Pilot - Prior Day Readiness cut off

[AngellaC]

Hi Community,

Right across Australia, the number of property settlements have skyrocketed, with WA leading the charge with a 67.8% year-on-year change in March 2021. These increased volumes translate to higher pressure on people and processes to complete settlements in a timely manner – leading to added stress and frustration.

Our purpose is to transform the property experience for everyone, and we are open to ideas and feedback on how we can help alleviate some of the stress in the process. To do this, we are in the process of establishing Member Advisory Councils in each state (WA being the first to be set up). The council is made up of representative members across the settlement industry to help provide us input on how we can all work together to improve the process.

One pain point highlighted by high volume member firms and the banks is the amount of settlements booked for a day that do not end up settling – which results in unnecessary work for all parties involved. One example cited was a major bank having 1,475 settlements booked on the last day of April 2021, and fewer than 1,000 actually settled on the day.

CS Legal is keen to explore options to alleviate some of this stress on the day of settlement for their team and the other parties in the Workspace, similar to the approach taken by the Department of Communities. CS Legal have proactively approached the banks and PEXA to determine what can be done now – without the need to make any changes in the platform (which may take some time).

The idea is to run a limited, controlled, Practitioner initiated pilot, that is supported by a number of banks. In this pilot, all Workspaces identified will be monitored closely by us and the banks to determine the success of the initiative. The pilot will help us ascertain if this approach has the potential to help all parties, and if so, how we could facilitate any changes in the platform to bring about more certainty in your settlements.

We will continue to work with all our members as we seek to enhance your settlement experience and welcome your feedback.

Thanks

Angella 

[AngellaC]

Further to the post above, we are currently working with parties who have volunteered to be involved in the Practitioner led initiative.

Together, we are defining the parameters of the pilot, to ensure that we can effectively monitor the results of this initiative.

This will provide insights to how we can potentially shape the process to provide more certainty, consistency, and a better overall experience to your online settlements.

Parameters of the pilot:

Parties involved:

• Banks: ANZ, NAB, CBA, Bankwest, Westpac and St George
• Practitioners: CS Legal, KDD Conveyancing, Debbie Crawford Conveyancing and Refreshing Settlements 

Process:

Each Practitioner participant will:

• At 3pm each day, select and review all workspaces due to settle the next business day, where the above mentioned banks are a party to the workspace
• Assess each workspace against the following criteria:

1. Settlement Date and Time Accepted by all Parties
2. All required Documents created
3. Stamping has been completed
4. TFRS uploaded or if new Enhanced Settlement Summary is active, Purchaser’s Line Items are completed, and if Bank is providing Shortfall, the “Ready for Shortfall” indicator set.

• If these 4 Tasks listed above have not been completed, the Practitioner may move the Settlement by 1 business day, including the ‘Reason for Change’ as “WA Pilot for Settlement Cut-Off”.  

• The application of the cut-off is ultimately at the Practitioner participant’s discretion. Exclusions may be applied to Settlements where the end buyer/seller will be negatively impacted financially (e.g. 3 day grace period, rebates potentially under threat), or potentially for settlements on the first business day of the month due to stamping processes.
• Please discuss any circumstances that might impact your ability to meet the criteria above with the applicable practitioner participant (noted above), in advance of the 3pm day prior review.

The pilot will run from Monday 17 May 2021 to Friday 4 June 2021. We will then review the impact of the initiative and subsequently, the best way forward for all WA settlement industry participants.

[Morri]

With the increasing volume of PEXA transactions we continue to review our processes to ensure we can meet demand.

We are investing in technology to increase the efficiency of some tasks, including accepting invitations and entering payout figures to workspaces, the benefits of which will begin to flow through in the coming weeks.

As we have done over the last 12 months, we also continue to invest in our people, mobilising additional resources including bringing on more team members.

These improvements are aimed at being ready earlier by having the settlement date/time accepted and the documents created at least the day prior to settlement, which aligns to some of the key items spoken about above.

We are focussed on working with the industry to deliver what matters to customers – confirmed settlement at the time they request.

Regards

David Morrissey

Chief Product Owner

CBA Retail Home Lending Operations

[nakatos]

At NAB we are committed to improving customer experience. In an environment of increased and fluctuating volumes, we have several initiatives in progress, including automation, process improvements and technology changes. 

