New mortgage tech means faster commissions and less fraud

"There will be faster settlements, which will mean faster commissions," Mr Baba told The Adviser.

"There will be no chance of a settlement falling over because of incorrect cheques or incorrect title documents, because these details are verified and agreed well in advance."

The new PEXA system, which is named after the government agency overseeing the process, celebrated a milestone this week when online property transfers became available to select property lawyers and conveyancers in Sydney and Wollongong.

More than half of Australia's population will theoretically be covered by PEXA in February, when it is rolled out throughout NSW and Victoria. The other states will follow at a later date.

Mr Baba said e-conveyancing was a "revolutionary development" for the broking industry because settlements would become much more efficient, as well as less prone to fraud.

"With physical settlement there is the small risk that somebody could turn up with fraudulent documents that are exchanged at settlement," he said.

"With PEXA, that's not possible, because everything is verified online with the Land Titles Office before settlement."

Mr Baba said PEXA's "more robust" identification process would also reduce the risk of identity fraud, because conveyancers and solicitors will need to have their identity verified to use PEXA.

Patti Eyers, chief executive of mortgage processing firm First Mortgage Services, recently told The Adviser that PEXA would transform Australia's settlement process from being "quite far behind" other countries to "far advanced".

PEXA itself told the Financial System Inquiry that e-conveyancing would boost mortgage competition by reducing any scale-cost advantages that the major banks have in processing mortgages.

It also said the introduction of electronic mortgages with standardised terms and conditions would allow greater transportability of mortgages and make it harder for banks to impede customers who want to refinance.

"Refinancing will be considerably easier and rates likely to be more competitive from smaller financial institutions," PEXA's submission said.