Big four banks tighten risk controls as fears mount over mortgage fraud
Australia’s biggest banks have quietly been restricting access to referrer programs and investing in fraud detection as risks rise.
Australia’s big four banks have quietly been tightening up their risk controls and referral programs as their networks of accountants, lawyers, real estate agents and financial planners come under increasing regulatory scrutiny.
Capital Brief can reveal that Westpac removed the only two aggregators in its program in August last year as it looked to mitigate risks associated with the long-standing but controversial programs, and insulate itself from fraud uncovered at its RAMS subsidiary.
Aggregators act as an intermediary between the bank and eligible industry groups — like a national real estate franchise group — funnelling referrals from its networks to the bank and clipping the ticket on any resulting commissions.
While it was seen as advantageous for the bank to reach more referrers, and by extension more direct borrowers, the opaque and disintermediated arrangement came to exceed Westpac’s risk appetite, and it ended the arrangements as a result.
