Banks and brokers face imminent online clash

by Mackenzie McCarty02 Apr 2012

Australian Mortgage Brokers outgoing CEO Paul Gollan has said online mortgage sales will define the mortgage broking industry this decade - and banks will ant to own it.

Speaking with Australian Broker Online, Gollans said there is 'no doubt' that online mortgage sales will be the defining issue of the next decade, following his 12 years at the helm of AMB.

"My view is that over 50% of mortgages will be arranged in a non-face-to-face environment within in the next five years, ten years at the latest," he said.

Gollan said the 'missing link' at present is effective customer identification without a face-to-face meeting, which he says that companies are working on getting around.

"This will happen because consumers will demand it," Gollan said.

"The boom in social networking is a clue to how many people are interacting now and given the choice between organising a mortgage online and or over the phone, or visiting an office or having someone visit them, the shift will be towards the least intrusive distribution model," he said.

Gollan has warned the broking industry to grasp this shift - or risk losing power to the banks.

"Banks will want to own this space of course and get a competitive advantage over brokers," he said.

Related stories:

Gollan to depart AMB after 12 years



  • by Thomas 2/04/2012 10:24:52 AM

    Yep like all things, internet will start to play a bigger role. NBN will make video interviews commonplace. The newer generation of borrowers already see internet business as normal. Whether it penetrates as much as 50% is debatable, but it will penetrate and quickly. Already has. 5 years ago online lending failed. But now its starting to work. UBank and are already seeing good results. Its only going to get faster and easier and more common as old consumers are replaced by new consumers, and the NBN makes it easier to do.

  • by Rach 2/04/2012 10:40:19 AM

    I think 50% is unrealistic in teh short term... A huge majority of my business pre application is done electronically, but when it comes down to it, if it's geographically possible, I think most customers (even the youngest) still get a feeling of comfort having met their broker - I also thinks it helps us, as brokers, forge a greater bond for repeat business and referrals.

  • by Country Broker 2/04/2012 11:23:41 AM

    I agree that in the long term this will be the percentage , I do have some issues as a fully licenced broker in regards to client Id and knowing your clientrequirments. NBN will have a role to play in the future . The predicted roll ou in NON METRO areas is between 18 months and 8 years! Yet 305 of all mortgages are written outside NON METR locations.
    I believe we will need to see the borrower once but all the preliminary work can be done on line BUT I think to fully comply with the NCCP requirments we will need to meet a client at least once , and so will any bank,
    The other issue is FRAUD, the online system is open to credit , income and identity fraud, we will see the banks wanting this space until there have been some fraud cases which burn them badly .
    Time will tell.