Banks feeling the pinch with big approval delays: how digital onboarding and banking automation can relieve the pressure
In the first half of 2021, Australians have experienced a major bottleneck in loan application approvals. Lenders continue to struggle as a hot residential property market fuels consumer demand, and as businesses seek to finance a strong recovery post COVID.
Among the reasons cited for the delays, there is one constant – a reliance on manual processing of assessments and approval processes. Digital onboarding and banking automation present a clear way forward.
Mixed messages in the media
In April 2021, the big four banks in Australia announced they had drastically reduced time spent decision making. They were now achieving turnaround times of two days or less for simple mortgages.
Yet, according to ongoing press coverage, the time taken to reach conditional approval has blown out.
By early May, Westpac customers were still experiencing long delays in securing home loan approvals. The bank was said to be grappling with a “40 per cent surge in applications in the first quarter of 2021”, compounded by the closure of an offshore processing facility in 2020.
Later in May, ANZ said that its processing times for home loan applications had, on average, more than doubled over the previous month.
Meanwhile, delays in approval of business loans were described as a failure of credit for Australian businesses in the throes of post-COVID recovery.
The root of the problem
No-one anticipated the heightened demand in Australia’s property market in 2021. As Sandstone Technology’s Chief Customer Officer, Ross Watts explains, “Even three to four months ago we couldn’t have seen this coming.”
“Some bank’s resources have been doubly stretched after having redistributed resources from their home loan processing to support customers in financial hardship.”
But the root of the problem is the absence of automated banking solutions. “Much of the pain being experienced by lenders at the moment is because of manual processes within their application flows,” Watts says.
Mortgage and Finance Association of Australia CEO Mike Felton recent commented that there was an opportunity for improved processes between brokers and banks in Australia. He highlighted that turnaround issues were inconveniencing customers and extending the home loan application process. In turn creating stress for the customer, broker and banking staff.
Felton’s comments highlight a massive opportunity to automate every facet of the home lending process, particularly the onboarding and application process through to offer stage.
“As we move towards an environment where third-party written home loans become the norm, the opportunity for banking automation is huge,” Watts says.
To read Sandstone Technology’s full article Banks feeling the pinch with big approval delays: how digital onboarding and banking automation can relieve the pressure please visit: www.sandstone.com.au/en-au/article/how-digital-onboarding-and_banking_automation