Dr Shane Rigby, the new CEO of LIXI, reveals what the body has been up to since he stepped into the role left vacant by former Yellow Brick Road CEO of lending, Tim Brown.
LIXI is a not-for-profit company that develops data message transaction standards for the Australian lending industry.
Mr Rigby, who had been chief technology officer at LIXI for the past two years, took up the role as CEO at the beginning of July.
Mr Brown, the former CEO of lending at ASX-listed YBR, was originally announced as the new CEO in December 2016. However, he never stepped into the role in January as expected.
While Mr Rigby said he did not know the particulars behind “what transpired between the board and him [Mr Brown]”, he acknowledged that Mr Brown “never actually started” at the industry body, and that the role had been vacant ever since.
LIXI is “democratising” mortgage processing
According to LIXI’s new CEO, his previous role focused on “working fairly intently on the strategy . . . and building up the tools in our capability”, whereas now he will be much more focused on the governance and financial sustainability of the member not-for-profit organisation.
He explained that his main objective is to help the organisation “lower the costs of executing all the processes required in business-to-business communication” and standardise those communication paths so that any systems used in the digital processing of a mortgage “from the point of application through to credit-decisioning through provisioning and then further down the track servicing” can talk to each other.
Mr Rigby elaborated: “Historically, brokers were walking around streets with briefcases full of application forms – physically printed application forms – and every lender had a different one. But they nearly all asked the same questions, albeit in slightly different ways.”
He gave the example of one application asking for the mortgagor's annual income, while another asking for the gross monthly income.
“The objective of the first round of LIXI, back in 2000, was to take all those paper forms and standardise them as much as they could be," he said. "Now, we’re working on finding an electronic format so the systems can talk to each other, pass the data on and understand it.”
The new CEO revealed that the body is currently looking at the “API economy” (application programming interface economy) so that these “chatty” IT systems are not only passing along messages, but also picking up process from wherever they left off.
“Let’s say you start a mortgage application form on a mobile phone, you could then pick it up on a loan application in the office, or have the client log in and process it a little bit further," he said.
“The systems should be able to communicate and make it obvious where extra information is needed,” Mr Rigby said, adding that such standardised systems could open up the lending market to cover mortgages, equipment finance, personal loans, small-to-medium business lending, and even, potentially, wealth management (as the data used in the processing of these loans are “very similar”) – thus saving time and reducing administrative duplication.
The LIXI CEO said that the body was therefore working to set up the “underlying infrastructure in such a way that future technology projects can be built in a much more efficient way”.
He explained: “In future, what you should start to see is that it will become a lot easier for software providers, lenders, banks – anyone building this technology – to evolve.
“Where we are heading is a long way from where we started and from a technology level that gets really interesting in terms of how to make it work seamlessly all the way through.
“Standardisation should mean that once you’ve implemented it, moving between lenders and suppliers, etc., should be very straightforward."
“That means it lowers the cost of changing and has a direct impact on a provider's ability to charge unreasonable rates. So, it would make the market much more open,” he added.
In essence, he says, the standardisation and democratisation of lending data could radically improve mortgage processing.
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