The entrance of new players into the mortgage market could prove a risk to brokers, but also mean new opportunities, industry experts have claimed.
At the National Mortgage Brokers' annual conference held on the Gold Coast last week, a panel of industry experts warned that new players in the mortgage industry could increase the competitive pressures on brokers.
FirstPoint Mortgage Brokers founder Troy Phillips said comparison sites could prove to be a serious source of competition for brokers. While he said comparison sites had yet to reach their full potential, Phillips claimed that - if done correctly - they could constitute a risk.
"They're pretty dumb at the moment but if they get their acts together and someone wants to commercialise them, they're going to be a big risk. I think these rate comparison sites, combined with the broking touch, are going to be a big risk to what we do right now," he said.
director of sales and distribution Mario Rehayem said online mortgages have thus far proven unfruitful.
""The ones who have tried to do 100% online are failing, and the reason it's failing is because there's no human interaction in the deal or process. My personal opinoin is, in Australia, we are not ready for 100% online mortgages; we're not there yet."
But Rehayem said potential new entrants like supermarket chain Woolworths had one key advantage: their access to customer data.
"Where Woolworths are going to come in and play as a big kid is the data side. They are understanding and they are breaking down their data. Don't forget, they have a lot of members, they have a lot of information about their members and what they'll do is theyll dissect that data until the cows come home and really, really pinpoint what they want to do. Now how they execute that is going to be the journey. That is probably going to be their biggest task; not understanding where they want to play or what they want to do, but how they're going to execute it, and that's going to be the make or break," he said.
head of sales and distribution Doug Lee said there were still questions surrounding potential new entrants such as Woolworths could also prove to be a benefit to brokers.
"If it does create some awareness around availability of mortgages, than that can only be a good thing for. That's because people don't just land on the first thing you talk about, they than go back and do some research; people use the internet for research. So if your name as a mortgage broker or whatever pops up, in the next couple of years I see this industry going to 60-65%. It's on a great curve at the moment. So I don't necessarily see it as a threat, I just see it as someone putting something out there in the marketplace which creates some opportunity for you," Lee said.