A new voice-activated app enabling brokers to record and store conversations with clients should be developed to help keep them safe from disputes, according to the head of YBR.
Speaking at the National Finance Brokers Day event in Sydney last week, Mark Bouris, the executive chairman of financial services firm Yellow Brick Road (YBR), said that he supports the development of an app that records conversations between brokers and clients and stores them in the cloud so that it can later be accessed by regulators, lenders, aggregators and customers.
The executive chairman noted the “slow shift of responsibility towards [brokers]”, with lenders updating their credit policies to ensure brokers conduct thorough financial checks on customers, saying that there is a need for improved and digital record-keeping.
Even the Australian Securities and Investments Commission (ASIC) stressed that lenders should not offload blame to third parties when a loan is found to be in breach of responsible lending obligations.
“If you said something to the customer that they want to dispute and if that is kept as a verbal record as opposed to just a written record — because a written record is your record, a verbal record is your voice being recorded on an app — it’s going to be really hard to dispute that’s not your voice,” Mr Bouris said.
The need for such a recording app, according to the YBR executive chairman, is further supported by the likelihood of a new best interest obligation being introduced, as recommended by the Productivity Commission in its final report on competition in the Australian financial system.
According to the government advisory body, the best interest obligation would govern the process through which brokers prepare recommendations for their clients — including identifying and considering the client’s needs, objectives, priorities and preferences — and also contain disclosures on why a particular loan was recommended as well as real or potential conflicts of interest.
Mr Bouris believes that a best interest obligation will likely be introduced and that it will “put a greater burden” on brokers.
The YBR executive chairman said: “From a compliance point of view, you need to keep really good records and you need to make sure that those records reflect a really good customer experience.”
He continued: “A really good customer experience for the customer means the customer has been taken through the journey and it has been done as a complete, honest and transparent way with full facts and full disclosure and accurate facts and accurate disclosure.
“Everyone will say, ‘Yeah, I always do that’. But you need to be able to prove it.”
There are a number of cloud-based recording applications in the market and apps that are aimed at helping brokers remain compliant in an increasingly complex lending environment.
For example, the Opica Group’s AI-powered expenses verification engine, RELIE, aims to help “protect any broker or lender from a breach of their responsible lending requirements”.
The RELIE engine makes use of a specially built AI engine, Sherlock, which analyses a consumer’s banking and credit card transaction data over a period of 12 months and automatically provides “income verification, an understanding of the client’s mandatory expenditure, and therefore their ability to service a loan”.
According to founder Brett Spencer, the platform is needed because “lenders traditionally have been very quick to put blame on brokers for any application that goes sour”.
Mr Spencer said that following a tighter regulatory environment and “greater scrutiny being placed on our industry by regulators”, the group identified that “brokers needed something that provided them some protection”.
As such, it built the RELIE platform to enable brokers (and lenders) to perform a “RelieCheck” that could prove they had done the adequate checks into expenses and the consumer’s ability to service the loan.
CashDeck’s Credit Ready tool also enables brokers to retrieve clients’ bank statements and provide a detailed living expense analysis.