Brokers are likely underestimated when it comes to their share of the Australian mortgage market according to a senior figure at one of Australia’s major banks.
Speaking yesterday at the launch of NAB’s overhauled broker offering
broker channel general manager Steve Kane
said commonly quoted figures likely undersell the flow of business generated through third-party channels.
“We actually think third-party introduction, be it by brokers or referrers or whoever it happens to be, is far greater than the 53% that is quoted in the market,” Kane said.
“It’s probably up in the mid-60% range and the broker channel specifically is probably somewhere between 53% and 56%,” he said.
Kane said NAB believes the broker channel will continue to grow its market share across all areas of lending, not just residential mortgages, in coming years and banks need to realise they will have to allocate more resources to that channel.
“We see it growing and not just in mortgages as well. We see it growing in commercial lending. The reality is the commercial piece is growing faster than the residential piece did.
“We see this market continuing to grow and if more than half of the customers seeking a mortgage in Australia are using brokers and if you’re not maximising your offering in that channel then you’re not doing the right thing by your business or the right thing by your customers.”
NAB said its revamped broker offering, which is expected to be fully rolled out by the end of this week, was a $15m investment and illustrates the bank’s commitment to the broker channel.
“If we truly believe in the broker channel, which we do, then we had to show it," Kane said.
“This is now saying that NAB is fully committed as a bank to the broker channel. There’s always been a suspicion… that we’ve kept the broker channel there on the side and then one day we’ll sell it off. That’s not the case.”