Despite all the talk about AI-driven and data-driven banking developments, fewer than half of Australia’s “risk leaders” in lending businesses believe their companies are accessing all of the data sources available to them for making credit decisions.

This is among the findings of credit reporting agency Experian’s Risk Radar report, a survey of 150 lending across Asia Pacific, including 54 from Australia, plus interviews with six senior Australian chief risk officers and other risk leaders.

Lenders recognise that they risk losing market share if they are too slow with approvals. Experian found in a consumer survey earlier this year that 75 per cent of Australian loan applicants expect a home loan approval within three days, and half expect one within 24 hours.

Experian’s general manager of decision analytics for Australia and New Zealand, Mathew Demetriou, said: “The key challenge for traditional lenders is to remain competitive through fast approval and onboarding processes, while still meeting regulatory obligations.

The Risk Radar survey found that lenders not investing in data and systems were more cautious in their approach to credit risk as a result.

Improving regulatory compliance, modernising legacy systems and updating credit policies are the current priorities.

Most lenders said they were taking a cautious approach to credit risk, while they invested in technology to better analyse data.

“The complexity and pace of regulatory change in the credit market is putting pressure on lenders to balance the often-competing forces of managing risk and driving revenue, while complying with legislation,” Demetriou says.