Electronic Conveyancing in Australia Faces Interoperability Issues
The development and implementation of electronic conveyancing (eConveyancing) in Australia have been significantly impeded by the country’s major banks. These financial institutions have been identified as the main obstacle in the rollout of interoperability, according to Marcus Bain, director of Bain and Young Conveyancing.
During a hearing of the NSW Legislative Council’s Select Committee on Competition Reforms in Electronic Conveyancing, Bain claimed that the banks were the primary reason for delayed transactions. He stated, “It’s definitely the banks that have held up these transactions. I’ve done a huge number of transactions in the Sympli workspace and that technology is definitely okay. It’s just the banks that are holding up the interoperability connections.”
PEXA vs Sympli: The Battle for eConveyancing Dominance
PEXA, an eConveyancing platform founded nearly 15 years ago by state governments and listed on the ASX in 2021, has dominated the market ever since. However, the company has been facing significant competition from Sympli, a new market entrant.
Their rivalry was a central topic during the NSW Legislative Council’s hearing, with many participants advocating for Sympli, which is perceived as a necessary disruptor in the market. Jared Zak, founder and principal solicitor of Dott and Crossitt Conveyancers and Solicitors, echoed Bain’s sentiments about the banks’ resistance to Sympli. He expressed his fears about a potential single point of failure event, urging the government to intervene and encourage the banks to cooperate.
Challenges Faced by Sympli
While Sympli’s platform has proven effective, the company has been struggling with the banks, which have shown a preference for PEXA. According to Zak, major banks like CBA, Westpac, NAB, and ANZ have been particularly resistant to using Sympli for transactions, creating a significant barrier to the platform’s adoption.
Philip Argy, chair of the National Electronic Conveyancing System Committee of the Law Council of Australia, highlighted that for Sympli to work properly, it needs to adopt the same communication protocol as PEXA. The banks’ reluctance to do so stems from potential intellectual property disputes, which could lead to legal complications.
The PEXA Monopoly: A Roadblock to Competition
John Ahern, CEO of InfoTrack – one of Sympli’s shareholders – accused PEXA of using intellectual property claims to delay reforms. According to Ahern, PEXA has consistently hindered the adoption of interoperability, thus maintaining its monopoly in the market.
PEXA’s CEO, Russell Cohen, defended his company’s stance, arguing that the firm has supported interoperability reforms without the need to disclose confidential intellectual property. Cohen stated that PEXA has participated in numerous meetings and invested heavily in the program, yet there is still no other comparable national network to connect to.
Elizabeth Warrell, PEXA’s CFO, further elaborated on the issue of intellectual property, explaining that for functional equivalence and interoperability, PEXA would have to share its intellectual property with competitors, which could potentially compromise the company’s trade secrets and processes.
Future of eConveyancing in Australia
As the debate continues, the NSW government and the Select Committee face the difficult task of deciding when and how to enforce existing laws. Sympli has urged the government to use its enforcement powers to ensure PEXA meets its legislated obligation to deliver interoperability.
The company has called on ARNECC, along with the NSW and Queensland governments, to provide clarity on the outcomes of the ARNECC reviews and next steps before the end of this year. The ultimate goal is to deliver interoperability in eConveyancing by 2026, while ensuring a competitive and fair market for all players.
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