Verification by video a broker cure

Westpac and ING have become the first Australian banks to verify the identity of new customers using digital video technology.

As the COVID-19 crisis continues to undermine the traditional method of verifying a loan applicant's identity in a face-to-face setting, the two banks yesterday announced the launch of separate online verification protocols for broker partners.

ING will accept loan applications from brokers on behalf of clients so long as a recorded video meeting confirms copies of identification documents submitted by the home buyer.

Under the ING protocol the loan applicant is required to show on screen the original documents, copies of which are already in the possession of the broker.

It is the broker's responsibility to ensure also that the loan applicant's appearance on screen bears a likeness to photo identification documents.

The bank reserves the right to request face-to-face verification where there is any uncertainty as to an applicant's identification.

Banking Day understands that ING has also begun using remote verification for loan applicants dealing directly with staff of the bank.

Westpac and each of its regional banking subsidiaries also introduced a new online process yesterday.

Under the Westpac process, customers who have no existing relationship with the bank are required to open a Westpac debit Mastercard account and are then given the choice of whether to retain it or close it straight away.

That establishes the customer's identity on Westpac's system and enables the broker to progress the loan application.

Brokers are required to record details of the online video conference with the client and take screenshots of the loan applicant holding a form of photographic ID  and other submitted documents.

The broker then submits copies of the identification documents and the screenshots to Westpac in a PDF format.

Banks have been developing online verification systems over the last two years but might have baulked at opportunities to introduce them earlier given regulatory concerns around responsible lending and mortgage fraud.