Brokers are leading customers away from the Big Four, says research

by Mike Wood22 Nov 2021

New research has suggested that the broker channel is increasingly taking customers away from the Big Four banks and towards non-bank and challengers – and that clients are rewarding them for it.

MyState Bank’s survey into broker and customer behaviour has revealed that 86% of customers were comfortable about being offered a non-Big Four home loan.

The tech breakthrough that has been seen in the last 18 months was also highlighted, with 80% of customers now comfortable with an entirely online lending process.

READ MORE: Here’s how brokers can get paid commission on the day of settlement

In turn, the diversity of lenders and loan application processes that are on offer in the third party sector has seen brokers rewarded by huge customer satisfaction numbers, with 91% of survey respondents saying that they would recommend using a mortgage broker.

“Brokers are turning outside the Big Four, as evidenced in the MFAA data as well as that from the aggregators,” said Huw Bough, general manager bank at MyState, who commissioned the research.

“The reason is that the customers are turning away: they’re wanting to go to a broker for choice.”

“In a lot of ways, the customer looks at the Big Four like a slice of white bread: they’re boring, and something that their parents and grandparents used. Today’s customer is looking for an experience, and they’re open to challenge banks that provide a tech first solution.”

“The smaller players have to hold greater capital requirements against their loans than the Big Four do, so the Big Four have a competitive advantage.”

“What you’re not seeing them do is invest in better customer experiences through the broker channel: if you look at the Net Promoter Score (NPS) across the Big Four, it is improving but they’re generally between a net negative and a maximum of +14.9. Look at the likes of MyState: we’re +45. We’ve got brokers promoting MyState at a +80.”

“The critical piece to pick up on is that if it wasn’t for brokers providing choice outside of the Big Four, there wouldn’t competition and, if you look at the competitive advantage that the majors have from a capital perspective, you’d have to say that they are in a great position to invest and improve the customer and broker proposition.”

“You see lenders like MyState invest heavily in tech. We were one of the first to adopt ApplePay, we’ve got Open Banking, we’ve got all the solutions, if not more, than what the majors have.”

“Brokers have always put the customer first, and this data is a reflection of that.”