Faster, more responsible decisions with frictionless bank data

Posted by Marc Jarvis on Oct 23, 2019 2:12:45 PM

Faster, more responsible decisions with frictionless bank data

Lenders are achieving significantly faster loan assessments by leveraging a straight-through processing model enabled by financial technology.

Automated bank data retrieval technology instantly provides lenders with customer bank data to enable them to verify income and expenses so they can make faster, more responsible credit decisions.

Leading the charge with bank data retrieval technology in the Australian and New Zealand markets is illion Open Data Solutions, who currently provide transaction data from more than 150 Australian institutions and a further 20 institutions in New Zealand.

How does it work?

illion Open Data Solutions' technology retrieves up to twelve months of transaction data from a customer's bank account, produces an analysis on this data and provides the lender with specific decision metrics, all within 6 seconds per account.

Besides the speed factor, what's equally impressive is illion's machine learning algorithm which sits as an overlay on top of the bank data, intelligently analysing and categorising the transactions to help lenders' assessment teams find key information quickly so they can make faster, smarter decisions.

Survey confirms results

In a recent survey, we asked 400 bank and non-bank lenders using our bank data retrieval and analytics services how we had helped improve their business. The results were remarkable, and illustrate the important role illion's service plays in assessment, decisioning and responsible lending processes for lenders and the wider credit and lending industry.

Lenders using illion's bank data technology told us that it has helped them with AML & KYC compliance and the mitigation of fraud, as well as helping them to more accurately identify customer over-indebtedness.

With more than a quarter of Australian households classified as ’over-indebted’ in terms of their debt-to-income ratio – and servicing a total debt that is three or more times their annualised disposable income – having access to an intelligent technology tool that can help lenders identify credit risk is essential. View our responsible lending infographic to see more of the key survey findings.

Nearly every lender surveyed said that illion Open Data Solutions has improved their business efficiency, and 95% said using our data gives them a competitive edge in terms of speed of processing and overall accuracy. In fact, 76% said the estimation of income and expenses was now more accurate than their previous process and this level of accuracy translates into faster assessments and more responsible decisions.

What customers are saying

This has proven the case with one major Australian auto lender having reduced vehicle finance assessment times by 30 minutes per application.

In another example, since employing BankStatements in their lending process, Australia's first peer-to-peer lender – SocietyOne – has noted a huge increase in onboarding and retrieval efficiency. Their previous process of manual bank statement submission resulted in an elongated approval processes which increased bounce rates during the onboarding process.

Following successful integration with illion BankStatements, SocieyOne's assessors receive income, expenses and debts efficiently categorised and arranged to allow them to intuitively access desired records, greatly reducing the time spent on each applicant’s review.

“Our approval times have dropped by 80%. It used to take an average of five days from a lead to approval. It now takes us on average one business day or less as we have reduced friction both for a customer and our team. Assessment time has also decreased by 30%. It takes about one hour to assess “paper statements”, but only 30-40 minutes for bank statements”, says Jonathan Chan, Chief Operating Officer at SocietyOne.

For business and auto financiers, illion has further changed the game for both lenders and brokers with its BrokerFlow product, an innovative solution unique to illion that was nominated for 'Best Banking Innovation' at the 2018 Finder Awards shortly after it launched.

illion's BrokerFlow radically speeds up loan assessments for applications received from a lender's broker channel and has been adopted by some of Australia's biggest players in the non-bank business finance and auto lending industries. In essence, BrokerFlow streamlines decisioning and cuts assessment times by removing the manual document submission process for brokers on the one hand, and on the other hand eliminates the need for the lender's assessment team to sift through all the bank statement documents to verify income and expenses. It's a win-win for brokers and lenders – and ultimately their customers.

What's next?

The phased implementation of Open Banking in Australia in 2019 is not intended simply to renovate and digitise existing systems – it will evolve them and take them to the ‘next level’ to suit specific customer requirements. It’s a bold move from siloed financial services to an integrated suite of solutions, and illion is in a strong position to provide the richer data that will drive smarter lending decisions and industry compliance. Look out for much more on this soon!

Download the complete responsible lending survey findings for lenders and brokers here.

Download Survey Findings


Topics: Responsible Lending, Finance Brokers