Approximately 30% of settlements roll over from day to day as a result of one or more participants not being ready in the workspace. This new pilot will provide certainty for customers where all participants are ready and will set realistic expectations for instances where some participants aren’t ready.

We all know there is a recipe for success with regards to settlement certainty and we encourage all participants to commit to the following steps to ensure that we drive up the number of settlements that settle on the right day, at the right time:

• Encourage customers to submit their loan application well in advance of their settlement date to allow the bank sufficient time to assess the application and provide unconditional approval
• Encourage customers to return their loan offer documents well in advance of settlement date to allow the bank sufficient time to verify the documents and complete the required PEXA activities
• Ensure all activities in the workspace are completed on time with particular focus on the below for banks:
  • Send a PEXA invite at least 10 days prior to settlement
  • Prepare the Transfer of Land as early as possible in the workspace
  • Update the Total Funds Required to Settle or ESS ready for shortfall at least 2 days prior to settlement

Our goal is to ensure our customer’s settle on the right day at the right time. Working with others in the industry on a pilot like this is key to improving our customers settlement experience.

Regards

Nicole Akatos

Product Owner

NAB - Lending Services

[stephec0]

ANZ is really pleased to be participating in this trial as we firmly believe that improving the settlement experience for our mutual customers requires openness and collaboration between financial institutions, practitioners and PEXA.

We are encouraged by the results so far and look forward to doing our part to deliver on our shared goal to improve settled on time results to provide customers with the property settlement experience that they deserve.

Regards

Corey Stephens

ANZ - Digital Settlements Lead

[Sarah_Jewell]

At Westpac we are clearly supportive of a safe, simple and efficient experience for all our customers, practitioners and employees and we are driven to help improve the property transfer industry overall.  Our collective goal is to make settlement a smooth transaction for all involved.  We have embraced this pilot to help identify opportunities to streamline the process and provide a seamless experience in the lead up to settlement for all involved.

To further support this move to a better experience for all involved in the process, we are committing to several additional initiatives to improve our digital settlement experience with automation, regular reviews of PEXA transfer guideline reporting, and improving communication with our lenders.  This will enable an earlier return of critical loan documentation to provide an optimal settlement service for our customers. 

[AngellaC]

Per previous post, PEXA has been facilitating an industry-led pilot to look for ways to improve the online settlement experience for all. Now that the pilot is officially over, we thank the parties involved in the pilot for their feedback. We will use the findings from the pilot to determine how PEXA can be involved in providing more certainty and structure to the online settlement process.

Why run the pilot:

• PEXA was designed with flexibility in mind and as such allows for parties to complete tasks and finalise Workspaces on the day of settlement. With current market volumes, this is creating anxiety and stress for all parties involved in the online settlement process
• Our common industry goal is to improve the experience for all parties, and the end buyers and sellers of Australian property by providing more certainty as to the settlement timing
• This pilot was initiated by industry participants with a view to reduce the day of settlement stress and provide more certainty and structure to the online settlement experience

Initial feedback from pilot participants:

• This way of working provided more certainty and structure to the practitioner offices
• Very little negative feedback from clients
• Clear and early communication with clients is key – setting appropriate expectations
• Also clear communication with the other conveyancer on the deal was beneficial, especially for handling exception cases
• PEXA data shows that there was an overall improvement in the on time settlement metrics for the firms involved
• Bank feedback highlighted the reduction in unnecessary effort on workspaces due that day that then did not settle, allowing them to concentrate efforts on workspaces that all parties, most importantly customers, were expecting to settle

Next Steps:

• PEXA is pleased with the positive feedback from this industry led pilot, confirming that parties are benefitting from more structure within the process
• We will continue to look for ways to enhance the PEXA platform to assist in providing more structure and certainty to the online settlement process
• Any updates to the system will be discussed with industry prior to implementation to ensure the proposed changes work for all parties
• We would welcome any feedback you have in regards to how the PEXA platform can assist all parties in improving the overall settlement experience

Please note that some of the parties involved in the pilot, for example CS Legal, may continue to work on this basis of reviewing the Workspace the day prior and moving out settlement dates if required, as part of their ongoing BAU processes.

Thanks

Angella