The Australian Competition and Consumer Commission has issued a directive to the nation’s financial institutions, demanding an urgent overhaul of due diligence processes following a massive mortgage fraud scandal.
Reports suggest billions of dollars in loans were secured using fraudulent and doctored documentation, prompting major lenders like the Commonwealth Bank of Australia (ASX:CBA) to raise the alarm.
As the financial crimes watchdog AUSTRAC assesses the extent of the rot, the industry is grappling with the rising threat of AI-generated synthetic documents used by crime syndicates to launder international funds into the Australian property market.
In a bid to bolster the integrity of lending decisions, the Australian Banking Association and several industry bodies have lobbied Treasurer Jim Chalmers to grant access to Australian Taxation Office data via the consumer data right.
The "open banking" regime would allow lenders to bypass easily manipulated PDFs and verify income directly against a "central point of truth".
ACCC Commissioner Ian Oppermann has urged banks to embrace the existing CDR framework immediately, regardless of whether ATO data is currently integrated.
By accessing real-time transaction history with customer consent, banks can mitigate the risk of "middleman" interference.
While Westpac (ASX:WBC) has utilised digital mortgages for three years, take-up remains inconsistent across the sector.
Despite the $1.5 billion invested in the regime, legislative hurdles regarding the Taxation Administration Act 1953 continue to stall the direct sharing of tax data, leaving the sector vulnerable to increasingly sophisticated digital forgery.