CEO explains how the platform will give brokers confidence
In response to the challenge of lender turnaround times through the broker channel, Connective recently launched an innovative platform that enables brokers to easily compare the median days taken to reach unconditional approval across all the lenders on its panel. CEO Glenn Lees gave MPA a special tour of the software, revealing its value for brokers both now and into the future.
“Best interests duty imposes obligations on brokers to act in a certain way when they’re looking at product selection,” he said. “The relevant consideration is not just the product itself but your ability to get the loan approved at a time that’s going to work for the customer. The more information we can give brokers to feed into that decision making and information process with their customers, the better off they are.”
It also creates the potential for brokers to provide documented evidence in terms of how long different lenders were taking to reach unconditional approval if they are asked to prove how they met best interest duty regulations further down the track, he said.
“It’s at the broker’s fingertips whenever they need it,” he added. “I think that’s one of the things that over time will prove very valuable and powerful, is you can have the confidence, not just in a recommendation today, but in two or three years’ time, because it’s all there for you.”
By using data that is populated every night, the platform offers an easy to grasp visual representation of how long each lender has been taking to reach unconditional approval. This is measured over seven days a week, not just in business days.
“One of the problems with turnaround times is that every lender reports things in a different way,” he said. “What we have sought to do is report one metric that’s common between all lenders and reported in the same way for all lenders.
“We look at the date and time a loan was stamped as being submitted and we look at the date and time that that loan was unconditionally approved.”
The first page on the platform is the Lender ranking – a list of lenders ranked from quickest to longest in terms of the median days to unconditional approval. The broker can select a date range and then see at a glance how each lender on the panel compares. The table also includes the number of applications approved within this date range.
“The reason we provide the number of applications approved is, the bigger that number, the more confidence you have in the meaningful nature of that first number,” said Lees. “If the lender’s only approved on a handful of loans at that time, you might not rely on the median time as much as a lender who had approved a large number.”
The broker can then click on each lender in the list for an easy-to-digest snapshot of the time taken to approve the fastest 10%, as well as the 25th, 75th and 90th percentile.
Visual cues, such as colour-coding, also make it easy to read which lenders are taking longer than others in terms of median days to approval.
The next page of the report uses simple graphs to compare multiple lenders against another over time on a weekly basis. The broker can select the number of weeks that they want to view at a time.
“This tells you a lot about how a lender’s service might go up and down,” said Lees.
A line graph shows the weekly median time to unconditional approval of each lender selected while a column graph shows the number of loans approved in this same period.
“When you look at some lenders you can see how cashback offers, for example, might clog the system,” he said.
It also allows the broker to gauge the potential for upcoming blow-outs by examining trends in terms of high and low volumes.
The last page of the report enables the broker “to dive down into an individual lender in a lot of detail,” said Lees.
A box and whisker chart gives the broker a good idea of the range of approval times in any particular week. Again, the broker can select the date range and choose from any lender on the panel. A column chart shows the number of applications approved within this same period. This page allows the broker to filter the results according to whether they are first home buyer deals, or refinances versus purchases. The broker can also filter according to state.
“It’s really simple in one sense but we think it’s really powerful,” said Lees. “It allows you to compare apples with apples across lenders without having to decipher what their individual metrics actually mean.”
Lees said, so far, the feedback from Connective brokers had been very positive. When asked if the aggregator was planning to make the tool available to non-Connective brokers as well, Lees said: “We’ve taken expressions of interest, we’ve had a lot of interest and I expect by the end of next week it will be available for non-Connective brokers. We’ll see how it’s used and the uptake for it - so that’s certainly something we’re going to be doing.”
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In terms of the way the tool compared to others in the market, Lees said, “this is really about percentages and about odds.”
“The odds are that I’ve got a simple deal that should flow right through, if I send it here, all other things being equal, the chances of it going through quickly are higher with this lender, whereas the chances of it going through quickly with this lender are lower.
“This gives you a really powerful tool to predict what should happen.”