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Mentoring: the missing link in industry fraud defence
Knowing credit is not the same as knowing how to be a broker, writes Purple Circle CEO Michael Stephens
Home loan fraud investigations circling our industry have rightly shaken confidence in mortgage broking. With banks reportedly sharing blacklists, and allegations of a multi-billion-dollar syndicate at the centre of it all, the question is no longer whether we have a problem. It's what we should do about it.
Plenty has been said about aggregator due diligence, reference checks and lender accreditation. Those conversations matter. But in my view, one of the most overlooked structural weaknesses in our industry sits much earlier in the chain: how new brokers – and particularly ex-bankers – are inducted into broking.
Why SMS authentication is exposing mortgage lenders to avoidable risk
Australia's mortgage lending sector sits on a vast repository of sensitive financial and customer identity data. From payslips and tax returns to bank statements and identification documents, brokers are custodians of the information cyber criminals value most. Yet many mortgage brokers still rely on usernames and passwords, or, at best, SMS-based multi-factor authentication (MFA), as their frontline security controls. A recent data breach highlights exactly why this approach is flawed.
The widely reported cyberattack on Australian fintech YouX in February of this year is a timely reminder that attackers do not always break in using sophisticated methods. Increasingly, they are simply logging in using compromised credentials. Whether through phishing, credential stuffing or social engineering, once an attacker can intercept a one-time SMS code, they can gain access to systems that hold highly sensitive customer data.
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