The specialist lender has partnered with e4 Australia to become the first lender to adopt the tech company’s Virtual Verification of Identity (Virtual VOI) in loan applications.
Developed by South African regulation technology company e4, the Virtual VOI platform aims to reduce the cost and time of the verification of identity (VOI) process of mortgage writing.
Billed as a “fully digital alternative to in-person face-to-face identification of customers”, Virtual VOI enables brokers to make secure video and audio calls to customers, which 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 verification.
On completion of the call, the platform compresses all video and audio records and produces a VOI report. These records are then stored for future use and as record of due diligence should any dispute arise.
Although the technology has already been used by online platform HashChing since last year, La Trobe Financial has become the first lender to formally approve Virtual VOI for usage by brokers in the submission of mortgage applications.
Speaking of the partnership, Cory Bannister, La Trobe Financial’s chief lending officer, told The Adviser that the solution has been taken up in recognition of “the importance for brokers when it comes to meeting settlement expectations for their clients”.
Mr Bannister added that while “efficiency and excellent customer service” is of paramount importance to brokers, “innovation and technology [such as electronic VOI] is also playing an important role in the evolution [of] the finance sector”.
“The introduction of electronic mortgage documentation will reduce errors and speed up the settlement process,” the chief lending officer said.
“As innovative leaders ourselves, we understood immediately the benefits that electronic VOI can deliver. We have recently approved e4 as an electronic VOI provider and were particularly impressed with the due diligence and biometric cross-checks built into their application.”
“We do comply with the ‘reasonable steps’ provision”
La Trobe Financial particularly noted that as Virtual VOI “eliminates the need for the broker to meet face-to-face with the client”, it could be particularly beneficial for regional brokers, or for occasions when brokers are overseas at the time of transaction.
“The Virtual VOI process is paperless and the identification checks are all completed by authorised government bodies, meaning they are accurate and secured checks,” Mr Bannister said.
The lender has said that it will now accept both electronic and paper VOI in broker-introduced loan applications.
Speaking of the fact that there is no face-to-face element, e4’s co-founder and director, Stuart Hosford, emphasised to The Adviser that the platform does comply with VOI requirements.
“From an ARNECC [Australian Registrars’ National Electronic Conveyancing Council] perspective, while we do not comply with the in-person face-to-face verification of identity standard as defined in the Mortgage Participation Rules, we do comply with the ‘reasonable steps’ provision outlined as an alternative in that same document,” Mr Hosford said.
He also welcomed the partnership with La Trobe Financial, saying that it was “exactly the type of financial institution [e4] wants to be working with”.
Elaborating, the director explained: “They are both innovative and customer-centric, and [they] recognise the importance of customer choice and convenience as a differentiator in a highly competitive market.
“La Trobe Financial [is] the first lender to formally approve Virtual VOI for usage by brokers in the submission of mortgage applications. Our view is that over time this will become a standard digital alternative offered to customers across all lenders.”
The e4 director revealed that he expects to partner with more lenders in the course of the year “for both broker and direct-to-lender channels”. His company will also be launching a standalone Virtual VOI portal in due course, which will be made available to any broker wishing to use it.
Lenders increasingly looking to digitise VOI
Several lenders have looked at digitising the VOI process in recent months. NAB and Bluestone both announced last year that they would accept identity reports for broker customers via the IDyou and ZipID apps, while credit union CUA became the first lender to trial a new digital identity verification service launched by Australia Post last year, Digital iD™.
Speaking to The Adviser last year, Australia Post’s general manager for digital identity, Cameron Gough, said that the company was also looking into how the Digital iD™ app could be used in the mortgage industry and was working “quite closely with the regulators and ARNECC” to understand what “changes in rules they might be comfortable applying” to digital VOI services.
Should the regulators and ARNECC make virtual VOI permissible in the mortgage application process, Mr Gough said that the intent would be to make the Digital iD™ app available to “the whole banking industry”, which he argued could free up $11 billion of economic value.
[Related: Virtual Identity]