Digitisation of the Property Transaction Ecosystem. Enter

Transcription

1 Digitisation of the Property Transaction Ecosystem Enter

2 Contents

3 In 2008 the government launched their National Seamless Economy initiative which aimed to improve production and efficiencies to achieve a strong, consistent approach in business - including for the property market. Digitisation was a key tool employed to achieve this. Since then we ve seen a decided shift in the way property is transacted as the industry joins the growing global movement towards digitisation. This effort to streamline the property transaction has had varying degrees of success due to what we ve identified as three key challenges: Behavioral Challenge: The leap of faith and change management required to transition to new systems and new ways of working in a digital environment. Four Party Challenge: E-settlement can only work if all parties are on board. Generating true value to property transactions through industry-wide change requires the bulk of the industry accept digitisation and adopt new technology. Real World Networks: The property transaction is a very emotional and humanistic process particularly for the buyer and seller. Digital advancement must support human connections, not replace them. From electronic Verification of Identity (VOI) through to digital signatures, electronic contracts and electronic settlements, these attempts at digitisation have impacted only the final settlement stage of the process. If all the groundwork has been done properly, this should be the simplest part of the property transaction yet it is the groundwork though, undertaken by conveyancing professionals juggling red tape and sourcing information from multiple parties with client hand-holding that carries the most margin for error. Home buyers and sellers are the most important participants in the transaction. SAI Global believes that if we simplify the end-to-end transaction through smart utilisation of new technologies to reduce administration time we can pave the way for conveyancing professionals to focus on what s really important; supporting their clients through an incredibly stressful process. Four of SAI Global Property Experts share their views on how digitisation has impacted the industry to date, where it s at now and what needs to happen next.

4 Forces shaping the digitisation of the property ecosystem REAL ESTATE AGENT SOLICITOR / CONVEYANCER INCOMING BANK MORTGAGE BROKER SAI GLOBAL SOLICITOR / CONVEYANCER VENDOR FOR SALE OUTGOING BANK SOLD PURCHASER The Property Ecosystem

5 Simplifying the end-to-end property transaction through smart utilisation of new technologies helps conveyancing professionals to focus on what s most important: supporting their clients

6 Industry transformation requires new technologies and new ways of working to improve the customer outcome Benjamin Balk, General Manager Product and Marketing, SAI Global Property Division

7 We deliberately use the word transformation rather than disruption when we look at digitisation and technology s ability to reshape how industries operate. Disruption implies a seismic shift in business model and industry structure, whereas transformation implies taking a more methodical and planned approach to reach a beneficial and improved end state. A transformation approach embraces the individual value of industry participants and takes them on the journey of change, rather than displacing or marginalising them. With electronic Verification of Identity (VOI), digital signatures, electronic documents and electronic settlements, property industry disruption has already begun. What I believe now to be the real question is how. How will the industry work with transformation partners to harness the power of these new technologies and ways of working to truly transform the industry in a more methodical way? It s only through this that we will reach a better outcome for all participants in the property transaction process, most importantly the customer. Just as Uber and Airbnb have dramatically changed the face of their old industries by offering practical and simplified, customer-friendly alternatives, to enact positive change for the industry s customers, we need to harness the currently emerging disrupting technologies to better and more logically transform the property transaction. Customer side, the transaction process is complex to navigate for the vast majority of buyers who must play the role of pseudo project managers in an industry they have no real experience in, and where their stakes couldn t be higher. From solicitors and conveyancers to real estate agents, banks and financial institutions to buyers and sellers, the prime motivator for each player in the property transaction is vastly different. Enacting change to transform this complex process to the betterment of the customer requires one of the influential participants to take the role as a central lever point to impact change across the entire life-cycle of the transaction. To date, it is really only the banks with their bid to nationalise the system and the Australian Registrars National Electronic Conveyancing (ARNECC) with their bid to standardise the transaction that have made any attempt at this, but neither of these parties have gone to the heart of transforming the property transaction. True nationalisation of these state-based complex processes provides an opportunity for information and solution providers such as SAI Global to simplify the complexity of the current environment, and help the industry undertake transformation toward a more standardised national process right across the property transaction. We all know there is a better way. To do this effectively, the best interests of customers must be considered as the industry works together to transform the current process. With conveyancing and legal professionals sitting at the centre of the property ecosystem mitigating purchaser risk and assisting customers navigate the process, it is these participants who are best positioned to play the role of central lever and enable transformation for the betterment of all participants in the process.

