Mortgage bosses point to regulation as one of the main culprits in preventing the growth of innovation and digital opportunities in the Australian mortgage industry.

Last week, the Deloitte Australian Mortgage Report 2016 asked industry leaders about innovation and digital opportunities in mortgages and where it is headed in the coming years. ING executive director of customer delivery Lisa Claes pointed to the bank's work in Romania, where it lobbied with the Romanian tax authority to gain authorized access to customers' income details.

"This gives the bank the ability to accurately assess serviceability, which when coupled with positive credit reporting enables a borrower to obtain instant access to credit, secured and unsecured," Claes said. "Customers love it."

Pepper CEO Patrick Tuttle also said that access to customer data has allowed them to offer personal loans in Spain.

"We get access to social security information from the government in a direct feed," he said. "So we have a lot of data that makes online personal loans much easier to process with automated decisioning."

But AFG executive director Malcolm Watkins said that regulation is a major hurdle for banking innovation in Australia, as it cannot be direct when targeting customers from particular segments or demographics.

"The current regulatory systems prohibit that kind of loan approval or access to customer data," he said. "Our privacy laws prevent such access to customer information and you cannot make a specific offer of finance to a customer without proving you know the customer in the first place."