COVID-19's lasting impact on broking

by Madison Utley06 May 2020

In a webinar broadcast yesterday, Loan Market executive chairman Sam White addressed the rapid digitisation of the past six weeks, explaining how the industry has changed and why brokers should embrace the metamorphosis with excitement rather than dread.

“Over the last couple of years, we’ve seen the extra work that’s come from all the new regulation. Typically, that’s been in the form of layering more paper onto a broker. The amount of work that a broker needs to put into a file has grown dramatically,” White explained.

“There’s a chance now to put a full stop to that and say, ‘Look, there’s a better way’ and start to reimagine what that customer experience could be other than just signing some more forms.”

Abolishing the “paper choke points” which have been built into the industry through the adoption of digital signatures and verification of identity technology has happened in mere weeks, rather than the 12-18 months lenders were previously forecasting.  

Further, the transition from face-to-face interviews to video calls opens up a “huge amount of opportunity” for brokers to expand their customer base beyond their geographical area, while the move away from cash will create bank records that much more accurately reflect spending habits.

Expense analysis, “the bane of so many brokers’ existence” over the last 18 months, is set to become much easier and “give a new power” to the channel.

“We’re seeing turnaround times improve because with the better digital interaction with customers, we’re actually seeing a better file created. Therefore, lenders can assess that deal faster,” said White.  

“I think the more we can create better files for the lenders, the faster they’re going to be able to make decisions. We’ve seen that happen already.”

The key change, however, is in the new level of collaboration with customers, according to White.

"Clients want to be involved in this process. They want to engage the broker around the experience and around the recommendations. They want to be involved rather than just have this happen to them," he said. 

“This ability to put together a loan, giving the customer transparency and visibility, working together to act in the customer’s best interest, I think that’s a trend that we’re seeing more and more across lots of different industries."

“As such, we need to be more sophisticated in our communication and interaction with customers. That’s a trend we’ve seen emerge quite strongly over the last six weeks…how to provide relevant content, not just broad-based broadcasting, but relevant information based on a customer’s segmentation and demographic."

The new level of real-time interaction and ongoing relationship with customers serves as an irrefutable defence to one of the most common attacks against brokers.

“When questions arose around our remuneration structure when ‘all we had done was get the deal together’, we’ve proven over the last six weeks with COVID that that’s not the case. We’re there for customers in good times and in bad,” said White.

While brokers may not have always communicated the extent of the work that went into providing their customers with an answer, they now have a digital "evidence trail" to point to as proof. 

Perhaps most importantly though, White made it clear that technology will never replace brokers.

“Digitisation doesn’t change what we do. This doesn’t change our DNA…at the heart of this lies great outcomes for customers,” White said.

“Brokers’ key role is giving their customers confidence they’re making the right decisions. A digitally-enabled broker, their skills, the knowledge, the customer-focus they bring, together with an empowered customer who understands a lot about their situation and what’s available to them, delivers a better customer experience.

“Don’t be afraid of this move. Everything you brought to a customer five years ago, two years ago, last year, it’s ever-more important to the customer today. As digitally-enabled brokers become more ubiquitous, the differentiator will continue to be what’s differentiated us in the past, which is that fundamental value proposition that we provide.”