EXECUTIVE SUMMARY COMPANY BACKGROUND Aussie Home Loans was founded by John Symond in 1992 and launched on the 16th of February. John founded the business on the back of a $10,000 loan from a relative. From the beginning Aussie Home Loans has endeavoured to improve the existing loan environment and as a result has changed the way most banks do business today. Since its initial launch as a Home Loan provider Aussie has expanded to include a national mortgage broking service, Home Insurance (where Aussie acts as referrer for CGU Insurance Limited) and in more recent times has joined forces with ANZ to provide customers with a low rate Aussie MasterCard. Aussie is a totally Australian owned company currently servicing 220,000 customers and has a loan portfolio in excess of $20 billion. Until recently Aussie was an independently owned company, however this changed at the end of August when in was announced that the Commonwealth Bank of Australia would buy a 33 percent interest in the company. The company will still be run by John Symond who recently swapped his chief executive role for the chairman's position in order to focus on developing new business instead of operational matters. Aussie Home Loans operations currently span all mainland capital cities and major regional centres across the country, with a team of more than 1,000 staff and mortgage advisers nationwide. Aussie Home Loans prides itself on customer service and as a result offers its customers the opportunity to utilise its Mobile Mortgager Advisers, who are available 24 hours, 7 days a week. This service has proved quite valuable for Aussie with up to 10,000 borrowers per month being visited by the Aussie Mortgage Advisers PURPOSE AND OBJECTIVES OF THE COMPANY Aussie Home Loan endeavors to make the dream of home-ownership more accessible for all Australians, including true interest rate competition, consultations by experts in your own home at no upfront cost to you, and the same rates for investors and owneroccupiers. Aussie Home Loans believe in constantly finding better ways to do finance. This is made evident by the fact they deliver home loan solutions not just from Aussie, but from major banks and other lenders too, giving customers real choice and expert help. Aussie also attempt to make the home or investment purchase even less complex by working in conjunction with CGU, to give clients access to competitive home insurance options. Aussie strives to deliver to its clients the confidence that comes from being in a stronger financial position. PRIMARY ACTIVITIES OF THE COMPANY Aussie Home Loans specialise in providing their customers with: Home Loans that are financed directly through Aussie Home Loans A Mortgage Brokerage Service, allowing borrowers the opportunity to choose from a range of loans offered by various Home Loan Lenders across Australia. A variety of Car and Personal Loans Credit Cards that offer a very competitive interest rate Home insurance MODEL OF THE COMPANIES PRIMARY ACTIVITIES CUSTOMERS Mortgage Advisors/Brokers Clients/Borrowers Third Party Lenders Eventual Institution that Awards Loan Insurance Companies PRODUCTS Ability to find a home loan that matches the clients needs Detailed list of loans suitable and available to client BUSINESS PROCESS MAJOR PROCESSES OR STEPS BASIC APPROACH Determine borrowers required loan amount Use a database the brokers/ Collect personal Details lenders can access directly Determine borrowers best loan match Complete application process Issue the loan or pass on the application to the relevant third party lender PARTICIPANTS Home & Personal loan borrowers Investors Mortgage Brokers Third Party Lenders INFORMATION Term of Loan Deposit Available Required amount to be Borrowed Favoured banks/Lenders Current Assets Current employment and earning details TECHNOLOGY Central computer System Uniquely designed objective computer program, known as Mortgage Express Telecommunications Mortgage Calculators CONCERNS OF THE MAJOR STAKEHOLDERS John Symond – As the Chairman of the Company John’s main concerns as a stakeholder would be how the company is performing and whether or not he can see any opportunities for the company to expand and create a greater profit for the shareholders. He would also be concerned with making sure the company satisfies the expectations of the other major stakeholders in the company. Mortgage Brokers (Staff) – As employees of the company the main concerns for the mortgage brokers and sales staff would be that the company is turning over adequate profit and securing enough cliental in order for them to keep their jobs. Borrowers/Customers/Society – Major concerns for the borrowers and those in society is determining if they are getting a good deal from the company and ascertaining whether or not the company is functioning in a moral and just way. Reserve Bank of Australia (RBA) – Being responsible for the stability of the Australian financial system and setting monetary policy, the RBA’s main concern as a stakeholder would making sure that Aussie had in place appropriate home loan interest rates adequate for the economy. Commonwealth Bank – As a minority shareholder in Aussie Home Loans the Commonwealth Bank’s major concerns would be that Aussie Home Loans are utilising all its processes to the best of its ability and thus making as much profit as possible to get the maximum return on their investment. Australian Securities Exchange (ASX) – The ASX contributes to Company regulation through its Business and Listing Rules. The Business Rules regulate how trading takes place on the ASX by overseeing the operations behavior of participating entities. The Listing Rules ‘watch’ over companies listed on the ASX and help ensure that the companies are providing adequate disclosures to various stakeholders and are behaving appropriately. Thus the ASX’s major concern is that Aussie Home Loans uphold the Business and Listing Rules. Privacy Commission – Major concerns for the Privacy commission include making sure Aussie Home Loans are abiding by current regulations and legislation for collecting and storing customers personal information. They would also be concerned with making sure their