Lenders can now verify an applicant’s declared income using a new open banking-backed feature.
Technology provider NextGen has introduced an automated income verification feature within its mortgage lodgement platform ApplyOnline.
Available for PAYG income in its first release, the feature is designed to use open banking to instantly verify an applicant’s income, letting lenders make faster decisions while cutting operational overheads and risk.
The feature is available for lenders to use in the ApplyOnline lending platform for both broker and lender workflows, removing the need for third-party integrations or separate platforms.
The tech is built to use algorithm-driven analysis, identifying salary patterns, pay frequency, and employer consistency.
It can also provide assessors with a clear view of income verification status and supporting data, while being able to automatically adjust document requirements based on verification outcomes.
The change marks a step forward in transforming income assessment for lenders, replacing document-based processes with secure, data-driven automation, the tech firm said.
“Income verification has long been a friction point in the lending process,” said Tony Carn, chief customer officer at NextGen.
“Automated income verification empowers lenders to move beyond manual processes and exploit the power of open banking to deliver a more cost-efficient, secure and customer-friendly lending experience.”
Open banking could give brokerages a boost
NextGen has previously touted the potential benefits of open banking for brokers and outlined that its new income verification tool can use open banking to access transaction data with applicant consent, ensuring data accuracy, authenticity and compliance.
CBA, Westpac, and NAB have all enabled open banking in NextGen’s ApplyOnline, with more lenders expected to follow.
However, while open banking use in the broker channel has risen over the past year, broader challenges persist, with Frollo research finding that nearly 30 per cent of consent authorisations fail during bank authentication.
Separate research commissioned by NextGen and conducted by Agile Market Intelligence showed that brokers could be missing out on open banking benefits, and that take-up of open banking features built into ApplyOnline has been low.
A key factor behind low adoption has been a continued reliance on legacy systems such as screen scraping and manual document uploads, with the majority of brokers (76 per cent) primarily relying on screen-scraping technologies, rather than open banking tools to gather information from their clients, according to NextGen.
[Related: Open banking still not widely adopted by brokers: NextGen]
