Major mortgage groups under pressure

The architect behind one of Australia’s fastest growing mortgage businesses says national brokerages like Aussie and Mortgage Choice need to consider digital channels.

REA and Domain’s entry into the mortgage market has been largely viewed a vote of confidence by the broking community. However, the presence of digitally savvy new entrants could present challenges for incumbents that may have overlooked online channels.

“We see the next phase of the mortgage broking industry being led by a move to digital,” Lendi co-founder and managing director David Hyman told Mortgage Business.

“Players like ourselves are leading the way there. I’m sure that the ‘generation one’ groups like Aussie and Mortgage Choice will soon have to follow as customer demand shifts,” he said.

Mr Hyman started Australian Credit and Finance, a broking business that aggregates through Connective, almost five years ago and has since launched a string of successful mortgage businesses including Click Loans and Lendi. Last week, Lendi announced a joint venture with Domain Group that will see the real estate portal launch its own broking business, Domain Loan Finder, powered by Lendi’s technology platform.

“Lendi has largely replaced Australian Credit and Finance,” Mr Hyman explained. “We built a national network of mortgage brokers, both phone-based and face-to-face. Lendi has introduced a technology piece that sits between the broker, the customer and the bank.”

Lendi is essentially a customer engagement platform, which allows Australian borrowers to create a profile on its site. Behind-the-scenes technology matches customers to different lenders on Lendi’s panel, integrating a multitude of various underwriting criteria with the borrower’s needs to narrow down loan options, packages and structures.

A team of brokers and support staff are on hand to assist via live chat, phone or face-to-face meetings.

“We have over 250 staff in the business across different roles,” Mr Hyman said. “They are using the same platform as the customer and can help them through the process, but the technology does a lot of the work in the middle,” he said.

“Consumers ultimately decide the channel they want fulfilment through.”

Despite the rhetoric in the market around mortgage broker commissions and the potential threat of digital disruption, Mr Hyman is confident that the human element will remain a key feature of the third-party channel.

“We think mortgage brokers are here to stay,” he said. “We are a large part of the industry. We just think that advances in technology allow companies like ourselves to plug into what consumers are looking to do.

“Our data tells us that 90 per cent of consumers today are starting their home loan journey online.”

[Related: REA boss explains mortgage strategy]

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