8 Benjamin Balk General Manager Product and Marketing, SAI Global Property Division Benjamin oversees the product and information solutions strategy for SAI Global Property Solutions, which includes overseeing the technology based information product offerings provided to conveyancing professionals. Constantly looking for innovative solutions to solve problems, Benjamin s mission is to help conveyancers and solicitors and the banking and finance sector to improve industry engagement and efficiency for the benefit of all those involved in property transactions. How will the industry work with transformation partners to harness the power of these new technologies and ways of working to truly transform the industry in a more methodical way?

9 Why should the industry support conveyancing professionals to help home buyers? Amanda Baker, Head of Industry Development, SAI Global Property Division

10 Just as a mid-wife s a lifeline for those navigating the stressful journey to parenthood for the first time, a conveyancing professional provides a vital lifeline for buyers and sellers navigating the property purchase or sale journey. For many people this process will be an incredibly stressful, once-in-a-lifetime event; one they re largely unprepared for, in the dark on and totally reliant on the services and hand-holding provided by their conveyancing professional. Adding to the stress and uncertainty, most people don t have a regular conveyancer or family lawyer and must take a further leap of faith by relying on the recommendations of local mortgage brokers, real estate agents or other industry players that might be motivated by quite different factors to their own needs. Between making the decision to buy and the actual settlement where the front door key is handed over, a conveyancing professional must collate and report on a vast amount of information from a broad number of sources using time-consuming communication tools from s, phone calls and even the postal service. If all goes well, the settlement process is potentially one of the simplest parts of the broader transaction yet to date, it is only this part that the industry that has been considered for digitisation and automation. This hasn t solved the real issue of addressing the largely manual activities prior to settlement where the majority of stress, productivity waste and margin of error lies. Focus on this pre-settlement process is particularly important given that errors during this phase are the primary contributor to settlements falling over. A lot of effort and resources have gone into achieving e-settlement but despite this, the process, and the regulations remain largely untested under scale. Willing early adopters who wanted to use the service from the beginning have been largely unable to do so due to it requiring the bulk of the market, and all parties in each transaction to also be using it. By way of example, excited by the opportunity of electronic settlement one of SAI Global s progressive Victorian clients jumped on board straight away and trained all their staff. This busy firm which processes literally hundreds of settlements each year still hadn t completed one transaction electronically 12 months after launch. Adding to what we see as a market reluctance to jump on board straight away with electronic settlements, Australia has no solid reference point internationally to compare this process to. The process was largely abandoned in England, Canada s system is up and running but only comes into play once the financial side has occurred and whilst New Zealand have introduced it, their system excludes bank involvement and, by way of their size, doesn t face the complexity involved navigating eight individual land registries and state revenue offices practices. Many a conveyancing professional can attest to the emotional and financial cost of a failed settlement; instead of getting the keys to their new home, purchasers are left checking into a hotel while the removal truck unloads their belongings into a storage locker while the conveyancing professional rushes to find a solution. Given the seriousness of the implications of getting it wrong we believe more can, and must be done to improve the entire transactional ecosystem, improving the quality of the feeder information and simplifying the process to ensure the right outcome happens the first time every time. Any additional support the conveyancing professional has will result in a better outcome for the everyday consumer who is making the massive financial investment. One that ultimately underpins the whole of the Australian economy.

11 Amanda Baker Head of Industry Development, SAI Global Property Division Amanda s role as Head of Industry Development sees her work closely with government, industry bodies, banking and conveyancing professionals giving her unique insight into the broader conveyancing ecosystem and how each element impacts the businesses of our conveyancing professionals and banking clients and their end customers. A self-confessed electronic conveyancing nerd with 25 years experience across lending, business development and operational roles, Amanda has spent the past 5 years closely associated with the progress of the national government initiative. More must be done to improve the transactional ecosystem and simplify the process to ensure the right outcome happens first time, every time

