New tool to help banks help you – James Vaughan

Australian property market lenders are operating within a new context of tighter regulatory controls and swiftly changing market conditions. The need for a deep and clear understanding of portfolio data has never been higher.   Core Logic’s new home loan analytics tool provides a powerful insight into your investment position but is it beneficial to you and I as much as to the banks?  James Vaughan, GM of banking and finance solutions at Core Logic explains how it works.
Kevin:   Well, with lots of news now about what the banks are doing with tightening restrictions and so on, it’s becoming more important for banks to offer really good tools to their customers, both to build their customer base, but also to hang on to existing customers. I was interested to see, therefore, that CoreLogic have released a new portfolio analytics tool that is going to be a great help for the banks in doing exactly that. To explain the ins and outs of this and the pros and not so much the cons, but the pros, James Vaughan, who is the general manager of banking and finance solutions at CoreLogic joins me. James, thank you for your time.
James:   That’s no problem.
Kevin:   Tell me how the portfolio analytics tool will work, and how the banks will be using it, James.
James:   Well we’re finding with a bit of turmoil in the property market and some restrictions and changes in lending regulation, but our customers being the banks are looking to give some more value to their customers, to make sure that they stay sticky with the bank and give them nice retention services. And we’re finding that a great way to do that is to give them a … give their customers a position of equity in their properties rather than just giving them a big liability and presenting them with a mortgage balance.
Kevin:   Yeah, cause banks are out all the time, aren’t they? To look at their level of customer … informational customer support, so I imagine this is certainly going to help. Does it bring a lot of that information together?
James:   Yeah, I think that’s a good point. Banks are generally pretty good at understanding their customers from a individual and credit perspective, so lots of information about their transactional and behavioural information, but what we’re going is helping them uncover the blind spots from a security perspective and where those securities are located. So I think giving it … You get a real time estimate on how much that property is worth, and some information around the suburb or geography that that property’s located in. And that’s really helpful for customers to know, if they’re looking to move or refinance, or just other valuable piece of information to know about where you live.
Kevin:   I imagine too, selling, buying, moving and renovating clearly influences home loan refinance or bank switching. Any powerful information that the banks can get, I guess, is going to help them; provide a bit of service and hold on to those customers, James.
James:   Yeah, certainly, not just the value of the property but we get indications of when properties are likely to list or when they’re selling or being renovated which are highly correlated with consumers looking at their financial position. You’re rightly saying rates are at historic lows, if you’re now looking to renovate or sell, it might be a time that you want to think about your lender or go talk to a broker; which makes it increasingly important to give some value to those customers in and around those really critical times in their banking relationship.
Kevin:   Yeah, we’re talking about the CoreLogic portfolio analytics tool. I imagine, too, this could actually give the banks a great opportunity to look into a portfolio to help a borrower get more growth? Even highlight some improvement situations as well, James.
James:   Yeah, two sides of the story which are either risking opportunity … In the opportunity side, for some of our customers what we’re doing is also helping banks present what a rental income should look like for a particular property. So for instance, a customer may be … may have an investment property with a bank and may not be getting a rent that’s commensurate with what could be charged for that property. So that’s another opportunity to help that customer even improve their financial position, link to the security information that the bank may not know.
Kevin:   From a consumer’s point of view, how will they know to, will they notice any difference? Or will it just be the level of discussion they have with their bank?
James:   The most sophisticated banks are doing this really nicely through their digital banking tools, so a couple of the major lenders are now presented might in nice apps, or services whereby you can just see that every time you interact with a bank digitally. Others it might be just that they’re a lender or the brokers are talking to them in a different fashion using the information that they have at their disposal.
Kevin:   James, I’d also imagine the market being as dynamic as it is and unfortunately we’re seeing some values falling in certain areas. I’d imagine this would also allow the banks to be a little bit more proactive in maybe talking to their customers about what could be ahead in the future.
James:   Yeah, we’re seeing a lot more of our banking customers look at individual level treatments based on what their security position might look like. So for instance if someone happens to fall into negative equity in their inner geography where lots of properties are being lifted on the market and it looks like the trajectory may continue on that path, it might be a very different discussion to help them find the different alternatives rather than just taking them into possession. Example, it might be better for a customer to sell that house quicker rather than for them to fall further into negative equity, rather than typically making arrangements. But what it’s meaning is banks are getting more adept at treating individuals based on their financial circumstances, much better at a customer level, rather than just applying blanket treatments to everybody.
Kevin:   James, thanks very much for your time. Been talking to James Vaughan who is the general manager of banking and finance solutions at CoreLogic. James, thanks for your time.
James:   No problem, anytime.

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