Lextech CEO Peter Maloney (pictured) said the provider will instead focus on its core business and advance its mortgage origination platform and settlement services, currently used by over one-third of mortgage lenders.

The former CEO of property and legal technology business GlobalX and Dye & Durham Australia, Maloney was appointed as Lextech CEO last month. He said that Lextech’s decision to drop out of the ELNO process was based on a lack of market appetite.

“There has never been broad-based appetite or support for a second ELNO; neither banks nor the legal and conveyancing industry have collective support for it,” he said.

“While some politicians, government agencies and property professionals might demand competition as a blanket rule, the economic viability of a second ELNO simply does not stack up. From a security, platform and pricing perspective, PEXA is already highly regulated and performs its tasks with remarkable efficiency and reliability.”

Over $800 billion in Australian property transactions are currently processed predominantly through Australia-headquartered digital property exchange platform PEXA, which holds approximately 90 per cent of the e-conveyancing market share.

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Until now, Lextech has been working to be part of the government’s interoperability regime, as well as e-settlement provider Sympli.

The interoperability regime, due to be completed by the end of 2025, aims to drive more competition in the market and will allow parties in the settlement process (including lawyers and conveyancers) to transact with other parties during the e-conveyancing process while being able to subscribe to specific operators, such as PEXA and Sympli.

With its new leadership team in place, Lextech will now continue to develop value-added services and automations for its platform, including those offered by PEXA.

“Lenders, mortgage brokers and borrowers will best benefit from Lextech sticking to its core business and continuing to invest in the platform, offering new efficiency gains and further certainty for property transactions by facilitating real-time data exchange, seamless communication and automation,” Maloney said.

“We have a significant responsibility to Australian property buyers and sellers, and we are committed to investing in our platform and people to ensure we continue to offer lenders, brokers and borrowers certainty when it comes to loan origination and property settlements. We will continue to invest in our platform designed for lenders to make mortgage origination to settlement easier and more transparent for lenders, mortgage brokers, borrowers and their legal representatives.”

This news comes after panellists speaking on an InfoTrack webinar in March warned that a lack of competition in digital property settlements could be stifling innovation.

“PEXA’s fees rise every year, while conveyancers face increasing downward pressure on pricing. We are forced into a race to the bottom, limiting our ability to invest in talent and innovation,” one of the panellists said at the time.

In response to that webinar, PEXA told Lawyers Weekly that it applied a “small flat uniform fee, which accounts for 0.3 per cent of the average property transaction fees nationwide”.

“PEXA has, and continues to welcome competition from the other two electronic lodgment network operators (ELNOs) in the Australian market, and we continue to constructively engage in the ARNECC process of interoperability,” a spokesperson said at the time.

Lawyers Weekly reached out to PEXA for commentary on the latest Lextech developments, but the provider did not provide a statement.

While Lextech has dropped its pursuit to become an ELNO, Sympli CEO Philip Joyce told The Australian Financial Review yesterday (12 May) that the e-settlements provider has no plans to back down.

“If Lextech chooses to exit this market, it is another sad indictment of the power of the entrenched monopoly and the need for urgent government action,” he told the AFR.

“Sufficient funding to build a platform is no longer the key issue. Government intervention was required to introduce PEXA. It’s once again required to deliver competition.”

Speaking to Lawyers Weekly back in 2022, Joyce said interoperability would require “collaboration from all industry stakeholders” to be successful.

“I’m looking forward to a future where our Sympli capabilities and interoperability means competition and greater customer choice, and that drives innovation, value and resiliency,” he said.