Veda partners with MOGO to bring real-time income checks to financial institutions

Sydney, Australia: 16 April 2015 – Financial institutions in Australia are preparing to move away from manual handling of income and expense checks using a new automated tool that will speed up the loan application process and reduce paperwork.

MOGObankconnect is a simple, secure and effective verification solution for financial institutions. Veda, the leading provider of credit information and analysis in Australia and New Zealand, has partnered exclusively with MOGO to bring this income and expenditure tool to the Australian market.

A natural extension of Veda’s services, MOGObankconnect bolsters Veda’s ability to deliver credit histories and identification checks with income and expense data, providing financial institutions with a clearer picture of an applicant’s financial circumstances and facilitating better real time lending decisions.

Currently, the process of inquiring into and gaining an understanding of customers’ income and expenditure can be time-consuming, costly and often unreliable, which has created ongoing headaches for lenders.  

This solution will provide lenders with an automated and streamlined mechanism to help mitigate the increased pressure on financial institutions to comply with responsible lending obligations, such as income and expense checking.

While more mature financial markets such as the US and UK have taken advantage of automated income and expense checking for some time, Australia has lagged behind, with only the small amount lending segment embracing this technology to date. Along with changes to comprehensive credit reporting in Australia, whereby more information is available on individual’s credit behaviour to make accurate lending decisions, electronic verified income and expense information adds another strong indicator for financial institutions.

“The partnership between Veda and MOGO will be a win-win for financial institutions and consumers,” said Tommy Mermelshtayn, Veda’s New Markets & Strategy Manager.

“From a lender’s perspective MOGObankconnect offers a secure, swift verification process that reduces fraud and cuts out manual handling costs. For consumers it means enhanced customer experience, quicker outcomes and improved security with the knowledge their personal details won’t be passed on to a third party.

“The solution has been well-tested in international markets and stands up to the scrutiny of privacy and technological due diligence,” Mr Mermelshtayn said. 

The need to access and verify this data leads to slow customer on-boarding if done through manual processes. Financial institutions may also leave themselves vulnerable to fraud if potential customers tamper with their supporting documentation such as pay slips or paper banks statements.

“For the loan applicant, they will benefit from a streamlined application process, a reduction in tedious paperwork and faster turnaround in loan appprovals, which will improve the user experience,” he explained.

The National Consumer Credit Protection Act 2009 (Cth) requires a credit provider to take reasonable steps to verify a consumer’s financial situation. According to ASIC’s Regulatory Guide 209  this involves obtaining information about the consumer’s actual income, expenses and other circumstances that are likely to affect their ability to meet the financial obligations. Verification of  expenses including items such as rent, repayments, insurance premiums, loans and discretionary expenses like entertainment or alcohol, will become increasingly important under the NCCP. The use of only modelled income and expense benchmarks will no longer be acceptable.

The MOGObankconnect application captures information including the account holder name, address, account number and BSB and 90 days worth of transaction histories as well as noting the balance on all active accounts with that financial institution. The information is encrypted at the source and delivered securely, and does not require the customer to reveal their passwords or other secure data with anyone but their bank.

While the solution is customer-driven it is not customer controlled. In order to combat tampering, the consumer cannot view or edit their results. MOGObankconnect is delivered to lenders on a software as a service basis. It can either be integrated into an online application process or offered via an online dashboard suitable for call centres or as a bridge to the integrated solution.