Lending, Beer, and Data Standards

Standards can help manage complexity - whether it be in lending or beer!

During the golden age of the English alehouse, an Act of British Parliament in 1698 prescribed that ale and beer should be sold in pints or multiples thereof. This application of a standard measure meant that a customer could go into any pub across the country and know that they were getting what they asked for.

In Australian pubs, we’ve confused the situation over the years - depending on your state, a middy, a half pint, a handle, a pot, a schooner, and a ten ounce are all 285 ml of beer (don't get me started on ponys or schmiddys).

The lending industry, as with beer sizes, has also stumbled into unnecessary complexity.

Whilst industry data standards may seem complicated, they can actually be used to reduce complexity overall. Sound counter-intuitive? Let’s take a deeper look.

Choose Your Complexity

Think of it as a road network. A series of flyovers can make an intersection look like an exceedingly complex jumble of spaghetti. However, for the driver, it can deliver a less stressful journey. This choice to add complexity in one way can lower the overall complexity in other ways. Which of these two situations is more complex? And for whom?

Moving from road networks back to lending, consider an end-to-end mortgage orientation process. These generally consist of a combination of best-in-breed components, custom processes, and legacy systems with complicated integrations tying it all together. Add to that an ecosystem of service providers that collectively deliver financial services to consumers and you can see the enormous challenge.

How does LIXI Help?

Rather than a hodge-podge of custom interfaces, having a consistent vocabulary and data model across providers and clients, across products, and across silos within your organisation can reduce overall complexity.

LIXI provides exactly that consistency through our suite of standards that cover the end to end lending process, providing a data dictionary, glossary and data schema. Whilst industry data standards might look more complex than needed for some tasks, the overall reduction in complexity can provide a compelling business case.

Find out more on the LIXI Website or subscribe to LIXI News and Announcements.

This article is an excerpt from a presentation by Dr Shane Rigby (CEO of LIXI Limited) at the Australian Mortgage Innovation Summit in Sydney (28 Feb 2019).