Powered by MOMENTUM MEDIA
the adviser logo
Aggregator

Major aggregator tracking broker risk patterns

by James Mitchell5 minute read
Loan application

Vow Financial is ramping up its compliance processes by monitoring granular data of loan applications to identify poor behaviour and manage potential risks within its ranks.

The Yellow Brick Road-owned group has been examining data from lenders as well as its own finance team in an effort to flag potential issues ahead of time.

To continue reading the rest of this article, create a free account
Already have an account? Sign in

“We get data from our shadow-shopping work, we get data from our audit work, we get data from our finance team. Now we will be receiving additional data from the lenders,” YBR chief risk officer Sean Preece told The Adviser.

“It all goes into effectively building a profile on an individual broker. The supervision and monitoring is about risk management. There are people who are more likely to present risk and profiling those people by using that data enables us to focus our efforts and attention on those people who potentially present the most risk to us,” the CRO explained.

Advertisement
Advertisement

The data being collected covers different facets of the mortgage application and is used to identify, among other trends, those brokers using HEM or less to calculate client living expenses, as well as certain characteristics of applicants, such as those living with their parents and not paying rent.

“There might be reasons for some anomalies, but typically when you see consistency in alarms, it usually presents as a reason for us to make further inquiries,” Mr Preece said.

“That then focuses our efforts on those people to identify whether it is consistent with bad performance or bad behaviour, and then we take action.”

The aggregator has previously relied on loan data provided by lenders “after the event”, at drawdown or arrears. But the group is now confident that by capturing data at the application stage, it can tackle any potential risks earlier.

“The data we are getting is on applications,” Vow general manager Clive Kirkpatrick said.

“In the past, we have been relying on either after drawdown or at arrears. That happens after the event. Whereas the data we are getting now is at application. It is earlier on in the funnel where we can actually start to spot core behaviours. 

“In reality, it is a very small percentage of people in the industry who are doing the wrong thing and committing frauds and misrepresentations. Some broker[s] may have flaws in their audit process around education or process gaps, but they are solvable.”

[Related: Major bank concedes brokers were ‘bypassing’ mortgage controls]

Major aggregator tracking broker risk patterns
loan application
TheAdviser logo
loan application

James Mitchell

James Mitchell

AUTHOR

James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

Glen Lees

Connective announces record settlement figures

Mortgage aggregator Connective has revealed that its brokers settled a record $95.5 billion across its residential,...

READ MORE
charles grover outfund ta zgvq5o

New SME lender launches into broker channel

A new fintech lender, Outfund, is ramping up for growth through the broker channel after having completed a capital...

READ MORE
david bailey afg ta l8ozkr

AFG’s bottom line hit by Volt closure

The ASX-listed company, Australian Finance Group Ltd (ASX: AFG) has confirmed it is set to deliver “strong...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more