Should you decide to no longer obtain the three months of transaction account statements, you will need to collect alternative documents to verify different aspects of a client’s financial situation. Here’s an overview of alternative documentation:
Income Verification
To verify income, consider the following factors:
Employment type: Is the client salaried or self-employed?
Employment duration: Short-term employment may require additional verification.
New or existing client: Do you already have documentation on file from a previous loan?
If you choose not to obtain transaction accounts, here are alternative options to verify the client’s income:
MyGov Tax Portal printout
Verbal income check (with notes detailing the date, time, and verifier’s position)
Employment contract (for employment less than six months)
Superannuation statement (showing employer contributions and potentially supporting an exit strategy)
Employment letter on company letterhead
Financial Passport or Open Banking data
Existing client records (if applicable)
Living expenses verification
When verifying living expenses, consider the client’s experience and familiarity with their finances:
First-time home buyers may need guidance on costs like body corporate fees or property expenses.
Experienced property investors may have a clear picture of monthly outflows.
Existing clients may have previously provided documents which you can use to cross reference their stated expenses.
Alternatives to transaction accounts for expense verification include:
MoneySmart budget tool completed by the client
In-person review of monthly internet banking transactions (with notes comparing actual spending to the client’s stated budget)
Existing client documentation
Open Banking data
Dependants verification
We recommend obtaining a Medicare card to confirm if the client has dependents, such as a spouse or children.
Credit reports
For liability verification, we encourage using Illion credit checks with client consent (obtained either through Digi-sign or electronic consent). While some liabilities like BNPL accounts may not appear on credit reports, a credit check combined with direct client enquiries can help meet responsible lending obligations.
Applying the new process in the most common scenarios
When choosing documents to verify a client’s financial situation, you’re encouraged to select options that best suit the individual client’s profile. After selecting your verification methods, record the rationale for each choice in the loan file to ensure you’re meeting compliance requirements.
To help you apply these steps effectively, see our Scenario Guidance Table for examples of common client scenarios, recommended documentation, and tips on how you used this documentation to satisfy your verification process.
This new approach allows you to exercise professional judgement in meeting compliance requirements, adapting to each client’s needs. For any questions, please reach out to your Compliance Support Manager. We’re here to help every step of the way.