Aggregation market too ‘mature’ to disrupt

A leading fintech specialist has said that, despite the influx of new technology coming to the mortgage industry, there is one part of the market that is "so mature" it cannot be disrupted: aggregation.

Speaking to Mortgage Business, the former CEO of the Stargate Group and fintech specialist Brett Spencer said that while there is room for disruption with mortgage products, he believes that there are some areas of the industry that are too big to be usurped. 

He explained: “I think the aggregation market is so mature today that I don’t think anyone can go in and disrupt it. I think with 16,000 brokers, the maturity that the big boys have got there is safety in numbers and, no, I don’t believe that a single technology play can disrupt aggregation industry today. 

“I think where technology can disrupt them is in lending, if you have someone in the non-bank lending space that can go down that path, but I certainly think in the aggregation space - I don’t see an AFG, PLAN, FAST, Choice, Mortgage Choice, Aussie - any of these guys being disrupted and usurped being the big boys, no matter how much somebody spends.

"I don’t see a Google coming in and going 'were going to do mortgages now’. I don’t see that happening at all,” he said.

Mortgage market needs new ‘add on’ product

However, Mr Spencer suggested that the mortgage market could benefit from some new products - particularly a new ‘add on’ product that could help consumers with their property purchases.

“With growing property prices today, you hear a lot of stories about the consumer who has pre-approval for X amount of dollars, goes to market and misses out by $20,000," he said. 

“They come back [to their broker] and the broker's response is: ‘You need to save' or 'You need to go and ask your mum and dad to borrow money'. But it's too late, you've missed the property. Saving today is a lot more difficult than it was 15 years ago. People love to spend money, we're a spending society.

"So, I think if somebody comes into the market and has an add-on product, similar to the old Mezzanine Debts, that you can get that doesn’t affect serving, that doesn’t affect the ability to still obtain that mortgage but gives them some comfort, almost like a buffer or a cushion to go to auction. I think there are opportunities there. Something that is there to help bridge the gap between where the [buyer] is at and what their actual goal is.

"I think that's something that is really innovative, and I’m sure somebody out there will do that and provide those types of solutions that can help brokers effectively close more deals for their customers.” 

Mr Spencer said that he believed that products and technology that “make the application process easier is also going to be a big change, a big thing”. 

He said: “Look at how credit cards have evolved… credit cards today are a simple online form, you fill it in, you... scan and upload an email or something and either you instantly get an approval or it takes 24 hours. 

“The capability is there to do a full five-day digital mortgage and there are players that will come out with that in the next 6-12 months and those sorts of things will be game changers,” Mr Spencer said.

[Related: Faster credit decisions with real-time technology]

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