Australia-based ANZ Bank has revealed plans to offer digital mortgages starting in 2023 in a bid to expand its new digital banking platform. ANZ Bank representatives cited by mh.

com. au estimate that fully automated digital home loans will be able to service up to 30% of the Australian mortgage market by 2024. The main advantage of a digital mortgage is that it could be approved in as little as 10 minutes without any human involvement according to ANZ.

The expansion to automated digital home loans comes in the context of an ANZ research publication, which showed that more than a quarter of customers started their home loan applications online. However, almost none of those customers completed their loans digitally because banks used manual processes to assess borrowers. Moving into automated digital home loans could help ANZ’s new digital banking platform, ANZ Plus, to keep up with its technology-based rivals.

At first, ANZ’s product would cater to simpler owner-occupied loans where a customer was refinancing, while digital loans for a wider range of customers such as property investors would be introduced at a later date. In July 2022, Australia-based Westpac Bank has also revealed its plans to become a digital-first bank and transform the products and services offered to its customers. Among upgrades such as new features in the Westpac app, the bank revealed plans to introduce a digital mortgage where customers could gain unconditional approval in as little as ten minutes.

How do digital mortgages work? According to besmartee. com, utilising automated underwriting systems (AUS), lenders can automatically verify employment, assets and the creditworthiness of a borrower. Digital mortgage platforms use conditional approvals that take minutes rather than days to complete.

Certain automated verification features can allow borrowers to upload bank statements or securely authorise access to their financial information from their bank or other financial institutions. Once lenders have this data, VOI and VOE vendors can automatically verify income and employment. The automated system compares the customer’s credit score, debt and other factors to the requirements and guidelines of the loan.

As soon as the computer-generated loan decision is received, lenders can double-check the result and provide the customer with a final decision or offer. By leveraging an automated mortgage underwriting process, lenders can minimise the possibility of fraud, generate loan decisions at a fast rate, extract data more efficiently, flag inconsistencies, and compare customer information against employment databases. .