Regchain’s ‘Stryd’ app is unlocking the power of the Consumer Data Right for mortgage brokers and borrowers by turning Product Reference Data into a home loan financing tool
A detailed report on home loan Product Reference Data (PRD), which is provided by banks in accordance with their data holder obligations under the Consumer Data Right (CDR), has delivered a mixed scorecard for data quality.
The analysis has been published by Regchain, a Perth-based fintech, in a white paper called “Democratising Data for the Good of Consumers: Unlocking the potential of better quality Product Reference Data.” It has reviewed 1600 individual home loan products offered by 86 bank brands.
Australia’s open banking regime requires banks to make PRD publicly available via an open API call. This information includes interest rates, fees and charges, and the eligibility criteria for banking products like mortgages.
PRD is a critical enabler of CDR’s goals of supporting consumer choice and promoting competition.
“Approximately 69 per cent of Australian mortgage holders are not on the best interest rate, and for mortgage brokers to find them a better deal, they need real-time visibility on what deals are out there in the market,” said Ruth Hatherley, Founder & CEO of Regchain.
Regchain leverages this open banking data for its Stryd Product Repository, a real-time product and pricing database used by mortgage brokers to find borrowers the best interest rate in the market, thereby helping to make home ownership more affordable.
“Only nine brands – that's about 10 per cent - are providing consistently ‘very high’ quality product reference data across all the residential mortgage products we reviewed from 86 bank brands,” said Ms Hatherley.
Those nine names are: Australian Unity Bank, BankWest, CommBank, ING Bank, Macquarie Bank, ME Bank, Northern Inland Credit Union, St George Bank and ubank.
Regchain’s white paper categorises PRD quality as ‘very high’ if the data provided by the bank is usable for all products as disclosed, without requiring any work-around.
A ‘high’ rating is given to an additional 15 (17%) banks, as their data is usable for all products as disclosed, with some remediation required by Regchain due to slight, non-prohibitive quality issues.
A further 18 banks (21%) are rated ‘good’ or ‘average,’ leaving 44 (51%) in the sub-standard categories of ‘low,’ ‘poor’ and ‘very poor.’
“To power our Stryd app and ensure the best data, we address data quality issues with business rules, cross-referencing to publicly available information on websites and manual reviews,” said Ms Hatherley.
“The good news is that product reference data quality is getting better because it’s an enforcement priority for the ACCC. We are working closely with them to let them know on a weekly basis what we’re seeing at the coal face with respect to incorrect interest rates, missing data and the misuse of free text fields when there is a relevant structured field,” she added.
This follows the ACCC’s finding in April 2023 that there are ‘significant shortcomings’ in the quality of PRD which is hampering product comparison and therefore limiting consumer choice.
Regchain’s white paper found 768 home loan products have data quality problems and additionally reveals issues with incorrect loan purpose, missing LVR or loan amount, product names, and duplication.
Rehan D’Almeida, CEO of FinTech Australia, said: “CDR's purpose is to improve consumer choice, convenience and confidence. The Regchain Stryd tool is a great example of a fintech app that is using open banking to make a positive impact on the finance industry and consumers. By supporting mortgage brokers to help borrowers save money on their mortgage, it's playing a part in tackling Australia's housing affordability crisis."
Mr D’Almeida continued, saying: “One key step in realising CDR’s full potential is improving the quality of product reference data, and there are positive signs of progress on this from the banks. This ensures consumers can make clear comparisons and choose what is genuinely right for them.”
Stryd also permits lenders to monitor the market competitiveness of their mortgage products. The tool can be used by both banks and non-banks to see how their home loan products stack up against the bank market for pricing and other features.
For banks, this presents both a risk and a benefit. On the one hand, banks may lose customers who can now switch more easily, but on the other hand, banks can also use PRD to monitor the market and save hours of internal time and effort by leveraging open banking technology.
The white paper is available to download here: https://www.regchain.com.au/promotional/democratising-data-download
About Regchain
Regchain is an open banking-enabled fintech platform designed for home loan lenders and mortgage brokers.
Its flagship “Stryd” product enables faster identification of new growth potential through trusted risk and loan data services, utilising a unique, holistic approach to storing and categorising mortgage data in a “Home Loan Repository.” It works seamlessly with existing technology stacks.
Regchain enables improved lending risk assessment and pricing for responsible loan book growth.
The platform also empowers organisations to meet fast-changing regulatory compliance requirements, such as Target Market Determination under ASIC’s Product Design & Distribution Obligations (RG 274).
More information: Please visit www.regchain.com.au or email info@regchain.com.au to learn more.
