Tony Carn (NextGen.Net) on Open Banking

Tony Carn

Chief Customer Officer, NextGen.Net

Tony Carn

“Those who embrace CDR and evolve their
processes will be the ones who survive.”

NextGen.Net is Australia’s leading technology provider to the lending industry. With 97% of all Australian mortgage brokers and more than 50 lenders using their ApplyOnline electronic lodgement and loan processing platform, NextGen.Net makes it their business to know what’s next when it comes to technology.

That’s one of the reasons they invested in Frollo. After acquiring Frollo in July 2020, NextGen.Net is integrating Frollo’s complementary technology to strengthen its existing solutions to improve lending experiences using Open Banking data.

Why we wanted to talk to Tony

Tony Carn has developed NextGen.Net’s customer experience framework for the past nine years. Overseeing all customer touchpoints – from engagement through to solutions, satisfaction and service delivery.

He speaks to brokers, aggregators and lenders every day about improving the lending experience, and CDR is going to play a crucial role in this.

NextGen.Net made a big strategic acquisition in Open Banking earlier this year with Frollo. Why is Open Banking so important for NextGen.Net?

Our mission is to make lending easy by providing state-of-the art solutions to the lending industry. We currently process between 65 to 70 per cent of all mortgages in Australia and provide electronic processing solutions to over 50 lenders. With an established and mature SaaS model, we embrace the concept of ‘configure, don’t customise’ so have a modular delivery and that provides economies of scale in terms of delivery and training.

The introduction of Open Banking is a pivotal event for Australia’s mortgage industry. Mortgages are large and complex transactions. To put things in context in September 2020 alone we saw 120,000 loan applications were lodged with estimated at $63 billion in value. That averages around $525,000 per transaction. When we look at the typical cost to process an application in the industry that adds up to being more than $300 million per month, but 35 per cent of those applications don’t convert.

Open Banking introduces significant opportunities to remove friction from the application process, reduce the reliance on supporting documents, lessen the burden on resources required to assess customer data and radically accelerate the approval process.

NextGen.Net recognised the opportunity that Frollo’s Open Banking technology presented early on because it allows us to use CDR to deliver on that opportunity to improve the loan application process. That opportunity has a lot of dividends to pay for borrowers, (whether it’s a loan writer or a broker) but particularly lenders and shareholders.

What excites you most about the Open Banking opportunity in lending?

Our mission is to provide lenders, aggregators and brokers with an easier and more efficient way to deliver value to their customers throughout the loan approval process.

Open Banking is really the next step in how we will continue to pioneer state-of-the-art solutions – from loan application through to processing and settlement

Open Banking also presents a new way for how customers can be sourced and nurtured through their life cycle.

It’s not just the one moment in time, (such as getting a home loan), but the opportunities to get customers ‘fit-for-finance’ before they apply for a loan and then helping them manage their finances after the loan is settled.

What do you see as the biggest challenge to make CDR a success?

Awareness of CDR is an issue. Consumer awareness is still pretty low, but we have to bear in mind that legislation only came into effect on 1 July 2020.

The other challenge is not around the technology but the challenge that comes with change. We can expect to see the ‘survival of the fittest’ impact. Those who embrace and evolve their processes and achieve the greatest efficiencies will be the ones who survive.

What do you expect the impact of CDR will be in Australia in the next 12-24 months?

I don’t think CDR is going to become embedded in the lending industry overnight, but we’re seeing a number of lenders starting to invest in the evolution of Open Banking in terms of their own approval processes now.

I predict a number of lenders will emerge as real leaders in the space over the next 12 to 24 months, particularly as consumer awareness starts to grow and lenders start to see the benefits of faster turnaround times, more compliant and reliable data and reduced acquisition costs.

What advice would you give organisations, particularly brokers or aggregators, that are thinking about using Open Banking data to compete?

Looking at the survey results, although individual brokers are not as aware it’s a different story amongst aggregators. They are very agile and are facilitating the framework for individual brokers and their businesses to thrive.

The impact of CDR is going to be ‘Darwinian’ in nature, so it’s a matter of adapt or die. Today 99.9% of all mortgages are completed and lodged digitally, but 15 years ago all those applications were faxed. We look back now and think how did we ever do it that way?

Open Banking is going to impact us in exactly the same way, so it’s a matter of evolving by embracing change.

This interview with Tony Carn was originally published in ‘The state of Open Banking in Australia (2020)‘: a comprehensive report on the state, challenges and opportunities for Open Banking in Australia, based on an industry survey and interviews with leaders in the space.

Learn more about how Frollo can help your business compete using Open Banking data.

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Frollo is a purpose-driven Australian FinTech on a quest to help people feel good about money. We’ve built the simplest way to help people get their finances on track – and through our business ecosystem, we’re supporting our enterprise clients to do the same for their customers.

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