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LIXI Industry Forum 2009
Co-operation & Integration: Mortgages for the Future
The third annual LIXI Forum was held on 9th September at the Westin Hotel in Sydney where industry leaders discussed current challenges and LIXI’s role in improving the manufacture and delivery of mortgages in Australia.
The event was well attended with representatives from across the entire industry, including lenders, valuers, conveyancers, broker groups, mortgage insurers and IT providers.
Innovation was a key theme throughout the day. The event kicked off with a provocative presentation live from London by Dr James Gardner, Head of Innovation, Lloyds Bank. Click here to view his blog observations on banking and innovation.
From a LIXI perspective this presentation highlighted a key point for members to think about - LIXI standards are not, in themselves, an innovation, but they can, and do, reduce the costs of innovating. As the way of doing business, LIXI standards enable participants to innovate and to create competitive advantage.
Broadening LIXI standards across the mortgage supply chain
One of LIXI’s key objectives is to extend the benefits of standards further into the mortgage supply chain so that potential cost efficiencies across the industry are fully achieved.
The first panel discussion focused on ways in which industry players can co-operate and integrate while still achieving competitive advantages. The major lenders are all aware that cooperating on LIXI standards does not detract from the fierce nature of their competition
A presentation by Adrian Macleod, CEO of NextGen provided a practical example of how this could work with document sharing. Adrian announced that NextGen has developed a new data transaction standard which will provide the ability for parties to share documents in a standard way. This is being contributed to LIXI and will be made available to the entire industry NextGen will be sponsoring an Evening Series on the document sharing standard in October, LIXI members will receive an invitation shortly.
Document sharing is highly relevant for LIXI members and seen as the solution to many transaction issues facing our industry. For example, the reliance on faxing for communication between brokers and lenders and lenders and mortgage insurers would be removed by the use of document sharing functionality.
LIXI is highly supportive of accelerated standards development processes such as this workflow API and we look forward to working with all our members at an Evening Series event later in the year to discuss more details on implementation aspects of document sharing.
Delivering on the Quality Promise
John McDonald, General Manager of Finance and Technology at Aussie chaired the next panel discussion, which addressed how current and future standards could improve broker and lender mortgage origination quality and service. This discussion highlighted the issues that come with having lender specific variations of the LIXI standards. We often hear this referred to as the flavours of LIXI & it is generally recognised that these variations have a negative impact on quality and reduce the available efficiencies from implementing LIXI standards. There is a unique opportunity with the projects currently underway to resolve these discrepancies. by implementing a 'true' common LIXI standard while supporting version updates and lender-specific translations.
Jason Millett, General Manager Strategy, Execution & CIO Product and Operations at Westpac provided attendees with insights into the importance of mortgages in cross selling other products to customers and how Westpac is achieving this through a customer centric approach.
From a LIXI perspective, this highlighted the importance of common data standards and their applicability to other products. We recognise there is a lot of common data across the various financial products customers hold and we are keen to understand member’s requirements in using this data and where standards can assist. If you have any views on this issue, please contact ceo@lixi.org.au.
LIXI Survey on Settlements
Building on the research conducted in 2008 on the costs of mortgage origination and benefits of standards, LIXI engaged Brand Management once more to research the financial impacts of settlement and settlement standardisation. Tony Crossley from Brand Management provided a summary of the results. If you are interested in the results of this survey, click here.
The overall results of the survey indicate that potential cost savings of up to $46 million per year are available to the industry if a national electronic conveyancing system was fully operational. The Australian published an article on this research after the Forum. Click here to see this article.
Lessons for LIXI from the eHealth and eInsurance markets
Tim Hibberd, Head of Collaborative Service Networks Research & Development, Smart Services CRC provided the audience with a thought-provoking session on how smart networks enable true standardization. http://www.smartservicescrc.com.au
The eHealth and eInsurance markets have clearly identified a need to have individual companies choose their own timelines for upgrading versions while still enabling communication compatibility. Smart network architecture allows sequential / sequencing of versions which enables the implementation of "true" standardisation. This is an important issue that LIXI members will need to address over the next few years.
This is important because we are now in an environment where standards in one form or another are widely used, but can be seen as locking the participants into a particular way of doing business, which is completely at odds with the ideas presented by James Gardner in the morning session. LIXI members have every right to expect that improved standards will form a component of innovation.
These linked issues – increasing standardisation and multiple version support – are critical to increasing the flexibility and growth of the LIXI standards, and they require leadership from our most experienced and our most forward thinking members.
The working part of the day finished with a blue sky panel discussion that addressed a range of issues facing LIXI over the next 3 years as it looks to drive further innovation in LIXI standards and efficiency benefits for all members. This session reiterated that LIXI standards are the foundation of cost and operational efficiency for the industry and are not themselves the innovation.
