Between 20 and 60 per cent of all broker applications require rework from funders due to problems with identification submissions, according to ZipID’s Sean Simmons and Dave Fleming.
Speaking to The Adviser, the creators behind ZipID, an Equifax-owned face-to-face identity service, said that streamlining the verification of identity (VOI) process was crucial to improving the loan experience and boosting turnaround times, as up to 60 per cent of broker applications require rework by the funder.
ZipID co-founder Dave Fleming said: “We’ve engaged with all funders about where some of their barriers are, and rework comes into that. When rework occurs in bank processing, it’s a problem because rework means people manually correcting errors or going ‘back to the well’ and fixing problems. It’s causing approval delay and there’s a labour cost too of going through the churn of handling broker submissions.
“We’ve been told that at least 20 per cent of all broker applications are being reworked by the bank because of ID problems. The worst we’ve heard is 60 per cent. Every funder — and they're happy to be transparent about this with us — is in the range of 20-60 per cent of all broker applications are causing ID rework by the funder.”
According to the co-founders, many of the problems involved are due to unclear copies of identification. As such, the company has said it has seen an increasing number of lenders and brokers alike using ZipID’s app to improve workflow and reduce rework problems.
Mr Fleming added: “Brokers want to simplify the ID capture, to do one process that then can then apply to different lenders, while banks want to remove rework the ID capture creates and be easier to work with for brokers.
“So, you've got those overarching things that everyone wants to do — banks, brokers, customers, about digitising that process, speeding up the application and I think importantly on the banks' and aggregators' end — being risk averse.
“Every lender we speak to is moving further away from taking any riskier practices in regards to any of their processes and this ASIC review and responsible lending, it’s all about how can we ensure we're buttoned up and fully compliant.”
Mr Simmons agreed, adding: “We do see risk and compliance appetites tightening in the current market, generally. So, the primary business case for why solutions like ours are gaining attentions of funders is that we are able to take cost and delay out of the approval process. It starts with risk and compliance, but it then morphs into an efficiency dividend that we deliver to funders.”
[Related: Boutique aggregator partners with ZipID]
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