A motto for life

by AB02 Aug 2018

Owen Joyce, chief commercial officer at CashDeck explains why brokers need to change their tune

Like many brokers, you’re probably finding it challenging helping your clients access credit these days. Over the last couple of months, CashDeck has spoken to countless brokers, attended many industry events and stalked the online comments. The frustration is palpable and the concern is clear: scenarios that were once easy are now difficult, everything is taking longer, and every case is completely uncertain.

So here’s the thing. Unless you’re planning to leave the broking industry altogether, you’re going to need to find ways to improve the outlook for your business. As is the case in every business and every industry, there are things you can control and things you can’t, and in this case tighter lending criteria is here to stay, so there’s no point trying to turn the tide.

One area where you can potentially make a difference is consumer attitude. Most of us in the industry know what’s going on, but most of those outside of it have no idea.

It seems ludicrous, but the other day I spoke to somebody who hadn’t even heard about the royal commission, let alone kept ahead of its developments. So it’s little surprise that many consumers have no idea about the stricter lending policies currently being implemented and what these mean for them personally, the wider lending landscape and, crucially, the brokers of these loans.

The average person on the street is blissfully unaware of what is happening behind the scenes and will continue to be so until the time comes when they want to borrow. Only then will they realise that you can’t spend like a drunken sailor on shore leave and expect the bank to pat you on the back and open its coffers.

The average person on the street is blissfully unaware of what is happening behind the scenes and will continue to be so until the time comes when they want to borrow

So, if we know what lenders want, why don’t we, as an industry, educate consumers on what’s happening and help them prepare? As the old saying goes, “you can’t fatten the pig the day before market”. However, since consumers who are planning to borrow are often motivated and will take instruction on how to get into shape financially, maybe that’s the most obvious opportunity?

Perhaps the new motto our industry needs to propagate is “Learn to live with a loan before you get a loan”. It’s simple, it makes sense, and it gets people thinking ahead of time. It sends a clear message that you can’t expect to get credit if you’re not prepared to demonstrate that you can tighten your belt to afford it. Give consumers tips, tools, advice and strategies on how to be ready for the lender and the process. If enough consumers have been educated on how to meet the conditions, then the new tougher lending criteria won’t pose such a problem after all.

Some brokers are doing this already, and we should give credit where it is due. For those firms that have embraced this change, it has been part of their lead nurturing strategy and DNA for a long time. That isn’t to say they don’t still find the new conditions tougher; however, the practice of helping clients prepare in advance means these firms continue to have a steady stream of bank-ready clients who have their ducks in a row, so to speak.

Lead nurturing must evolve and move beyond the basic database email blasts containing cash rate announcements. To make it work, there needs to be investment in doing it well and giving both current and potential clients the tools, advice and information that will make them take heed. While it feels painful at the moment, in the long run we end up with a stronger industry and a significantly higher proportion of borrowers who can comfortably afford their mortgage repayments.

Owen Joyce
Chief commercial officer