A global bank has partnered up with a fintech business to launch digital mortgage applications in New Zealand.
HSBC, which operates around the world but has a small presence in New Zealand, approached Australian fintech Sandstone Technology two years ago and last month went live using its technology.
Martine Milicich, HSBC's New Zealand country head of retail banking and wealth management said it was timed to coincide with its latest mortgage campaign.
"It was one of those moments where you say we have tested this, we have piloted this, we have got lots of applications through, now let's put it under a bit of stress."
Milicich says the response has been good so far although the bank won't give figures on how many applications are going through online versus the old-fashioned paper route.
"It's a little hard to answer. At the moment we have gone live with people who are purchasing a property in their own names but a lot of people purchase using either a family trust or a company and that is not going live until the end of the year.
"At the moment any stats would be quite distorted."
Milicich says people are coming in direct via its website and or are being asked if they want to use the online application process when they call the contact centre.
"We are finding quite a few people going through that way." Applicants upload all of their paperwork to a secure portal and can also download information from the bank.
A relationship manager then checks the process and asks for more information which can be completed within a day if both sides file information quickly.
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At the moment not all of the process can be done online. New customers still have to be sighted by an HSBC employee as part of anti-money laundering legislation to prove who they are.
But in the future existing customers may be able to top-up their mortgage without leaving home, Milicich said.
Milicich said although HSBC had similar in-house systems in other markets the size of its presence here meant it would have been too expensive to bring them to New Zealand.
So it decided to partner with Sandstone.
"It removes the risk. They show you the system and you can say I want to buy that. If you were to create it in-house then have to work out the detail of what you want and then I have got this massive risk of can I deliver it?"
"And so for a small player who has those limited constraints to actually be able to say I know what I am getting and personalise it to my brand. Is a big thing for us. It is risk, time and cost."
It is not the first time she has worked with the company. In her prior role at SBS Bank Milicich worked with Sandstone to bring in digital applications for deposits.
TSB also uses the Australian technology company which has been around for more than 20 years.
Liam Crehan, general manager of lending solution at Sandstone Technology, said mortgage applications was quite a complicated process to digitise with one of its clients having 300 steps.
"And that would not be unusual."
"When you implement a system like this it touches every part of the bank. It's more of a transformation project rather than just bringing in a new system."
Crehan said the uploaded data was stored using Amazon Web Services data centres on a private network on the cloud dedicated to the particular bank.
It ran intrusion detection software to monitor the platform 24 hours a day as well as antivirus software.
Crehan said banks were embracing digital mortgages with gusto and they were a good way to enable smaller banks to be a level playing field with large banks.