Experts believe Japan’s Sony Bank is unlikely to pose a threat to mortgage brokers, following last week’s announcement of its plans to launch in Australia.
Sony Bank is an online business which, in theory, cuts out the need for brokers with its direct-to-lender approach.
Speaking to Australian Broker Online, SAKS Consulting’s principal, Steve Patterson, was sceptical of its impact on intermediaries.
“If brokers do their jobs properly, and are there to help people through the biggest financial decision of their lives, there will always be a need for them,” he said.
“It’s a complicated process, and most people welcome someone on the other side of the kitchen table to explain everything.”
Patterson believes the Big Four have too much of a stronghold on the market to be sidelined by a foreign bank.
“Firstly, new and foreign entrants to the market traditionally haven’t done well. This is largely due to the strength, distribution and reach of the Big Four. ING
Direct has been on the market for a while now, and is very aggressive, but still cannot compete with the majors.
“A lot have come and go with big plans – none have gone that far. I would suspect the Big Four have 85% to 90% of the market. They [Sony Bank] have a hard road to walk,” he said.
Patterson warned online banks would be more of a threat in the future, as a younger generation – already adept at technology – embrace online lending.
“We may see more and more people seeking online means. However, that’s still a way away. There’s still the overriding issue of hand holding. There’s nothing brokers need worry about at the moment,” he said.
If approved, Sony Bank will be the first Japanese bank to target private mortgages in Australia.
The Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui Financial Group and the Mizuho Group already provide corporate loans to Australian businesses.