Electronic conveyancing to boost efficiencies

The banking industry can expect to achieve annual savings of around A$44 million a year as a result of efficiencies delivered by electronic conveyancing, as well as improved customer satisfaction and other intangible benefits.

The electronic property conveyancing exchange PEXA yesterday released a report commissioned from PricewaterhouseCoopers detailing the economic impact of the service.

The system has been designed to handle property title transfers, refinancing, discharges and caveats on a digital platform.

Twenty-two financial institutions have subscribed to PEXA and another 20 are in the pipeline, according to the company.

About 1500 practitioners (conveyancers and solicitors) are active or in the process of joining. They account for about 30 per cent of active practitioners, according to PEXA.

Around 26,000 property transactions have been completed through PEXA. Most of these are refinancings, involving one or two banks and no practitioners.

This has prompted comment that the system is not meeting its objective in digitising property title transfers.

PEXA chief executive Marcus Price said: "Refinancing is important. It is about 40 per cent of total transaction volume.

"We only started with practitioners in January. We will see a significant ramp-up in transfers in the second half of the year."

PwC said financial institutions using PEXA would be able to reduce their costs by a total of $83 million a year ($44 million net after PEXA fees and other costs) when the system is fully operational.

Price said these were the direct costs savings but financial institutions would also enjoy intangible benefits such as improved customer satisfaction and fewer compliance issues.

PwC surveyed consumers and found that the high rate of delayed settlements (about 20 per cent) which is a feature of the paper-based system, is stressful and costly. It said the benefit for the banks in having a more efficient system, in terms of improved customer satisfaction, would be considerable.

Price said PEXA had developed an application, which would be distributed by practitioners and financial institutions, that would allow consumers to track the progress of their settlements.

Overall, PwC said electronic conveyancing would deliver productivity benefits in terms of savings for financial institutions, government and consumers equivalent to 0.017 per cent of GDP.