The mortgage broker channel faces an exciting future as a result of the possibilities of the digital sphere, says the Deloitte Australia Mortgage Report 2016.
In the report, for which industry experts discussed key issues as part of a roundtable, Lisa Claes
, executive director of customer delivery at ING Direct
, noted that the broker channel will continue to be a “stalwart in the mortgage industry”, but believes changes across all financial institutions will come as consumers become increasingly technologically savvy.
“Over the seven to ten years horizon, branch distribution will follow the lead of global banks and diminish as an origination channel as digital distribution increasingly gains ascendency and customers’ digital confidence,” said Claes. “Brokers need to be alert to the attributes which drive customers to digital.”
Also in the report, Luis Orp, COO at RESIMAC, said that 30% of his business is through a digital channel, while Malcolm Watkins, executive director of AFG, also offered his vision of how the digital revolution will affect brokers.
“The big brokers will deploy service centres to deal with digital,” said Watkins. “They may have to incur additional costs associated with the call centre or the service centre fulfilment costs as part of that process. The quid pro quo will be the ability to do twice as much volume. That’s where they can adapt.”
Deloitte’s report, a 40-page study of the mortgage industry, suggests that an increasingly important role for brokers in the next three years will be to serve small businesses, as these are generally regarded as too small fry for banks.
Watkins said, “We expect that the broker channel will play an increasingly important role in obtaining finance for small business on the basis that the banks do not have the resources, or desire, to get close to a smaller client, as the economics do not work.”
Summing up the wholesale transformation of the finance sector, Claes said, “I think there is a tectonic change emerging apart from that precipitated by the Millennials. I see every consumer model shifting fundamentally. The ‘uberfication’ of finance is among us. It may not happen tomorrow, but I think financial services are ramping up to the edge of a steep cliff.
“The broker channel is currently robust, but it needs to pay close attention to what it is about interacting digitally that drives and keeps customers.”