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New virtual ID verification tool for brokers launches

by Reporter6 minute read
Fraser Todd, ID verification

An Australian law practice has announced the launch of a new digital verification of identity (VOI) solution for mortgage brokers and lenders to conduct fast ID checks.

Max ID, a law practice and regtech solutions provider, has announced the launch of a new VOI tool aimed at helping brokers and lenders conduct “simple, efficient and inexpensive same-day ‘safe harbour’ identity verification for mortgages and property services transactions”.

The company claimed that the ID verification is legally certified in all states and territories in Australia and can be completed in less than 10 minutes. It further claimed that its tool, by removing friction, would enable lenders to provide “intra-day unconditional home loan approvals”.

Speaking of traditional ID verification processes, Fraser Todd, co-founder of Max ID, said: “Current identity verification solutions in the market require mortgage customers to take time out of their busy working days to visit a ‘bricks and mortar’ branch or wait for a courier driver or mortgage broker to sight and photograph identification documentation.

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“These processes are often expensive and may add days to an approval process, not to mention the inconvenience experienced by the customer, particularly those in regional areas of Australia.”

Mr Todd noted that other professionals such as lawyers, conveyancers and settlement agents experience similar compliance challenges.

“With the move to electronic settlements becoming mandatory in NSW and Victoria during 2019, the ability to conduct identity verification efficiently has never been more important,” the Max ID co-founder added.

According to the regtech firm, the VOI solution can be integrated into brokers’ and lenders’ existing “technology ecosystems” and does not require the customer to install any mobile apps.

It also claimed that the tool makes compliance with Know Your Customer (KYC) and anti-money laundering and counter-terrorism financing (AML/CTF) regulations “simpler and more attainable” for businesses that are required to report to AUSTRAC.

Alistair Morgan, co-founder and the legal director at Max ID, said: “With compliance audits now underway in a number of states, you don’t want to spend your valuable time justifying why your system or app constitutes reasonable steps.

“If you don’t meet the VOI safe harbour requirements, you should explore whether your provider is prepared to provide a strong legal opinion that their solution constitutes reasonable steps; if not, consider changing those procedures or use an identity agent such as Max ID that will deliver a legally certified safe harbour solution for you to rely on.”

Another technology that debuted in the Australian lending market this year is the VOI solution by regtech company e4.

La Trobe Financial was reported as the first lender to adopt the solution, which enables brokers to make secure video and audio calls to customers that are overlaid with “key systematic authentication checks that cannot be performed in pure face-to-face conversations”, including facial biometric matching, location tagging and document authentication.

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

The specialist lender earlier this year claimed that, given Virtual VOI “eliminates the need for the broker to meet face-to-face with the client”, it could be particularly beneficial for regional brokers. It also said that the solution had been adopted in recognition of “the importance for brokers when it comes to meeting settlement expectations for their clients”, insisting that it will reduce errors and speed up the settlement process.

The government has expressed interest in supporting the development of regtech solutions that will make regulation enforcement and compliance easier, recently committing to providing the Australian Securities and Investments Commission with $6 million to “promote Australia as a world leader in the development and adoption of regulatory technology solutions” for the financial services industry.

New Prime Minister Scott Morrison in August said: “Regulation isn’t just putting together an encyclopedia, a phone book of regulation. That rarely helps anyone.

“Regulations are supposed to help institutions, help companies, help customers better understand what their obligations are, and what their rights are, and what their protections are.

“Regtech is a way of simplifying the morass of regulation which is out there which can just confuse people or make it harder for companies to actually comply with.”

[Related: La Trobe Financial adopts Virtual VOI]

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