Powered by MOMENTUM MEDIA
subscribe to our newsletter

Report identifies big gap in mortgage distribution

While they generally agree that broker market share will hit 60 per cent, Australian lenders are heavily doubting whether traditional branches can make up the remaining 40 per cent of volume.

The Deloitte Australian Mortgage Report 2016 asked a roundtable of banks, non-banks, mortgage aggregators and fintech providers what proportion of settlements brokers will generate in three years’ time. The majority of respondents believed broker market share would be in the region of 51 to 60 per cent.

Deloitte financial services partner James Hickey said this then begs the question: where will the other 40 per cent come from?

“If 60 per cent will come through brokers, is the other 40 per cent coming through proprietary branch channels? That was heavily doubted by the roundtable,” Mr Hickey said.

“I think we are seeing the decreased focus of traditional branches to be a loan origination centre,” he said.

Advertisement
Advertisement

“Recently they are moving to be more of a transaction hub. Therefore, where will that remaining 40 per cent come from? Will it come from a digital offering? A direct-to-consumer offering? That is where you will find some innovation around mortgage distribution, which the majors are looking at.”

Mr Hickey said that while brokers will have a very strong role going forward, the remaining 40 per cent of mortgage customers may be the ‘digital warriors’, who are quite happy to do a lot of the work themselves through digital platforms.

Macquarie Bank executive director Frank Ganis, who participated in the report, said digital technology is critical for every business that has aspirations to grow.

He pointed to offshore markets, where online mortgage distribution channels have been more effective.

“Having spent a fair bit of time working and reviewing a number of offshore markets, and experiencing scenarios when borrowers could complete the process of application, valuation, contract execution and settlement of a loan in a short time-frame of just hours, there are challenges which would need to be overcome before this could be applied to our market.”

PROMOTED CONTENT


Mr Ganis said that lenders need to be in a position to “push and pull information digitally, effectively and efficiently with customers, or they risk being left behind”.

“For example, Quicken is regularly highlighted as being potentially the fastest-growing mortgage business in the US. But ... it benefits from a competent group of professional sales and service executives who personally support the digital footprint and activities of the business,” he said.

“The combination of digital supported by the ‘human touch’ is why the Quicken offering is so compelling.”

In February, Quicken Loans made headlines in the US after it aired an advertisement during the Super Bowl for its new Rocket Mortgage product, which promises easy loans with the ‘push of a button’.

 

Report identifies big gap in mortgage distribution
mortgagebusiness

Latest News

Home loan commitments have soared across Australia and were above year-ago levels in all states and territories despite COVID-19, a new repo...

CBA’s investment fintech, x15ventures, has hired its first non-executive, independent chairman and a new portfolio adviser. ...

The major bank has announced that its group general manager internal audit, Shane Buggle, will take on the role of acting chief financial of...

FROM THE WEB

Join a group of highly informed brokers.

Broker Pulse, a community-driven knowledge base of lender performance Reveal exactly which lenders are making life easiest for brokers and their clients by taking this monthly survey and joining a group of highly informed brokers who leverage these insights every month.

JOIN NOW
podcast

LATEST PODCAST: Turnaround time blowouts

Do you expect to see strong uptake of the HomeBuilder scheme?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.