BAF was founded by innovation company Lakeba Group and former Mortgage & Finance Association of Australia (MFAA) president Tim Brown.
Explaining how BAF works, Lakeba CEO Giuseppe Porcelli said, “What BAF does is simply allow any bank to verify in real time that specific documents like pay slips or tax returns have been issued by the right source and with the numbers presented by the borrower.
“Imagine the scenario where I walk into a bank, I have my pay slip or my tax return. Today, the only chance that banks have to validate my pay slips is cross data or giving a call to the employer, asking if this person is one of the employees on their payroll. We know that is not substantial.”
BAF has recently finished its pilot scheme at an unnamed ‘major bank’. But the group hopes to roll the technology out to all of the banks across Australia in the future.
The pilot saw them use 100,000 existing pay slips and more than 1000 historical car and home loans, with 100% of validation proved.
Brown acts as general manager of BAF and recently joined Lakeba as head of financial services.
He said that fraud is most common in the mortgage sector because of the requirements around income and expenses, but that brokers might not necessarily know they are involved in passing on fraudulent documents to the banks.
Brown added, “The ability to confirm the client’s ability to repay is the one that’s obviously come out in the royal banking commission, that there hasn’t been enough work done in this space via the banks and the brokers.
“From the industry perspective there’s lack of trust now within the industry: broker to bank, customer to broker, customer to bank, so hopefully through this requirement of verification that it has not been played with or doctored, it will give confidence back to the industry that they can rely on the information that’s been presented to them.
“The other thing it will do is give confidence, if it’s in the block chain and it’s come from overseas, the banks might start lending to overseas borrowers again, this is as you know the issue for overseas borrowers, we couldn’t verify income. And so therefore you could see a turnaround in the bank’s lending policy as they start to feel comfortable with the source, that they would start lending to those borrowers.”
Porcelli said using the technology will be a benefit to everybody, not just the lenders.
He added, “I’m a believer that it’s the time now to use the technology for trust. In terms of using the technology to make sure we’re dealing every day with the right information.
“The world is moving very fast. We need to make sure that our decision makers can make the right decisions for our business. From the bank perspective specifically, what happens when a bank loses money? That reflects on the dividend and that reflects on the interest being charged to the people, and all these other aspects. So if you fix the issue at the bottom, then you have a large 360 degrees benefit for everyone. That is my view.”