Empowered by a new generation of connected technology, not to mention forward-thinking lenders and aggregators, broking is more efficient than ever before. However, when it comes to building a successful business, there’s only one connection that really matters
WHEN the first industrial revolution began in the late 1700s, the First Fleet hadn’t even arrived in Australia. With little to no basic infrastructure, let alone any industry, the country was a drastically different place. But it didn’t take long to catch up with the mechanisation transforming the rest of the world.
By the time the second industrial revolution occurred 100 years later, New South Wales and Victoria were self-sufficient manufacturing hubs, and a newly separated Queensland was building its own locomotives – a mere 30 years after the first piece of metal was cast in the state.
Today, with the fourth industrial revolution in full swing, the world is becoming an increasingly complex place, but Australia is once again.
Unlike revolutions one to three, 4IR has empowered the consumers of goods and services, rather than their manufacturers, with disruptive technologies utilising Internet of Things (IoT) connectivity, robotics, virtual reality and artificial intelligence.
Over the last decade, such technology has transformed the mechanics of how business, banking, government and society operate. Fintech is just one element of this, but it has seen one of the fastest adoption rates of any sector. In fact, a five-fold increase in fintech start-ups between 2013 and 2018 has pushed consumer adoption in Australia to almost 60% this year, and the ripple effect can be felt in broking, too.
“The mortgage broking industry is not immune from the rapidd disruption brought about by the development of new technology,” sas Stephen Moore, CEO of Choice Aggregation Services.
“Change brings both challenges and opportunities, so it is essential that brokers are familiar with the tools available to them to help drive efficiencies and mitigate risk across their business.”
When it comes to broking, technology has led to greater efficiencies in data collection, document signing and even loan approvals, drastically cutting turnaround times and handling vast amounts of data in little to no time at all.
One example is Prospa’s proprietary credit decision engine vwhich uses AI to analyse more than 450 unique data points for each application in just 15 seconds.
This delivers fast, informed decisions and a great user experience for customers. We obsess about our customers, and that’s reflected in our 9.9 TrustScore, +77 NPS score, and 68% repeat rate,” says Beau Bertoli, joint CEO and co-founder of Prospa.
Such advances have rewritten the rules of customer satisfaction and upped the bar in terms of expectations, with many brokers and borrowers now shunning the lenders that can’t offer near-instant approvals.
When it comes to the tech that keeps brokers in business, many industry stakeholders are actively developing new tools, from data analytics to leading CRM software.
Among them is Liberty Network Services (LNS), whose advisers have reported a 25% increase in productivity when utilising the mobile CRM and loan management application system Spark. This is accessible via iPad, and Spark even includes a customer self-serve feature to reduce the administrative burden brokers face.
“For most brokers, fast responses and real-time status updates are likely to rate highly on their wish lists. Without exception, every adviser who joins LNS is impressed at the ease, speed and professionalism Spark provides them,” says managing director Brendan O’Donnell.
In true 4IR spirit, no modern solution works in isolation. Choice’s, CRM system, Podium, integrates with various other interfaces to assist brokers in areas such as sales funnel and workflow management, NCCP compliance and product search tools, among others.
“Having access to an effective CRM system is a critical component of the modern broking business’s toolkit. The collection and protection of customer data has never been more important, and a good CRM can greatly improve how these processes are managed,” says Moore.
“It’s not about what makes your business most efficient, but rather what technology can enable you to better service your customers’ needs” Brendan O’Donnell, managing director, Liberty Network Services
Currently, Choice is working on an enhanced version of the system, featuring a simplified user interface, enhanced digital mortgage functionality, the ability to control data visibility within an organisation, and a customer community function.
Designed in collaboration with the aggregator’s brokers, the enhancements will tackle the pressing issue of data management and protection, ensuring that brokers can deliver quality and strong customer outcomes. To maximise the impact, Choice also invests heavily in broker training.
“Harnessing the customer data collection, categorisation and provision functions of a CRM system and combining this with the in-depth personal knowledge and the good relationships brokers already have with their clients will, in my view, position brokers well in the future,” says Moore.
Other tech solutions can be used to complement and enhance the effectiveness of a CRM, by streamlining customer communications and reducing the time burden of key tasks.
“The most essential tech tools for brokers are those that help them deliver a faster, hassle-free customer experience. Customer expectations around speed and service are changing, and brokers should embrace this,” says Bertoli.
“We’ve designed tech tools that make the referral process seamless for our partners and their small business customers.”
Prospa’s suite of tools includes the iframe and partner-branded landing pages, which are designed to help brokers reach, and engage with, new and existing customers.
“We know it’s tough running a business and staying on top of all the latest marketing tools. We’ve listened to what our partners need and designed solutions that work for them and their SME customers,” Bertoli says.
Finance is far from the only industry to feel the effects of a digitised workplace. Organisation, collaboration and time management tools such as Asana, Slack and Zoom can easily be adapted to the needs of brokers.
“Time management tools are critical for brokers, and there are some great ones available. If nothing else, take an online course in how to use Outlook to its full potential,” says Bertoli.
