Sony Bank ‘not a threat’ to Australian brokers

by Caroline Dann09 Jul 2012
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. 


  • by Country Broker 9/07/2012 10:36:51 AM

    Very hard to see how a broker customer would change to an on line application suitation, customers come for advice and to discuss their requirments. This is why brokers have such a large market share. This will probably see more competition for the borrower who wants to and always was going to go on to a direct on line application.
    They are not our market unless they find the on line application process that difficult they will end up with a broker anyway.

  • by Damien 9/07/2012 11:19:01 AM

    Sony would be well advised to review just how unsuccessful Virgin's attempt at the same strategy was. If Sony seriously want market share,they would embrace Brokers, not ignore them. Just another Ubank

  • by KT 9/07/2012 11:30:47 AM

    If price is the ONLY consideration, people will flock to it. Unfortunately many FHB and younger borrowers are thinking that way. It is the mortgage brokers role to ensure borrowers are not sucked in by cheap rates alone.

    Borrowers need to think about product features (offset vs redraw), to cross or not cross-collateralise, to fix or not fix rates, think about repaying your loan in such a way that you don't miss out maximising your options when it comes to refinancing some time down the track.

    These things brokers should be good at and adding value to their clients and it is something I'm sure online channels will not be able to provide