regulations are adequate enough. Australian Securities and Investments Commission (ASIC) – As the major Company watchdog in Australia, ASIC is concerned with making sure the company follows all company and financial services laws (such as the Corporations ACT and the ASX Listing Rules). Australian Prudential Regulation Authority (APRA) – The APRA’s major concern is making sure that Aussie, as a financial institution, can honour their commitments. Third Party Banks & Lenders – Other major banks and lenders would be concerned with what interest rates Aussie Home Loans would be offering consumers and thus making sure their deals are competitive within the marketplace. DESCRIPTION OF SYSTEMS HOME, CAR & PERSONAL LOANS Aussie Home Loans gives the customer an opportunity to calculate their loan by themselves and decide on how their loan will operate. The on-line calculator gives the customer the opportunity to create a number of scenarios of how they will repay their loan. It shows ways that will reduce the loan period as well as the overall cost of the loan. The inputs that are required for the information system of getting a loan with Aussie Home Loans include: The lenders the customer does and doesn’t wish to use Amount of loan Interest rate Loan period Credit history Purpose of the loan Loans available from lenders The information system will use these inputs to produce the best possible loan available for the particular customer. The process that is carried out involves the comparison of the different options available along with fitting the client’s preferences and details to the particular loans that will be available to them. While Aussie Home Loans contacting all the different lenders is part of the process, it is actually done physically and not via the Aussie website. The output of this particular information system is Aussie Home Loans providing the loan that best fits the customer. This is given to the customer and Aussie will then contact the lender to apply for the loan. CREDIT CARDS The Aussie Home Loans website allows customers to apply for a credit card online. This is done by following a number of steps for an application. In the application it asks for certain information to assess whether the customer is eligible or not. The inputs into this information system include: Credit history Income Age Employment details These inputs are used to determine whether a person is eligible for a credit card. It also produces the information of how much credit an individual will be allowed. Once the customer has the credit card an account is kept. A computer based system will keep track of all transactions made. These are recorded in the individuals account. A bill is also sent to the client so that they can pay for the purchases they have made with the credit card. HOME INSURANCE The information system that is used for gaining home insurance at Aussie Home Loans provides information on how to set up home insurance with the company CGU. There is a link that takes you to the CGU website. The Aussie Home Insurance information system is linked with the CGU Insurance information system as they work together to provide insurance for the customer. PROCESSES & TASKS When you study the information system of getting a home loan via the Aussie website, you can see that there are a few main processes and tasks that are carried out. The first process is the transferring of information from the customer to the Aussie staff. The transferring of information is where the customer goes through the steps provided by the website give the staff the information they require to find a suitable loan. This is an essential process as without the information it would not be possible to produce a loan that fits the situation. Another process that is supported by the system is the process whereby the information is combined in order to find the best possible loan for the particular customer. The information includes: Size of the loan Interest rate Income Loan period When this information is combined it makes possible to find the loan that will be the cheapest and most effective for the applicant. This process also saves a lot of time as it means that the customer does not have approach every lender in order to compare the different options that are available to them. The main task that is supported by the system of gaining a home loan, via the Aussie website, is the calculating of the loan before any decisions are made. By using the mortgage calculator, it provides the client a greater understanding of the position they will be in due to the different scenarios that are created. By calculating the loan before hand, it will make it easier for users to make a decision on the loans that are made available to them. This also makes it simpler for Aussie staff to find loans that will suit their client as they have a better idea of what they are looking for. ROLES PEOPLE PLAY People play significant roles in the system of applying for a home loan on the Aussie website. The process that is used by the system has to be continuously updated. People have to update the information that is available as it can have major impacts on the decision making process. For example, information about interest rates has to be up to date as it will impact on the overall total of a loan. This could change the decision that the client comes to about which lender they will use. Another example is the different deals that separate lenders are offering. People also play the role of either approving or denying the application for a home loan. The system itself cannot decide on whether or not a person is eligible for a loan. This a major decision, as it can have major impacts on many parties. A person could go bankrupt and then not be able to repay the loan. This would mean Aussie loses money as, well as, the lender. As people play a major role in this system it is important they are managed properly. This is done by having a number of people working together on maintaining the information that is available. By having people working together, it reduces the chance of making errors and makes the information as accurate as possible. The system itself is managed in much the same