Australia's biggest residential lender, Commonwealth Bank, holds close to a fifth of all Australian mortgages, or around $171 billion of receivables.Reducing the average unit price of residential valuations, in common with many other costs, is thus a key goal. In the case of valuations the objective is to lower cost, without a perceived increase in risk. James Sheffield, general manager mortgage wealth at Commonwealth Bank, does not use the AVM definition as a complement to the bank's existing valuation technique, preferring to use 'decision trees' as a tool to decide valuation types based on information provided to the risk assessment process."AVMs have more modelling behind them where I would explain ours as more of a decision tree, that takes in external data to match the decision tree against the level of risk."We are seeing increasing use of data for our valuation decision, and matching that against customer risk."Sheffield defines customer risk as how well they are known to the bank, with valuation risk concerns reduced for well known borrowers who have been meeting their financial commitments for a long period of time."Based on the quality of (customer) risk, if they have had a loan for twenty years and paid it off every week, we are not going to be so worried what the valuation is because we will know that they will pay."To increase information about customer risk and therefore help the decision tree allocate the most cost effective valuation without increasing valuation risk, credit scores and post code location are added, along with information from Australian Property Monitors and RP Data."We have tightened our due diligence around customer risk, which we are constantly monitoring on a post code level."Because of the system we have, we can change weekly issue defaults to flag a postcode that should always have a full valuation."We have become more sophisticated in our credit risk to make sure that the valuation model is responding, and push towards a full valuation when there is more risk attached."Sheffield agrees data fed into models is not always accurate."That's exactly the reason why you wouldn't just rely on a data source, and we don't just rely on APM data and RP Data, but we have our own internal loans database and use credit risk scoring on customer behaviour."Due to the size of our loan book, we don't want to rely on one supplier only."Despite the fact that we have increased the database based decisions we have been making, we have also done more short form valuations with valuers on the ground in the last 12 months than we have ever done before."Commonwealth will look to further improve and refine the bank's internal valuation process, not necessarily making it technology driven but using more database analysis on customers and properties, but this will not replace full valuations."There will always be a role for sending a properly qualified valuer who understands the local market to go and look at a property, and there are always times when we are not too