Networking and Community Building
Finally, an important part of the LIXI Forum is the opportunity for members to network with other members and industry participants. As a community we have a common goal of driving our industry towards greater electronic integration. It is through events like the LIXI Forum that we can all contribute to this goal.
Many thanks to all our speakers, and to
Gold event sponsor NextGen.Net;
Event sponsors Sandstone, Perpetual and LTX;
and thanks to all who attended to make the event such a success.
We look forward to seeing you at the next LIXI event.
Click here to see the speaker presentations from the day
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2009 LIXI update
LIXI CEO Erik Fenna also provided attendees with an update on LIXI activities since he commenced in the full time CEO role 12 months ago. Some highlights:
LIXI has been strengthening and broadening relationships with strategic and operational management at the major lenders to ensure that the benefits of straight-through processing are given fair consideration when lenders are working on internal and external development projects, with the aim of extending LIXI standards farther across the industry.
This is particularly important given all of the major lenders are currently undertaking core platform re-development projects, and the standards development effort being put into the settlement process via the national electronic conveyancing system.
LIXI made a submission to the federal government in response to the draft National Consumer Credit Protection legislation and we are also in discussions with Treasury regarding their Standard Business Reporting project. LIXI’s view is that the way consumer information (i.e. loan application data) is gathered and the way information is provided back to consumers (i.e. credit advice) should be standardized to make interpretation of the data more accurate and efficient. This does not apply to how the information is used for credit and risk assessment, which is of course lender specific. Click here to view LIXI’s submission to the draft legislation.
Considerable effort has also been spent this year on enhancing the LIXI Methodology to get better outcomes from our standards process. This methodology involves the collaborative contributions of the working groups, it more accurately captures the corporate knowledge, and it ensures that the underlying business reasons related to standardisation form the foundation of the standards themselves. In support of the Methodology we are currently compiling the natural-language definitions of terms to accompany both the data standards and the supporting documentation, which will make future specification and development more consistent.
On the standardisation and development front LIXI is also making headway. In addition to the electronic conveyancing transactions work LIXI is completing for NECS, there has been significant interest over the past couple of months in relation to valuations, applications, and backchannel status messaging. A fair amount of the discussion has been around how best to attach documents within the transaction standards. This is why LIXI is excited about the opportunities provided by the NextGen announcement regarding the development of the shared document workspace. Acceleration of the standards development process in an area where our members are requesting support is a fantastic outcome for all members.
One of the most visible areas of change recently is the new LIXI website, an initiative responding to the need to make member and licensee information, and the standards themselves, much more accessible.
Among other things the new website references some tantalizing ideas that other people have regarding change, innovation, and the use of standards. This is the section "What are people saying about standards?" on the home page. If you find something interesting and want to share your discovery, please feel free to send it to ceo@lixi.org.au. We welcome your input.
Electronic Conveyancing Now and in the Future
The settlement survey results provided the platform for further presentations and a panel discussion regarding electronic conveyancing and its importance within the industry to generate further cost and operational efficiencies. There is a considerable amount of effort being put into making electronic conveyancing a reality, both by LIXI and the broader industry and jurisdiction participants.
The first NECS related session was an update from Simon Libbis, Executive Director of NECO http://www.necs.gov.au on e-conveyancing progress and the commitment to formalising the national e-conveyancing body. Mike Abel, General Manager of Mortgage Product and Strategy from Perpetual then presented his views on the incremental steps that can be taken by all industry players to be prepared for e-conveyancing. As an example, LIXI is working in parallel on standards development to enable land title searches to be implemented sooner, while ensuring that the solutions remain compatible with the overall national electronic settlements project. LIXI sees no reason why seamless integration of title search could not be implemented by mid 2010 - other than the same legislative and contractual issues in some states which need to be resolved for NECS regardless. The working group discussion forum is Here, to join please email admin@lixi.org.au, all members are welcome.
The NECS panel discussion highlighted the fact that industry has specific requirements in relation to the e-conveyancing standards, particularly as they relate to takeup, and that industry’s fundamental need from the standards will require a visible ROI [ROI is available - $45 million dollars worth per year] in order to get implementation projects approved. It was noted that industry expectations on ROI may have a shorter time window than the land titles offices or other Project sponsors, which may lead to additional industry requirements for the electronic conveyancing data standards.
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LIXI welcomes sponsors for all events. These events are attended by an audience with a specific interest in the presentations and hence they are the perfect forum to reach with a targeted marketing message.
Promotional opportunities of various kinds are available, please contact marketing@lixi.org.au to get further details.
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