CBA announced a record statutory net profit after tax of around $7.7b this financial year – up 8% on the prior year - according to their annual report. Australian Broker caught up with the major lender’s executive general manager, third party and mobile banking, Kathy Cummings, to find out what this means for broker commissions as well as the CBA's expectations when it comes to third party members.
“In regards to commission, our aim is to reward quality applications with maximum commissions,” she says.
“We pay brokers extra basis points for meeting the quality metrics. This also helps them achieve a better straight-through processing rate, which is rewarded at the Head Group level with an incentive bonus paid through our Partnership Productivity Program. We rely on the Head Groups to make these rewards transparent to their members.”
Cummings says CBA’s broker remuneration is ‘in line’ with the market and that the bank is ‘very competitive’ when commission is based on a five-year loan life.
“Next to this we also offer additional revenue on the referral of products through the CONNECT Referral Program. The fact is the more products a customer has with a lender, the stronger the likelihood they will remain with that lender. This means the broker can feel more secure over the continuity of their trail.”
She also believes brokers are recognising the importance of increased productivity and are focusing on straight-through processing to improve efficiencies in the loan process.
“CBA is very keen to work with our broker partners to help them reduce rework and eliminate waste and, to assist them, we offer productivity workshops such as the Lean one-day workshop and ‘Kaizen’ five-day programs. These workshops have made a significant improvement for those Broker businesses that have embraced the process improvements. The result is an improved cost to income ratio for both brokers and the Bank.”
“To improve productivity,” says Cummings, “people need to do things better and a productivity workshop shows you how. Our broker partners are always welcome to talk to their relationship manager about a productivity workshop.”