To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
The 14th annual Third-Party Lending Report has revealed that banks must continually improve to remain competitive within the broker channel.
A total of 1,002 mortgage and finance brokers responded to Momentum Intelligence’s Third-Party Lending Survey between 1 March and 30 April 2023, in which they rated the performance of the lenders that they have worked with over the previous 12 months.
Brokers were asked to rate lenders on 17 factors:
- Product range
- Product pricing
- Product policy
- Quality of business development managers
- Access to and ease in dealing with credit assessment staff
- Call centre support quality
- Overall end-to-end turnaround speed
- Client support post-settlement
- Training and education provision
- Broker communication
- Channel conflict approach
- Commitment to the broker channel
- Online lodgement useability and functionality
- Online application status tracking experience
- Online resource comprehensiveness
- Upfront valuations functionality
- Web presence and effectiveness of broker web portal
Each of the 38 lenders was then assigned an overall score (the average rating across all 17 attributes measured with equal weighting, displayed as a percentage of the maximum score).
Momentum Intelligence found that brokers are increasingly satisfied with the most commonly used banks (banks used by more than 20 per cent of broker respondents).
For example, the highest-rated mortgage lender received a score of 87 per cent, with the second-highest receiving a score of 85 per cent and third place scoring 82 per cent. All three were banks that had been used by more than 20 per cent of broker respondents.
This marked the first time in the report’s 14-year history that the top three most commonly used banks received scores over 80 per cent.
However, trend analysis showed that competition among the larger banks is heating up, with brokers coming to expect more from the banks they use.
For example, 11 of the 12 banks that were most commonly used by brokers this year had improved their scores on last year, but the improved scores did not necessarily result in a higher ranking.
Moreover, the one bank that had received the same score as last year dropped down a place in the ranking.
Noting the figures, Oliver Stofka, commercial director at Momentum Intelligence, commented: “The mortgage market has been incredibly competitive this last year and borrowers and brokers are therefore expecting more from their lenders of choice.
“The larger banks, in particular, have been working hard to delight brokers through their offerings this year, with overall scores for this segment up at record levels.
“But the most popular banks being used by brokers are having to work much harder than other lending segments. Only those who are continually improving their broker experience (and therefore receiving higher broker scores) are able to remain at the top of the ranking.
“The same cannot be said for the less commonly used banks and non-bank lenders, who have been able to hold or improve their position in their segment rankings this year, even without improving on their broker score.
“As such, it will become increasingly important for the larger banks to ensure they are delivering efficiencies and excellence in all 17 attributes to remain popular with brokers.”