Evolution Without Compromise: Building Trust While Accelerating Your Lending Decisions

The competitive landscape for consumer lending is being relentlessly redefined by speed. Customers today expect a seamless, near-instant experience - the issuing of loan documents in as little as 90 seconds is no longer a futuristic concept but an operational necessity. This drive for speed presents a critical challenge for lenders: How can you move at this accelerated pace without compromising the rigour of responsible lending, risk management, and compliance?

The answer requires both an evolution of internal practices and a shift in mindset - recognising that today’s technological innovation can automate complex tasks while simultaneously improving your ability to manage operational and regulatory risk. 

In this article, we use income verification to demonstrate how technology has evolved to the point of instantly interpreting raw income data according to a lender’s specific underwriting rules.

Custom underwriting at scale

How variable pay, like bonuses, overtime, allowances, or income from multiple jobs, is assessed in consumer lending is unique to your risk appetite and lending criteria. However when changes are required – such as updating how variable income is assessed – implementing these modifications swiftly can be challenging due to resource limitations, closed sprint cycles, and other priorities.  

What truly accelerates straight-through-processing is the ability to quickly define how an applicant’s data is interpreted. By defining your unique underwriting rules and applying them at the point of data verification, you ensure that the employment income data you receive is pre-interpreted to your specific criteria, significantly enhancing and accelerating the process within your loan origination platform. Such examples include:

• Annualising income based on regular and irregular pay 

• Identifying income continuity and gaps 

• Consolidating income from multiple employments

• Consistency of bonuses, overtime and other variable incomes

• Defining how income components (such as base salary compared to variable pay like bonuses) are grouped and interpreted.

Tailoring data interpretation to your specific rules and logic transforms raw, complex data into instantly usable attributes, significantly increasing the portion of data you can confidently use for decision-making. For example, a major non-bank partner increased the amount of employment income data they could confidently use in credit assessments by 23%, moving from 7.3% to 30.2% by slightly tweaking their rules. This approach also streamlines operations by eliminating the need for third-party platforms to interpret your data.

“A major non-bank partner increased the amount of employment income data they could confidently use in credit assessments by 23%, moving from 7.3% to 30.2%.” 

The assurance of direct source data

Automation is only as effective as the data it processes. When moving at speed, you cannot afford to compromise on the data source. The highest confidence in any lending decision comes when the data underpinning it originates from a trusted, verified source. 

Integrating the direct-source data model from Equifax Verification Exchange up-front in a lender’s application platform removes the need to rely on collected payslips and manual documents. Instead, applicants provide consent for their lender to access employment income information directly from the exchange, which is home to up-to-date payroll data from contributing employers and payroll providers. 

Verification Exchange provides a single, accurate source of truth for identifying and verifying an individual’s employment status and income, even across multiple employers. It also automatically validates key attributes like tenure and employment status, which confirms stability and builds the confidence required for straight-through-processing. 

The speed UX connection

The evolution of your internal processes directly translates into a superior experience for your customer. Automating verification with trusted direct-source data is paramount to reducing friction and fueling growth in your direct channel applications.

The traditional manual process - chasing payslips, waiting days for an assessor review - is a significant friction point that can lead to customer dissatisfaction and drop-off. Embedding instant, digital verification into your application workflow can help you achieve:

• Faster time to unconditional approval: Automated verification can contribute to loan documents being ready in minutes, drastically reducing the total Time-to-Yes. AMP Bank’s decision to embed Verification Exchange directly into their new lodgement platform for brokers has helped them improve their time to decision for PAYG applications.  In just 3 months, AMP Bank has increased those applications that are approved at first touch by 60%. <link this content to the AMP case study when published>

• Increased direct channel applications: Speed and an enhanced customer experience drive consumers to your most efficient channels. A frictionless, rapid process encourages applicants to complete their application directly, improving your acquisition efficiency.

• Reduced cost-per-loan: The maximised throughput of digital verification, and the ability for credit teams to focus on complex, high-touch applications reduces your operational labour costs and drives significant efficiency. 

Supporting compliance through standardisation

“In your pursuit of a faster Time-to-Yes, the ultimate goal must be the Time-to-Right - accurate and responsible lending decisions.”

In your pursuit of a faster Time-to-Yes, the ultimate goal must be the Time-to-Right - accurate and responsible lending decisions. The inherent standardisation that comes with automated verification is crucial to achieving this.

This consistency helps protect your organisation by reinforcing responsible lending practices and providing a clear, defensible audit trail for regulators. For example, the information Verification Exchange delivers to lenders provides a far more consistent and structured format than manually reviewed payslips. You gain comprehensive visibility, including income data for up to the last twelve months and gross annual income for up to the past three years. 

This detailed data includes income breakdowns (such as commissions and overtime) and key employment details (hire date, employment type and status), even consolidating income from multiple employers when available. 

Partnering for your evolution

Achieving evolution without compromise demands lenders be vigilant and rigorous in their choice of digital solutions. The confidence to trust a system for full automation comes from thoroughly interrogating its outputs and partnering with experts who understand the critical intersection of data integrity, technology, and regulatory compliance.

The market demands speed, but that speed must be built on the foundation of verified, reliable information. By embracing innovative solutions like Verification Exchange, which delivers direct-source verified data instantly and interprets it according to your specific, configurable rules, you are not just evolving your processes - you are building trust while accelerating your lending decisions.

Book in for a Free Demo of 4 x Award Winner, Verification Exchange and its innovative Client Rules Engine