While time management and automated approvals can bring huge efficiencies to a broker business, Moore recommends caution when it comes to automating the customer relationship itself
“Automated marketing functions can be a great time saver for brokers in a world where more is expected with less. However, if abused or done incorrectly, automation including EDMs can have disastrous and damaging consequences for a broker’s business by removing the personalisation,” he says.
With so many options and tools on the market, knowing where, when and how to invest in new technology can be the greatest challenge.
Moore says, “Brokers looking to overhaul or upgrade their technology infrastructure first need to take a step back, look at the world around them and then ask themselves, how can I adapt my business and benefit from this change, and equally, how can I ensure that my customers continue to receive the best possible outcomes?
“Professionalism is about putting the customer first and designing a business process around target outcomes,” he adds.
O’Donnell advises that, ultimately, the aim of any tech investment should be to bring the broker closer to their customer while supporting the growth of the business.
“It’s important to think about what you want to achieve, and what matters most to your customers. It’s not about what makes your business most efficient, but rather what technology can enable you to better service your customers’ needs,” says O’Donnell.
In a world where there are more demands for personalised solutions, O’Donnell warns that some technology can actually undermine business objectives.
“While certain tech tools can help you connect with a broader pool of customers, brokers should always strive to maintain a personal touch and should avoid anything that could potentially compromise their customer relationships,” he adds.
While it can be tempting to rely on email, Skype, Facetime and phone calls to get a deal done, O’Donnell says brokers shouldn’t underestimate the importance of coupling this with face-to-face customer interaction.
"Going the extra step to build a good rapport and relationship with customers can make all the difference. I’m a firm believer that a broker’s success comes from their ability to build and maintain strong professional relationships, and the last thing you want is to make customers feel like a number,” he says.
A combination of general and specialist tech solutions can meet the needs of almost every broking business, but there are still those who wish to create their own tools and solutions.
Sometimes this is because the broker can’t find the tech they need in the marketplace; other times it’s because they wish to diversify from their business’s core function to package a bespoke solution for the wider industry to utilise.
For example, Scott Durrant, the founder and director of Successful Ways, developed Alexus CRM, a system that uses live data to give brokers an edge over the banks. While the near decade he spent developing the system would push many to give up, Durrant was confident about the value that could be achieved with his bespoke CRM. And he was right – in the last financial year he reports that he settled $104m in half the time it would have normally taken.
Alexus CRM can now be adopted by other brokers on a subscription basis, and even tailored to the processes of individual brokers and their firms.
However, the create-your-own approach isn’t always advised. “Today’s CRM systems are highly versatile and can be integrated with a range of other systems, so before embarking on a custom-designed solution, brokers should check with their aggregator to determine whether the technology solutions offered can be tailored to meet their needs,” says Moore.
Bertoli echoes similar sentiments, saying the hard work has already been done by specialist tech firms, so there is only one investment brokers should worry about.
“Now more than ever brokers should consider investing in their cybersecurity. Many brokers don’t think of themselves as vulnerable to cyber threats, but small businesses are actually a common target,” he says. “Research from Chubb found that 60% of SMEs had experienced a cyber incident in the last year, so ramping up security is key.”
“Many brokers don’t think of themselves as vulnerable to cyber threats, but small businesses are actually a common target” Beau Bertoli, joint CEO and co-founder, Prospa
The customer is always connected
While technology has developed rapidly over recent years it’s consumer-facing tech, rather than the high-level systems that run in the background, that have revolutionised how we navigate and interact with the world.
However, the instant feedback loop of social media, next-day e-commerce shipping and even streaming services have rewired people’s ability to simply wait for the things they want. That has drastically changed service expectations and, as a result, we now want – and in most cases need – immediate solutions. Those who provide anything less are second best.
Meanwhile, the broker can only be as efficient as aggregator and lender systems allow, and investing in bespoke systems won’t necessarily provide an edge for their business.
Couple these trends and, until we know what will trigger the next big change in consumer behaviour, it’s difficult to predict where service expectations and, as a result, broking, will go next.
However, what can be considered a given is that service, personalisation and delivery expectations will continue to evolve as 4IR tech reaches further into our lives, bringing conveniences and solutions we didn’t know we needed.
How the third party channel leverages that will define its role over the coming years. Enhanced compliance certainly presents a strong case for more regtech-based solutions, and the utilisation of data will also be paramount. On the rest, time will tell.
Deloitte’s 2019 Tech Trends report predicts that cloud computing will evolve to automate key tasks, servers will become redundant, and AI will soon be making data-driven decisions for businesses in all sectors. Such high-level changes are unlikely to transform broking right away, but their impact will be felt over the coming years.
Whatever the future holds, the need for people to access finance in order to live their lives or keep their businesses ticking over is unlikely to abate and, in order to deliver on that need, the only connection a broker requires is a personal one.
As Moore says, “The broking industry continues to go from strength to strength, and this can be partly attributed to brokers’ abilities to forge long and lasting personal relationships with their customers, who value the advice they receive.”