Australia’s mortgage industry will be transformed by a digital and data revolution, industry bigwigs say.
A mortgage lending roundtable of 15 industry leaders, including from Macquarie
, Mortgage Choice
and Pepper, was organised by Deloitte Financial Services to figure out future trends.
The consensus from the roundtable is that digital resources and data will be the main game-changer for the $1.3 trillion Australian mortgage market over the next three years.
“Much of this change will be consumer-led and driven by the need for both simplicity and advice from customers as to how best to manage their finances,” Deloitte banking partner James Hickey
“The organisational winners will be those that can make the best scientific interpretation of the masses of ‘big data’ that financial institutions and others continue to accumulate and use this to facilitate successful proactive and valuable interactions for the consumer. Digital will be a critical enabler of that.”
Deloitte Digital partner Katherine Milesi said the greatest challenge will not be about the technology itself, but how it is “stitched” together.
“There are 23 million Australians, and we have 32 million mobile devices, which will grow to 100 million in five years’ time. So digital is not just about laptop, it’s about mobile – smartphones, tablets and phablets – as well as social media, and how all of these can come together to assist consumers with simplicity and assisted self-serve.
“The challenge also is to bring the technology pieces of the puzzle together in a way that makes customers feel like they’re interacting with the same brand, and getting support across all touch points and through all channels.”
Deloitte used conversations from its roundtable to form part of its annual mortgage report.
The current market outlook for 2014 is that mortgage settlement growth is back and competition will intensify. At the end of last year, annualised settlement growth of greater than 20% drove a record number of housing commitment applications across the market, according to the report.
Settlements across Australia on a monthly basis in 2013 reached more than $28 billion. This is the highest single monthly settlement rate on record, and a clear jump since the onset of the GFC, when they struggled to reach $20 billion, said Hickey, who helped write the report.
While the mortgage origination process is seeing some of the pieces come together for data and digital, with positive credit scoring and electronic conveyancing taking shape this year, this is just the tip of the iceberg for data and digital, the report said.
“The big banks have a clear advantage at this point. They have the depth of customer data, and they have the investment spend for digital innovation. Others will have to make smart choices about how to position themselves for future opportunities.
“Those lenders and brokers that can successfully marry data capture, with proactive and valuable interactions with customers, will surge ahead.”