New NextGen research proves brokers needs haven’t changed, even if the tech has
Artificial intelligence (AI), automation and open banking technologies are reshaping the Australian mortgage industry, but they are no panacea for unpredictable, unreliable and sluggish customer service.
Most customers remain dissatisfied with their digital banking experiences, while broker loyalty continues to be tested by inconsistent and drawn-out SLAs.
These are the findings of new research commissioned by NextGen, which surveyed 132 experts from Australian banks, non-banks and specialist lenders to get their insights into how technology is shaping the lending industry.
The 'Australian Lending Technology 2026' report shows that faster approvals and reduced wait times have never been more important for the customer experience, although technology can only do so much to help.
“The biggest impediment at the moment is ensuring we’ve got all that information packaged upfront,” said Barry Saoud (pictured, left), chief executive of mortgages and commercial lending at Pepper Money.
Incomplete applications that trigger back-and-forth requests between lender and borrower can add days to the application process, which no amount of technological prowess can fix.
That being said, the vast majority of lenders (82%) believe AI plays a major role in document processing and workflow automation.
Credit: NextGen
Mario Emmanuel (pictured, centre), co-founder of Skip (recently rebranded from Sucasa), said: “Scaling our quality human-led service is an opportunity we’re investing in. AI empowers our Australian team with data-led insights and automations which ‘skip’ over manual data entry and enable more applications by removing easily automated tasks.”
However, caution and human judgement must always play a central role in lending decisions. Recent developments at Commonwealth Bank – which recently reported itself to authorities over a suspected $1 billion of AI-powered home loan fraud – show how AI can be used inappropriately without adequate guardrails.
“The winning formula combines AI’s speed and consistency for routine tasks with human expertise for relationship-building and complex problem-solving,” said Nextgen.
Most lenders (82%) believe AI should deliver the most value in document processing and workflow automation, with 79% believing it should be used for fraud detection and compliance monitoring. The majority of lenders also believe AI plays a role in credit decisioning and risk scoring.
Open banking driving better income-verification outcomes
Open banking presents perhaps greater potential to drive efficiencies in the mortgage sector than AI.
Open banking has been gaining traction in the Australian financial services sector since the formal launch of the Consumer Data Right (CDR) legislation in July 2020, which required major banks to make certain product and consumer data available to accredited third parties upon consumer request.
Credit: NextGen
“When you can see someone’s complete financial position through open banking, you can look across the market and help those customers to get a better financial deal across all their different financial products. This helps them with their spending and budgeting,” said Richard Burton, chief financial officer of Newcastle Greater Mutual Group.
Mortgage Choice, which recently adopted NextGen’s Frollo Financial Passport to facilitate open banking for its 1,100-plus brokers, says the technology can save up to 90 minutes per deal.
The NextGen survey shows that 80% of lenders believe open banking delivers better income-verification outcomes, with 73% of lenders believing it improves fraud protection and risk management. The majority of lenders also reckon open banking leads to faster loan approvals and more streamlined refinancing.
Lenders also mentioned that by accessing a customer’s complete financial picture across multiple institutions, they can make more informed, responsible lending
The bottom line
While technologies like AI and open banking are becoming more ingrained in the Australian mortgage market, the fundamental needs and demands of modern mortgage professionals haven’t changed – they want speed, reliability and certainty of outcome.
As Sergio Delvescovo (pictured, right), national sales manager – Broker at ING Australia, said: “Brokers reward lenders that make their lives easier.”
Access to cutting-edge technology is democratising the lending market, but the best lenders understand that technology is a support mechanism for best-in-class service, not a replacement.
As Saoud said: “Product and policy is important. But if you can couple it with consistency and certainty for brokers on credit outcome, that’s the key to driving significant competitive advantage.”