12 Finding simplicity in a complex world Gina Assimakis, GM National Operations, SAI Global Property Division

13 To ensure property transaction digitisation is truly transformational, the focus must be on reducing the operating risk for all industry players, reducing financial and fraud risk, improving the customer experience and increasing transparency. We see digital transformation as a conciliation tool with the potential to bring industry and participants closer together. With property the largest asset class in Australia and the customer experience often highly emotive, every improvement made to simplify the process, reduce risk and productivity waste is both positive and meaningful. Digital transformation also offers an opportunity for conveyancing professionals to strengthen their role within the property transaction process while also improving the service they re able to provide through enhanced efficiencies and communications. Successful transformation on a national level will also require government taking a firm hand to ensure consistent levels of protection are afforded to buyers and sellers of properties. As an industry all major participants owe it to buyers to implement standard disclosure obligations on the seller ensuring we re never in a position of operating through buyer beware. While federal and state governments have already taken the lead on this through the signing of the Inter-Governmental Agreement in 2008 for the implementation of National Electronic Conveyancing, and the formation of ARNECC, what hasn t been addressed are issues such as harmonisation of Real Estate Acts, conveyancing licence legislation, and legal industry national accreditation of participants. This leaves the industry in the position of still having a statebased process to begin with. For Electronic Conveyancing to reap the rewards it initially seemed to promise, we need to take a singular, national approach in which all stakeholders understand their roles and how they collectively need to work to achieve a common Australian-wide goal. Australia s Personal Property Securities Register (PPSR) project is an excellent example of how this has worked in action. Stakeholders across multiple industries Australian-wide came together and achieved establishment of a National Register through consolidation of a huge number of databases into one. We believe it is imperative for governing bodies like ARNECC to play a major role in helping the industry to standardise, modernise, and support de-risking the property transaction process.

14 Gina Assimakis GM National Operations, SAI Global Property Division Previously our organisational development manager, Gina is responsible for the end-to-end mortgage and settlement process at SAI Global focusing on improving the existing service delivery, leadership growth within state operational sites and meeting the challenges of electronic settlements. Digital transformation can help simplify the process, reduce risk and productivity waste, and help conveyancing professionals to strengthen their role and their ability to provide customer service

15 Why digitisation and do home buyers really care? Ann Wootton, Director Property, SAI Global Property Division

16 The country may be facing the biggest housing affordability crisis in history but it has still not impacted the great Australian dream of owning a home. It means that home ownership is simply not possible without the assistance of a bank. The banks play a really important part in the property transaction ecosystem as they hold 80 percent of the home loan volume but ultimately the property buyers and sellers will control the property transaction. While our increasingly consumer-centric lives have been transformed with more transparent, convenient and userfriendly experiences, the property transaction remains relatively antiquated and highly complicated. The consumer s need for information transparency and understanding of the property transaction process can t be ignored. Technology and digitisation has enabled us to track our taxi drivers journey to pick us up the precise status of our pizza order yet for all the progress towards electronic settlements, it still hasn t smoothed the process or alleviated customer stress in the property transaction. Throughout the transaction, customers are in the dark on what they need to do, the status of the process and whether there are any inaccuracies that could contribute to settlement failure, impacting whether they actually get the keys to their new home and move in on the scheduled day. The industry must work to transform the ecosystem into the kind of user-friendly, cost-effective experience consumers are used to having in other areas of their lives using the technology they have in their back pockets. Transformation, from our own experience, is an outcome of innovation, the sum of a lot of small, continuous improvements that utilise technology when buying and selling a property. It also needs to add value to the customer experience in a measurable way and therefore add to your business brand. If it doesn t meet this definition then it isn t transformative, it s just shifting sands. Customers should demand transparency and easy-to-understand information during the property transaction to ensure they re empowered to make more educated and informed decisions. Technology will become more useful and less customised as regulatory changes continue and will enable a lot more transformation of business processes. Let s not forget that only three years ago the only legal tender for buying a property was a bank cheque!

17 Ann Wootton Director Property, SAI Global Property Division Ann has worked with clients globally, including many Fortune 500 companies as well as major Australian corporations and financial institutions and heads up SAI Global s Property division. Prior to SAI s property business, she was President and GM of SAI Global s Americas Compliance division and GM of the APAC Compliance division. The industry must work to transform the ecosystem into the kind of user-friendly experience consumers are used to having in other areas of their lives using the technology they have in their back pockets

18 About SAI Global

19 About SAI Global About SAI Global Property At SAI Global, we make Intelligent Risk possible by helping organisations proactively manage risk to achieve business excellence, growth, sustainability and ultimately, create trust. Our integrated risk management solutions are a combination of world-class tech platforms, services and advisory capabilities that operate across the entire lifecycle allowing businesses to focus on opportunities presented by uncertainty. Together, these tools and knowledge enable customers to develop a holistic, integrated view of risk. In Australia, we are also a leading provider of settlement related services; company, personal and property information. SAI Global Property, a division of SAI Global, supports a range of Australian industries with information and data services and business process outsourcing services that enable our customers to operate their businesses more efficiently and with less operational and financial risk. SAI Global Limited s head office is located in Sydney, Australia. We employ more than 2,000 people across 29 countries and 51 locations across Europe, the Middle East, Africa, the Americas, Asia and the Pacific.