phone and online based brokers or brokers with interstate customers.
Staying on the front foot
The role of digital solutions is constantly shifting and changing. In order to provide the best possible customer and broker experience, ensure compliance standards are being met, and to create a workflow that is consistent and cost effective, mortgage professionals need to embrace value adding digital solutions – or risk being left behind.
To find our more visit www.zipidbroker.com.au