One of Australia’s largest loan processing groups has launched a new, zero-aggregation-fee platform that aims to help brokers free up time and “triple their volumes”.
Loan processing specialist xSource has now launched XSOURCE Aggregation Pty Ltd.
While brokers will have to pay for the xSource CRM (based on Salestrekker software) and a per-settlement fee for loan processing (plus any other optional services), there is no charge for signing up to the aggregator.
According to the company, XSOURCE Aggregation provides access to a full lender panel, where commission schedules are 100 per cent retained by the broker. The online CRM also helps brokers communicate with clients, provides automatic updates from lead to settlement, and has a client portal feature that allows access to their loan application.
The CRM contains a full suite of sales and compliance tools and integrates with lender lodgement systems.
A limited number of broker businesses are being invited to invest in the new venture, as it heads towards official launch on 1 July.
Speaking to The Adviser, xSource CEO Dalibor Ivkovic said the aggregation company was launched in response to broker demand.
“In the last calendar year, we processed half a billion dollars’ worth of home loans for about 600 different customers. [But], because we deal with so many different aggregators and different systems and different compliance regimes etc. there was a lot of inefficiencies in our loan processing business. The way to solve those inefficiencies is to go through a single platform. And, the only way to do that is to do it yourself,” he said.
“We thought an aggregation company would work because we were getting leads every month from the loan processing side of the business, and about 20 per cent of these leads were about either changing aggregator or asking us who we thought was the best aggregator. At the moment, most of the people who use xSource pay an aggregation fee to their aggregator and then they pay us a processing fee. So, what we're saying is if you go through us for aggregation you will not need to pay any aggregation fee — you only pay a processing fee and that's a flat fee paid on settlement.”
He added: “Our existing clients had been asking for us for years to go into aggregation so everything could be with one party and offer more services, like asset finance. So, we are delivering on that request.”
Other optional services offered through the aggregation company include the usual marketing, business activity statements and tax services, as well as the more innovative ‘parabroking’ and ‘virtual assistant’ offerings.
The latter two services aim to ease the workload of a broker.
Mr Ivkovic explained what the ‘parabroking’ service offers: “What we seen in the last 18 months is that emphasis has gone from pure loan processing and paperwork into more research and analysis, mostly because lenders are changing the game more frequently, especially when it comes to investor loans.
“So, the brokers that used to have really good knowledge of their products across, let’s say, seven lenders, can’t rely on them anymore because they have all changed their policy so dramatically. What it means is that they can’t rely on their aggregator software for a lot of servicing calculations, they have to do it manually through each lender's servicing calculator and that changes all the time. Suddenly, something that used to take them 20 minutes now takes them four hours.
“Plus, they might have a client who has several investment properties and suddenly the lenders that they use aren’t going to take the loan, so they need to go and research and find lenders that will. That takes time. And we are offering our parabroking resources to do that.”
Meanwhile, the ‘virtual assistant’ service is a bolt-on to the parabroker and loan processor, and handles clients from lead to settlement.
“So, the parabroker talks to the lenders about what the best product is and how you place the particular scenario with them, and the loan processor puts it into ApplyOnline and produces the compliance documents and tracks the deals with the lenders, while the virtual assistant talks to borrowers from lead to settlement and helps brokers collect supporting documents and ID the client, and helps the client during the settlement process and any other support during and post settlement,” Mr Ivkovic explained.
“We are industrialising the loan process,” he said. “It’s like having your own back office. So, our aggregation will cost you money from the back-office support, but you are buying back your time by paying those for the three-piece suite of the back office.”
One claim that XSOURCE Aggregation says sets it apart, is making sure that “everything happens in 24 hours”.
Mr Ivkovic said that because everything is offshored to Serbia, work can be done while Australian brokers sleep.
He said: “Everything happens within 24 hours — we don’t accept any outcomes outside of 24 hours, which is non-existent in the mortgage and finance industry these days.
“It's actually a competitive advantage. The broker gives us a scenario, they go to sleep, we do the work in Serbia, they wake up and they get out, so they virtually don’t lose any business hours or any sleep over it.
“When we do studies with our clients and get feedback, that is the main reason why they like us,” he said.
“I don’t understand why lenders aren’t doing that — we have found that they can. And that speed is important in this industry. It’s important for the customer and it’s important to the advisers as well,” he added.
According to the CEO, he hopes that the new offering could help triple a broker’s volumes.
He said: “The principle may have little time to convert a client and provide high quality-advice. What we provide is someone else to help you with the back-office support and that will assist you in the other parts of service to your client, so you can actually triple your volumes.
“So, we want to offer loan writers to be more efficient by using us… The idea is to offer brokers all the solution areas that can actually increase their volumes. Typical brokers are settling $1.2 million [a month] and we don’t see why brokers can’t be settling 10 million dollars plus.”
Mr Ivkovic added: “If brokers can spend quality time with their clients — understanding their needs and proving advice that is suitable for them (which could be refinancing their current home loans, a new house with home loan, SMSF loan or a suitable car finance), these things that have been happening through the media with car yards etc. – it’s a no-brainer.”
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