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Auswide flags incoming tech for broker channel

The non-major bank has bumped up its investment in digital features for brokers, signalling that it is set to roll out online ID checks and auto-credit decisioning.

In an investor presentation at the Wilsons Rapid Insights Conference last week, Auswide Bank touched on broker distribution for its home loans business.

Broker flows, as well as business received in the private bank and through partnerships were cited for consistent growth in the bank’s loan book over the last few years.

Auswide ended December with a loan portfolio balance of $3.7 billion, increasing by 6.2 per cent from June last year, and up by 15 per cent from June 2020.

Home loan settlements also reached record highs during the six months to December, at a total of $561.5 million, 6.5 per cent more than the prior corresponding period.

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Brokers had originated around two-thirds (66.9 per cent) of new residential home loans in the September quarter last year, compared to 60.1 per cent for the same period the year before.

A slide in the presentation stated “scale is not the advantage it once was”, with 65 per cent of home loans now being written by brokers.

There had also been a shift in relationship between brokers and the big four banks post-royal commission, which Auswide noted had created opportunities for smaller players.

The bank also pointed to technology opening further possibilities, claiming that it can “quickly assess, acquire and integrate technology solutions at much lower cost than big rivals”.

Technology was also determined as a key part of its broker play, under its greater transformation strategy.

Auswide outlined plans to keep the momentum going in its loan book, by maintaining speedy turnarounds in the third-party channel.

The bank reported that it is on track to deliver digital verification of identity services, auto-decisioning and internal dashboards in the second half of its 2022 financial year.

Further, Auswide stated that a series of robotic processes have already been successfully implemented in the operations and loan processing functions.

Outlook uncertain, but Auswide is optimistic

In its outlook, the bank noted ongoing property trends in its home state of Queensland.

Brisbane house prices had surged by 29.3 per cent in the 12 months to April, while regional prices for the state had escalated by 25.3 per cent.

There had been a flurry of interstate migration, government stimulus and low-interest rates.

However, as rates have started to lift, there has been uncertainty around the housing market, Auswide noted, but it believes it is in a good position.

The bank has retained a $1 million overlay in provisions, which originally related to COVID-19, in place.

Arrears are also at record lows for Auswide, comprising 0.2 per cent of the loan book.

It also noted that for the majority of its home loans, it has applied a maximum debt-to-income (DTI) ratio of six times, with only 5 per cent of its approved loans being above the threshold.

In contrast, total loans across the industry where the borrower had taken out more than six times their income came to around 24 per cent of all loans in December 2021.

[Related: AMP partners with Nano for new digital mortgage]

Auswide flags incoming tech for broker channel
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