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Increased Opportunities for Small Software Developers as Home Lending Industry Gets Set to Speak Same Language Small software developers can expect to earn a share of the $300 million mortgage lending industry with the introduction of e-commerce standards to the Australian industry. The standards were devised by LIXI (Lending Industry XML Initiative), a not for profit, independent industry organisation. Membership of the organisation has been drawn from industry stakeholders including Westpac, ANZ, CBA/Colonial, Adelaide Bank, Perpetual Smartline, ING, Allette Systems, PMI Mortgage Insurance Ltd, Pioneer Mortgage Services, Mortgage Choice, Loanmart, Finance Analysis Services of Australia, Homeside and Lending Technology Services. The initiative aims to establish platform independent open standards for the format and exchange of lending-related data. This will replace the numerous incompatible approaches that currently exist and enable the industry to become more involved in e-commerce than ever before. LIXI developed a computer language known as CAL (credit application language), that will allow the data required for home loan applications to be standardised and therefore transferable between lending institutions. Currently, each lender has different data elements associated with the application process. "Banks, mortgage brokers and other industry stakeholders will need the tools to manage the XML data as the standards are adopted across the industry," says LIXI convenor and IT Developer, Barry Thomas. "The standards will open up an entirely new market for smaller software developers as financial institutions seek new ways to implement CAL," he says. "Huge software and hardware suppliers, such as IBM and Microsoft have always dominated the finance industry as banks were dependant on complex systems that only a major supplier could support. The use of a standard interchange language will make it practical to distribute business logic into smaller, more manageable packages."
"Smaller companies can use CAL to integrate with bank back offices and create products that address very specific problems such as property valuations or documentation drafting. Now there will be more competition than ever before," says Mr. Thomas. According to Mr. Thomas, the standards have wide-reaching benefits
for both financial institutions and their customers. "Consistency of data will speed up loan approvals by as much as 50 per cent," he says. "Companies that don't adopt the standards may face losing business
as their customers seek speedy loan approval elsewhere." "In our business, it is necessary for mortgage lenders to be able to send applicant information to us so we can approve insurance. Because the data gathered by lenders differs across the industry, we need to build tailored solutions for each lender partnership that we have. Setting up e-commerce links for our lenders is unnecessarily high for both of us," he says. "However, with a widely accepted standard in place, we should expect to see these costs lowered by as much as 75 per cent for each lender partnership negotiated." "The LIXI standards will give a consistent meaning to all shared
data as well as providing a platform for the efficient and rapid development
of eBusiness links within the lending industry."
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