A recent Genworth report shows brokers remain optimistic about the coming year, despite slow credit growth and pessimistic lenders.
The study, Home Grown: Mortgage Industry Perspectives, found two-thirds of those surveyed believe credit growth will pick up in 2013, compared with 12 out of 14 lenders who believe it will continue to contract.
However, brokers were also quick to point out the need for competition between lenders to expand in order to grow their businesses in a low credit growth environment.
They also highlighted the need for lenders to focus on the loan approval process in order to improve loan volumes.
Ellie Comerford, CEO of Genworth, says that while a majority of lenders are experiencing “sluggish” growth, this is likely to lead to innovations of lending techniques and that if lender expectations that consumers will continue deleveraging in 2013 prove accurate, then the urgency of implementing new lending techniques and channels can’t be underestimated.
“The survey highlighted the need for lenders and brokers to use more similar criteria and methods during the credit sign off process and to work more collaboratively to improve efficiencies, especially around the credit scoring policies. Doing so could result in quicker and more efficient borrowing processes, ultimately driving credit demand.”
The report shows lenders and brokers have both acknowledged the increasing influence of online channels as another communication conduit for borrowers. Lenders, according to Genworth, are using social media to stay relevant to customers, while brokers are using it for brand building, credibility among potential customers and lead generation.
While increasing online presence is consistent with changing consumer behaviour, many lenders argue that offline channels, specifically face to face, are preferred by consumers when taking out a mortgage.
Comerford says mortgages are complex products and that it’s difficult to find a one-size-fits-all approach.
“While online can provide vast amounts of information, consumers also look to more personalised communications channels to ensure they are basing their decision on all relevant information.”