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Innovative Virtual VOI platform avoids big four banks

virtual voi

virtual voi
Reporter 4 minute read

A new virtual verification of identify service has revealed that it is targeting mid-tier lenders, aggregators and brokers over the “big four banks”, as it believes the majors “are not incentivised to keep people out of their branches”.

The Virtual VOI platform from South African regulation technology company e4 is said to be Australia’s “first real-time, ‘virtual’ alternative to face-to-face ID verification” for home loans. 

Using the platform, lenders or brokers are able to make secure video and audio calls to customers and run biometric facial recognition software to match the live customer image to the ID documentation (driver’s license, passport) supplied and uploaded as part of the call. 

In addition to the facial recognition, all Australian issued identification documents can be authenticated to the Australian Attorney General’s Department Documentation Verification Service (DVS), with the verified results being passed back to the verifier (i.e. a lender or broker) for review in a matter of seconds. 

On completion of the call, the platform compresses all video and audio records, and produces a VOI report. These records are then stored for future use and as record of due diligence should any dispute arise. 

According to e4, the Virtual VOI is a way for a lender, broker or institution to “identify their new customer to regulatory standards from anywhere with an internet connection in 10 minutes or less”. 

It could also improve the turnaround time of loan applications, as it negates the need for customers to present themselves to bank branches or post offices to verify their identify face-to-face. 

Brokers and smaller lenders over big four

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The first implementation of the Virtual VOI in Australia has been through consumer mortgage website HashChing, which uses e4 to provide a Virtual VOI capability to its broker panel when submitting new mortgage application to lenders. 

A full rollout of the Virtual VOI on HashChing is expected in the next month. 

The company has also been in talks with aggregators AFG, Connective and mortgage giant Aussie, as well as banks such as ING DIRECT, Bendigo & Adelaide Bank, HSBC, CUA and Liberty. 

Speaking at the launch of the platform yesterday, e4 managing director Stuart Hosford said that the company is specifically targeting digital lenders, mid-tier lenders and aggregators. 

Mr Hosford explained: “Brokers are striving to do some of this already but leaving themselves quite exposed when they do anything of this digitally because they have no proof of record, so this is something that adds value to them immediately. The fact that then we can connect with lenders and they will consume this in the process and make it two weeks shorter (because you aren’t waiting for the customer to do their identity verification) is great for them. They know that they will get the commissions quicker, the customer will be happier, and it’s a better experience all round. So, the broker and aggregator response has been hugely favourable. 

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“We will then extend that broker model through the mortgage aggregator groups… and they are very, very keen in embedding these in their existing portals. Take AFG, for example, they have thousands of brokers and we could quite easily, and will, embed this into their CRM platforms and then the brokers have the ability to click on a button and schedule a very short call and run this process through with their customer and shoot the information through to the lender. It’s simple.” 

Touching on why he wishes to avoid the big four banks, the MD said: “I’m purposefully staying away from the big four at the moment, for a couple of reasons. Firstly, they have the reason to turn innovation around very quickly. So, they could, potentially, replicate some of these things we are offering. So, we weren’t talking too much with them about what we were doing before. But also, the smaller lenders are much quicker to engage with us. We are a small business and want to work quickly to prove our concept. 

“Secondly, the big four banks are not necessarily incentivised or motivated to keep people out of branches. So, like anything fintech, the big four engage when they are forced to. They don’t really do it off their own bat, even though they say they will. They make $7 billion of profit a year, and if they can keep it exactly like it is, they absolutely would. 

He added: “But, as soon as they start to get pressure from the smaller and mid-tiers then they do have to jump on board and do something... But, until then, the [big four] like to get people in branch because they can maintain the relationship and cross sell. 

“It’s not really in their interest to find ways to keep people out of branches unless they absolutely have to.” 

Mr Hosford concluded: “The traditional process has been really hampering the drive to digital mortgages. There is a lot of digital innovation but it is very frustrating for those digital lenders and consumers where there are points in the process where the digital process simply fails. So, we are driving towards the aspiration of a fully digital mortgage. Until we have something like this [Virtual VOI] in place, that will never be a reality. So, we are initially focused on lenders and brokers because they are the main distribution streams in terms of getting mortgages out to market.” 

[Related: Agents of identity]

Innovative Virtual VOI platform avoids big four banks
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