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Lenders need to ‘get with the program’ on digitised variations

by Hannah Dowling4 minute read
Tony Carn

With digital loan applications now an industry standard, lenders should be focused on the digitisation of the loans variations process, according to a technology chief customer officer.

NextGen.Net chief customer officer Tony Carn said he believes it is time for lenders to “get with the program” and embrace the technology available to make loan variations easier.

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Mr Carn made note of the fact that while digital loan applications are now standard across the industry, similar offerings for loan variations – such as term extensions, product splits, the release of a guarantor, or switching from interest-only to principal and interest – remain neglected.

“Astonishingly, some lenders still utilise the unwieldy, time-consuming, outdated, manual method of loan variations or, alternatively, the customer self-service option,” he said.


“For brokers, this archaic practice translates as a failure to provide them with a variations process that’s as efficient, fast and compliant as the new loan process.”

According to Mr Carn, loan variations make up a third of brokers’ transactions, and the ability to complete such processes digitally allows brokers to fully service their customers throughout the life of their loan.

With this in mind, Mr Carn believes “lenders need to get with the program and address this glaring inconsistency”.

“Lenders who provide brokers with... a standardised approach to manage customers variations throughout the life cycle of their loans don’t just empower brokers and eliminate any fear or perception of channel conflict, they ensure retention of ownership of the loan,” he said. 

Mr Carn also highlights that changing regulatory requirements and compliance issues in lending mean that digitising loan variations should be a clear step for lenders.

“If the circumstances of an existing customer loan change, what is being approved needs to align to regulatory requirements and objectives and, bottom line, the customer’s best interests.

“The best way to do that is by having not only a clear process but also a robust one that is auditable and demonstrable with what was done initially,” Mr Carn said.

He concluded: “We know what brokers do for lenders regarding the ongoing management of customers. In many instances, however, lenders fail to empower brokers to easily facilitate transactions by using a clear, auditable and traceable process for variations.” 

[Related: Treasurer blasts big 4 for failing to pass on full cut]

Lenders need to ‘get with the program’ on digitised variations
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Hannah Dowling

Hannah Dowling


Hannah Dowling is a journalist for The Adviser and Mortgage Business.


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