As 2020 enters its fourth and final quarter, there are a number of words we’re growing weary of.
Unprecedented times, uncertain outlook, pivot, adapt, evolve – these are just some of the buzzwords that have dominated our collective conversations and media stories since the pandemic arrived.
However, far from being discouraged or disheartened by the unusual and ever-changing set of circumstances that COVID-19 has brought about, Stephen Moore, CEO of Choice Aggregation, believes we have every reason to be positive about the mortgage industry’s future.
“Despite the uncertainty, and we’re certainly still in the middle of it all, if you look beyond the next period we see the future as very bright. In fact, we’re highly optimistic,” Moore says.
“We still believe that broker market share will get towards 70% in the next three years, and there’s a couple of reasons for that. First is the broker industry’s track record for resilience – brokers have a fantastic track record for not just surviving adversity but prospering.”
When it comes to the best interests duty, Moore believes that once we get through the clunkiness of the implementation phase, brokers will be in a better position than ever as “it now means we have support from government and regulators to ensure confidence in the system”.
“There will be no one other than brokers who will be able to say, ‘I have a legal obligation to act in your best interests’. This, in my view, will be a fundamental driver of ongoing growth in the industry,” he says.
“People trust brokers already, and with the backing of this regulation it leads to a very optimistic future.”
It’s not just the future Moore has reason to be hopeful about, but also the present.
For Choice, 2020 is shaping up to be a very strong year where the numbers are concerned, with growth of 23% for the calendar year to date.
“These are very strong numbers coming through, and they translate to overall book growth as well. Not to make light of the uncertainty and challenges that people have been experiencing, but what is evident to us is that Choice brokers aren’t just coping, they’re actually seeing real business growth,” Moore says.
“We don’t know what will happen in the future, but there are customers that you can help right now – so that’s where your focus should be”
“Our July settlement numbers were $1.93bn, and that’s a record result – it’s up 36% versus July 2019. For the first time that I can remember, we’ve seen volume up in every state, and in fact with the new year-to-date numbers we’re now up over 23% for the year in terms of settlement volumes. I must admit, I did expect things to have dampened by now, but there’s more growth coming.”
As a business, Moore says Choice is “lucky to have many outstanding brokers with us” who, in both good times and bad, are helming businesses that tend to prosper.
“We spend a lot of time working with our brokers on their growth plans, and as a result we’re seeing real growth right across the board. We saw a real spike on the back of refinancing, as expected, and since May we’ve seen growth come back in segments like owner-occupier and new builds.”
Moore suggests there is substantial opportunity in the residential lending space and more growth coming, and there’s equally “very strong growth in the SME business lending segment”.
For this reason, he believes there’s no time like the present for brokers who don’t yet offer commercial finance to consider adding this to their portfolio.
“We know that if we look at the typical broker’s portfolio, a big percentage are typically business owners. There’s huge opportunity there to cross-sell – the right question for brokers to ask is, what’s the best business opportunity to leverage this?” Moore says.
“We’re working with a number of different lenders to develop a standardised digital approach, rather than a different platform with each different lender, as that creates complexity. There’s a tool that sits within Podium, called My Finance Communities, and it enables brokers to have a seamless online process with customers, through the uploading and storing of documents. There’s also a chat functionality directly attached to the documents, which enables easy conversation between the broker and the customer – and it’s all stored on the customer record. It’s a great tool that can be used here and now, and it’s another good future-proofing element in the face of the changes brought about by the pandemic.”
Another efficiency driven forward by the pandemic is the move towards electronic tools, such as e-signatures, digital document delivery and virtual VOI.
“These are just a more efficient way of doing business, and they should be seen as being embedded well into your business now,” Moore says.
With the changes to be brought in around the Consumer Data Right, the CEO says that even more opportunities exist for brokers, as the ability to leverage data will drive the industry going forward.
“Data is more available now, and there’s more coming – with CDR, there will be far more data available on customers, with their permission, in the marketplace, and you really need to have the right CRM system in place to be able to manage that. We certainly believe that the future CRM system is our Podium platform, and that’s ready to accept a whole range of different data. However, it’s only as good as the insight you can develop off it – you need to be able to reuse, validate, make sense of it and, most importantly, develop insights that are actionable. That’s the essence of a good CRM system, and it’s why I believe management of data will be a key driver of our industry.”
There’s no denying that Moore has an unashamedly positive outlook, and he says he owes that in large part to the fact that those in the mortgage industry are so resilient and adaptable.
“It’s actually quite easy to be blinkered and to overanalyse what may or may not happen in the future. To use a bit of a football analogy, some of the best players play what’s right in front of them and they don’t overthink the game. I think the same applies for the best brokers. You need to have one eye on the horizon about what is possible and what’s coming, but you also need to stay absolutely focused on the opportunities that are right here and right now,” Moore explains.
“The reason we see the resilience of the industry and why we feel the future looks so bright for brokers is because in times of uncertainty and insecurity, there’s a natural flight to those we trust”
“There’s no point in second-guessing the future when you can make hay while the sun shines. We don’t know what will happen in the future, but there are customers that you can help right now, so that’s where your focus should be.”
Of course, that’s not to say that meeting the challenges thrust upon the industry hasn’t been difficult to manage.
“The pandemic is constantly evolving, but the mortgage industry has proven to be adaptable. I’m particularly proud of what the Choice team have done in terms of adapting quickly to support brokers over this period,” Moore says.
“Most of the key elements of our business we were delivering face-to-face not too long ago. Now, tools like Zoom are changing the way we communicate remotely and with our broker network and with customers as well.”
In addition to scheduling video calls weekly with Choice brokers and delivering national updates via its Staying Connected series, Moore says the aggregator has been making a concerted effort to reach out to brokers on an as-needs basis to deliver content and support that is highly relevant to the current environment.
“Rather than have these big events and conferences like we’ve had in the past, we’ve broken them down to be very targeted virtual deliveries on topics that are driven by demand, such as how to leverage the most up-to-date digital tools, the latest lender changes, and the most recent news on COVID hardship,” Moore explains.
Stephen Moore, CEO of Choice Aggregation
“We’re probably overcompensating and doing more communication than we’ve ever done before, but we’re doing it in a very targeted way. When significant changes come about quickly, the trap is to retrofit what you do face-to-face and try to make it work digitally, but my view is that most people – myself included – have very little appetite to spend a whole day in a Zoom conference. So, how can we deliver updates that are short, sharp and meaningful hour-long sessions that serve the purpose and also let brokers get back to their core business?”
Choice has also been reaching out to its own community of employees and broader broker network to acknowledge that this is a significant period of change and uncertainty, and that individuals cope differently with change.
“That’s something we’re very conscious of. We have a partnership with R U OK?, and we continue to do a lot of work with our members on this, as most people are coping well, but some are not. With R U OK?, we’re also enabling our brokers to have the same conversations with their customers and their friends and family,” Moore says.
“We spend a lot of time with individual brokers on their circumstances, helping them through where they are at and assisting with strategies to help them get to the other side. That’s the true test of a business relationship: if you’re there through the tough times as well as the good. And that’s something we really pride ourselves on, being there for our members through thick and thin.”
Most people need a steady hand and someone they trust to have the right conversations with during challenging times, which is why Moore remains so steadfastly optimistic about the future of the broking industry.
“The reason we see the resilience of the industry, and why we feel the future looks so bright for brokers, is because in times of uncertainty and insecurity there’s a natural flight to those we trust,” he says.
“The role that brokers play in supporting customers is absolutely critical, and the events of 2020 shine a light on the value that Australians place on the broker proposition, because brokers have taken the time to earn that trust over the years.”