Australian mortgage brokers embracing Open Banking as superior alternative to screen scraping

NextGen, Australia’s leading mortgage technology provider, has reported a significant shift in the mortgage broking sector, with Open Banking rapidly becoming the tool of choice over traditional screen scraping methods. This transition is particularly notable given the potential legislative changes following the Australian Government’s review of screen scraping practices in August 2023.

The Shift in Broker Preferences

In just twelve months since NextGen’s Open Banking solution was launched, mortgage brokers with access via their aggregator CRM have significantly shifted their preferences away from screen scraping. “When Open Banking was first introduced, it was seen as a secondary option. For many brokers, it’s become the primary tool, used in 80 to 100 percent of loan applications,” said Tony Carn, Chief Customer Officer at NextGen.

“Open Banking has moved to the forefront. Now, it’s not just an alternative; it’s the mainstay in the brokers’ process. This increase in Open Banking isn’t just about a change in usage; it’s about access and adoption rates that speak volumes.

“The last six months alone have painted an impressive picture,” Carn continued. “We’ve seen the number of brokers with access to NextGen’s Open Banking triple. With our latest software release, we’re reaching over 30 percent of brokers nationwide. It’s not just a spike; it’s a sustained climb that’s reshaping our industry.”

“Post-Commonwealth Bank’s adoption of Open Banking in ApplyOnline®, we’ve seen a domino effect. More aggregator groups are lining up, eager to emulate the leaders in the space with activation within their CRMs, and a growing number of first and second-tier lenders are now keen to activate Open Banking in ApplyOnline. This isn’t just momentum; it’s an acceleration, a drive for innovation that’s becoming a hallmark of modern lending,” added Mr Carn.

Drivers of Change

Several key factors are propelling this adoption:

• Enhanced Security: In the wake of data breaches, Open Banking’s government-regulated and controlled processes provide a more secure alternative. The Consumer Data Right (CDR) includes strict privacy safeguards, offering consumers transparency and control through features like the ‘Consent Dashboard.’
• Lender Initiatives: Lenders are responding to security concerns by implementing stricter controls, which naturally limit the practical use of screen scraping.
• Broker Advocacy: Mortgage brokers are crucial in building consumer trust and helping clients understand the benefits of Open Banking and the CDR framework.
• Technological Maturity: NextGen’s commitment to product enhancement, shaped by broker feedback, has led to significant advances in their Open Banking technology, making it a cornerstone of businesses.
• Data Accuracy and Trust: Open Banking ensures real-time transaction data, bolstering client engagement and confidence through secure and efficient processing.

The Voice of Experience

Mary Khatchadourian from Vault Finance said: “NextGen’s Open Banking has been integral to our business, and its speed and accuracy provide clear advantages. It eliminates back-and-forth with assessors over missing information, streamlining our process considerably. Now, it’s probably the most essential tool we use.”

“We won’t apply and get an email from the assessor saying, ‘They missed a personal loan repayment, or there are private school fees.’ We see it all before it even gets to application, making our lives much easier and the process much faster.”