As headlines mount and major BID review looms, Malkin says compliance is a whole-of-industry responsibility
As Australia's mortgage industry grapples with a rising tide of fraud headlines and its first major regulatory test of the Best Interests Duty (BID), AFG's strategic partnership manager Christa Malkin says the industry's response can't be reduced to technology alone – it has to start with culture.
Malkin spoke to MPA at the AFG Now! industry event on Thursday, when she addressed the biggest issues dominating broker compliance conversations right now.
AFG wrapped its national roadshow at the ICC Sydney, which drew hundreds of attendees and over 60 exhibitors. More than 1,500 brokers across five cities attended the national roadshow.
Referral risk starts with the basics
Malkin made it clear that brokers bear the brunt of responsibility when dealing with referrers – and the process begins well before any technology enters the picture.
"It's absolutely about knowing who you're dealing with and never taking, irrespective of the relationship that you have or you think you have, never taking that for granted," she said. "That's ensuring that as a broker, regardless, you do your checks and balances on every single application that comes through the door."
For Malkin, that means receiving documents through secure portals – she cited AFG's FinanceVault, which is part of the BrokerEngine system – rather than via messaging apps or informal channels. "No WhatsApp," she warned. "These are actions that brokers can take to make sure that they're getting the documents in the right way."
Malkin acknowledged that the naked eye can’t always reliably detect anomalies in AI-generated documents, but argued that the real defence lies in asking the right questions. "If something doesn't sound quite right or something doesn't feel quite right, digging deeper on that – that's where the broker responsibility sits," she said.
Her comments come at a time of heightened scrutiny in the broking space amid a home loan fraud scandal estimated to be valued in the multiple billions and the high-profile collapse of sub-aggregator Hai Money.
On the question of whether fraud headlines are casting a shadow of the entire broking industry, Malkin was measured. "The vast majority of brokers are doing the right thing, providing excellent customer outcomes, asking the right questions, having the right processes, having the systems in place. It's a whole-of-industry responsibility. It's not just aggregators. It's lenders, it's aggregators, it's brokers, it's the regulators."
For Malkin, the conversation around broker compliance standards is an opportunity for the industry to be open and proactive, rather than defensive.
AFG's own approach to staying ahead of AI-assisted fraud involves a technology layer, but she was emphatic that systems alone won't solve the problem.
"You can have the best technology in the world, but if you don't have the right cultural and governance approach and the right ways of handling these matters, you're still going to run into a problem," she said.
BID review: documentation is the message
The Australian Securities and Investments Commission (ASIC)'s first review into the Best Interests Duty (BID) since it came into force in 2021 began in mid-2025, when the regulator issued targeted information requests to several large aggregation groups.
The review is assessing whether brokers’ processes, documentation and compliance systems adequately support consumer protection across regulated credit.
The findings are still pending, but Malkin offered a direct message to brokers: BID is working, but documentation is where many will be tested.
One of her concerns is that applications not anchored to the lowest available rate risk raising red flags with ASIC's foot soldiers, regardless of the merits behind the recommendation.
Of course, BID was never designed to be a rate-comparison exercise, and “there are so many other things that drive the recommendation”. Policy fit, serviceability, and customer preference all shape what makes a product genuinely suitable, but it’s a matter of accurately documenting client decision making.
While Malkin believes the regulators broadly understand this, the industry needs to keep reinforcing the fact as the first formal BID review approaches its conclusion.
Is this simply piling further administrative burden on brokers who are already swamped with increasingly onerous compliance obligations? Not necessarily. "They're already doing it, so it's not a further burden. It's been part of the legislation from the get go and it's certainly been what we've educated brokers to do and to continue to do,” said Malkin.
ACL holders and sub-aggregators under the microscope
Malkin also addressed growing lender scrutiny of brokers operating under their own Australian Credit Licences (ACLs).
The Hai Money collapse shone a light over sub-aggregation agreements between ACL holders and aggregators, although Malkin stressed that sub-aggregators are subject to the same responsible-lending obligations as anyone else in an aggregation network.
Malkin also flagged that lenders are becoming more selective with commercial accreditation, given the different risk profile of non-coding commercial deals.
"From a major lender perspective, there is more focus on ensuring that you have experienced commercial brokers in your network," she said – though she noted that AFG's commercial pathways and support team provide a route for brokers looking to diversify into the space.
