Exceeding its financial targets in 2017, NAB attributes a 15% increase in business to the broker channel. Now GM of broker distribution Steve Kane, has big plans to repay the favour
In the words of Steve Kane, NAB general manager of broker distribution, the last financial year was “exceptional” in terms of the bank’s relationship with the broker channel. Exceeding its targets for book growth, revenue and sales, NAB recorded a near 15% increase in business.
The figures are the direct result of a 2016 strategy that saw NAB open its entire portfolio to the broker channel, prompted by the realisation it was operating what Kane describes as “two separate businesses”.
“We canvassed our broker and aggregator partners and decided to make available all of the NAB products and services to their customers,” he explains. In addition to the bottom line impact, it was great news for channel partners too, who could now provide a more extensive range of advice and products.
“It has been a win-win for everyone. NAB Broker Distribution’s positive financial performance in 2017 was driven largely off the back of extending these products in the marketplace. We believe we saw a 10-15% increase in business because of it,” Kane discloses.
New products weren’t the only change in the mix. Further extending its reach in the broker space, NAB launched its customer advisor broker (CAB) program, placing members of the broker network directly in its retail branch network. The approach was designed to meet demand from customers who prefer the in-branch experience, as well as providing contact for brokers through the branch network. Additionally, it allowed those in-branch to witness the value of third-party brokers first hand.
Further campaigns included How’s Business, a double-edged strategy to tap the 30% of residential loan applicants who are also small business operators. Backed with a prequalifying tool, it coaches brokers on the questions that advance customer conversations while also extending their knowledge of NAB’s credit process.
Kane says, “We recognise the broker channel is expanding. Not just in terms of residential mortgages, but also in terms of small business lending, commercial lending and equipment finance.”
In his eureka moment, Kane has placed customer experience and diversification at the heart of NAB’s third-party strategy, crucially paving the way for the bank to take the lead in several key areas.
As part of its ongoing work to embrace digitisation – as well as collaborate with new fintech players – this year NAB will make its largest investment in broker partner technology to date. Among the developments the bank will become the first major to implement is the electronic submission of all upfront loan documents, with online verification apps par for the course.
As COO, Antony Cahill pledged in his opening statement to the productivity commission that investment in NAB’s specialist tech innovation hub NAB Labs will double. Supporting the customer’s transition to digital banking – and exceeding their expectation in the process – a further $200m will be invested in the Customer Journeys program, to “completely re-engineer key customer experiences”.
It’s NAB’s philosophy towards tech that sets it apart from others: rather than tailor what innovation sends its way, NAB is using its suite of new digital tools to diversify what brokers present to customers and how they present it.
Following on from the Helping You Accelerate scheme in 2017, focus will fall on advancing the application process for residential and small business lending. A digital lodgement process is scheduled for release later this year, allowing brokers to use the same technology for both small business and residential loan applications.
Further, this month NAB will introduce a new small business unsecured lending facility to its broker channel, called QuickBiz, which gathers information from multiple sources for the broker to present to small business clients looking for unsecured lending.
"That's really a technological edge. We are taking a fintech type approach to provide those services to the broker channel," Kane comments.
“We know that SMEs are the engine room of the marketplace and it’s really important we provide brokers the opportunity to service all those needs”
Taking the strategy beyond its own business, in recent months the bank has partnered with RealEstate. com.au to combine property search and acquisition with finance for the first time – a move Kane calls “an interesting innovation”. In February, NAB was named as one of several backers of co-living start-up Kohab.
Supporting the digitisation of the mortgage and purchase process, NAB is also preparing for advances in related areas, such as land records.
“It’s about preparing, not just the broker and credit process but also the settlement and fulfilment beyond that in a digital world, and making sure we keep well aware of that,” Kane says.
Technology is also being harnessed to enhance professional development. In March, NAB hosted its inaugural Digital PD day, streamed to brokers across Australia and covering such topics as business lending, market trends and using technology for competitive marketing edge. Attendees can receive up to 3.25 CPD points for the FBAA and MFAA.
However, while there are big developments on the horizon, Kane says a strong call remains for the human touch.
That human touch has found itself in the firing line recently, with further scrutiny still to come. Executives from NAB have taken a front-seat role in the combined industry forum and in implementing its recommendations. Kane sees an opportunity for brokers to step up and remind Australia of their true value.
As he says, “When you have 55% plus of business coming through brokers, it’s very important that there is a strong regulatory framework in place.”
However, watchful eyes provide more reasons to shine, and he adds, “We think there is opportunity for brokers to stand up, increase the professionalism they show, and really be trusted advisors to their – and our – customers.”
Kane has a clear vision for how the role of the broker will evolve under new market conditions and commercial lending plays a key part. As he says, the priority is to retain focus on the customer and build on that relationship to service further requirements.
Focusing on supporting brokers through the changes, an army of BDMs are on hand to help, and sector specialists in areas such as agriculture and health are available for further assistance.
“We know that SMEs are the engine room of the marketplace and it’s really important we provide brokers the opportunity to service all those needs. We believe and support brokers and the broker channel and we think they are able to support a wide range of customers, not just customers seeking residential loans.”
Whether brokers achieve that with help from an app-based question bank or draw on other sources is up to them, but the future will be diversified and the next generation of brokers will enter a vastly different industry than their predecessors.
Eyeing an opportunity for growth through the arrival of new entrants, NAB is supporting next-generation talent to enter the broking space on a structure of their choice, and Kane says the only criteria is that new brokers are qualified, responsible and compliant. He adds, “We believe the lifeblood of any industry is bolstered by bringing new people in.”
Offering three pieces of advice for the next generation, he concludes: “In order to deliver the best possible outcomes for customers, brokers need to work closely with their lending and aggregator partners, always keep excellent documentation and remember it isn’t about overnight success. It requires time to build relationships with customers, and brokers must continue to be absolutely aware of their responsibilities under the NCCP and be compliant with all legislation.”