way as it requires a number of people working together to make sure all information is up to date. DATA & INFORMATION There is a wide range of data and information that is required by the information system of applying for home loan. The most important information is the loan the client wants: Amount Reason Time frame External information is also required by the system. It includes: Interest rates Lenders Availability of loans The procedures that are required by the system include: Assessing the applicants eligibility Comparing the different loans available Getting approval from lenders ACTIVITY DIAGRAM OF GETTING A HOME LOAN USER/CUSTOMER Log onto www.aussie.com.au AUSSIE LENDER Select home loans Choose apply for home loan Fill in the required details Use mortgage calculator to calculate the loan Provide results from calculated loans Apply for a home loan Compare lenders to find best home loan for the customer Provide customer with best loan for their purpose Send application to lender for approval Approve loan Reject Loan Study application for home loan Receive funds from loan Restart process of finding lender for customer SYSTEMS INNOVATIONS CONTRIBUTING TO SUCCESS Aussie Home Loans utilises a uniquely designed objective computer program, known as Mortgage Explorer, in which they enter their customers desired loan features and determine the best suited loan for that individual. The program enables each loan adviser to quickly determine what Lender and more importantly what loan is best suited to the customer and thus saves a lot of time in the loan selection procedure. By providing their customers with a quicker and ultimately more diverse range of loans to decide upon, Aussie Home Loans has a distinct market advantage over other Home Loan Lenders and Mortgage Brokers. USABILITY OF THE INTERFACE Having not been able to use or see first hand how the Mortgage Explorer system works it is hard to offer too many comments on the usability of the interface. The Aussie Home Loan website however offers a demonstration version of the process involved when using the program and displays some pictures and detailed explanations of some of the programs features. Thus the comments below are made from second hand observation. The program is designed to be used in conjunction with a Mortgage Advisor from Aussie and therefore they are there to guide you through the programs functions and enter your details as you answer the appropriate questions. Thus the usability of the program is relatively easy for the customer as they don’t actually enter any data into the system. The program uses large diagrams that highlight various loan repayment schedules and thus allow you to compare different repayment schedules to show the customer the different amounts of interests they pay over varying time periods. The program has a toolbar up the top that enables the user to see what part of the process they are up to and make it easier to go back to certain sections if things need changing or if they customer wishes to use the loan calculators and diagrams again. The text visible from the pictures appears to be of a large enough font and appropriate text type making it easy for the client to read and follow on through the process. The diagrams and tables are also an adequate size making them readable and the colours used do not collide and therefore stand out enabling the user to appropriately compare the differences. All in all the program appears to be set up quite well from the demo that is displayed and the usability for the customer is certainly extremely easy as they don’t actually have to control any of the functions. SECURITY AND INTEGRITY OF THE DATA Knowing that your private information is going to stay that way is important to all customers. Aussie Home Loans can only secure your personal information to a certain extent, especially if you then choose to secure a loan with another organisation. Upon filling out the respected forms needed in order to apply for a loan they would then be filed away in the company’s filing cabinets, as not all information, especially the original hard copies can be stored electronically. The information would seem to be kept from prying eyes; however does this information always remain there. Eventually there comes a time when things have to be moved and if the files are no longer seen as active or worthy of being kept, they may be destroyed. Recently it was alleged that Aussie Home Loans had inadvertently left 44 files belonging to some of their clients, lying in a recycling bin in the public corridor of a suburban office in Sydney's outer west. Although there are a number of regulations regarding the collection and storage of client’s personal information it would seem that sometimes this information can be leaked accidentally. The Privacy Commission is an organisation designed to monitor the security of such private information and thus regulations and procedures are constantly being updated to try and better ensure the security of all documents related to personal information. Another security issue associated with personal data stored on a company database is the possibly hacking attempts or internal fraud that may occur. Although this is highly unlikely to occur, especially with the security measures taken to prevent hacking, it is still an issue that needs to be appropriately monitored by the company. ASSUMPTIONS The Aussie Home Loans information system for gaining a home loan via the website works reasonably well as they are able to maintain a large client base. If the system didn’t work then they would not have as many customers coming to them for home loans. The system also works as it allows people to achieve their goals with a fair amount of ease. The step-by-step process, that the system entails, helps those customers who struggle to navigate their way through to finding a suitable home loan. It has been developed to be used by trained mortgage advisors, enabling customers to simply organise a consultation and provide the company with the adequate information the system requires. Thus making the process of selecting a home loan far more easier and cost effective for Aussie Home Loan clients.