Westpac is set to launch a digital mortgage process, allowing customers to gain full approval in "as little as" 10 minutes.
In a market update, the bank said the digital mortgage process will be released for customers refinancing home loans in late 2022, before being rolled out more broadly during 2023.
The process uses third party data sources and advanced analytics for credit checks, finance verification and property valuations.
During the update, Westpac CEO Peter King said the digital mortgage would provide “unconditional approval in as little as 10 minutes”.
King said the key behind its update is a “digital-first approach - eliminating manual processes and putting customers more in control.”
“It can take customers days to apply for a mortgage with manual processes, handoffs, and the frequent need for new information," he said.
“We've now applied our digital-first approach to redesign our core mortgage process and create a fully digital mortgage."
The bank has made “three major changes compared to its current process” as it prioritises a digital-first approach.
First, it gains approval upfront to source information required to complete the application, and this includes the necessary checks and balances to confirm affordability and meet responsible lending obligations.
“We're using advanced analytics and third-party data to also verify financials and property valuations," King said.
Second, the system uses the One Bank platform to provide the credit approval, where conditions are met in minutes, said King
Although "the process is completely digital with no handoffs”, should customers need support, “they can speak to a lender who has access to the same information as they've put into the digital system," King said.
“This technology has been built, it's been tested and we are on track to launch it in the fourth quarter of this financial year," he added.
The services will initially available to select customers refinancing to Westpac’s Flexi First Option home loan via its website or banking app.
King said the digital mortgage will at first be available to only new and existing individual customers refinancing to Westpac and limited to a loan-to-value ratio (LVR) of 80 percent.
He added,“This is also one of the largest sources of activity we have today and certainly refinancing will probably pick up in the future”.
New in-app tools
As well as the digital mortgage, King said, expanding the capabilities of Westpac’s app is also a focus of the bank’s digital efforts.
“Ninety-two (92) percent of transactions are now digital, therefore it’s not surprising that a big part of our strategy is around digital," he said.
The banking app already has more than 200 features,” he said, and the bank is “launching tools that give customers greater visibility and control over their finances and money”.
Personal financial management (PFM), he said, represented a “big capability gap”, but the acquisition of Money Brilliant last year provided a chance to close that gap.
“PFM provides tools and features for customers to organise and control their finances,” he explained.
“Customers will be able to track income and expenses, view accounts from other financial institutions, categorise and analyse expenses and tag transactions for future reviews such for tax purposes.”
Customers will also get the ability to track the carbon footprint of their personal spending, through a partnership with fintech Cogo.