Fintech to help consumers be their own broker

by Miklos Bolza16 May 2017
A new platform is soon to be launched that uses technology instead of a mortgage broker to help consumers find the right home loan.

The fintech, Hero BroKer, aims to give back to the consumer by giving them access to the complete home loan application process.

“By providing the right tools and technology to the borrower, we let them control their finances so they’re not reliant on a broker. They effectively become their own broker,” Clint Howen, founder of Hero BroKer told Australian Broker.

The Hero BroKer model is similar to other tech players such as Airbnb, Howen said.

“Airbnb looked at a sea of houses. They built a platform that enabled everyone who had a house to be the hotel, instead of trying to be the hotel themselves. They’re the biggest hotel in the world and they don’t own a single property.”

Hero BroKer takes the borrower through a number of steps before they obtain a loan, ensuring that each loan is put through in the right manner. Onsite videos are also provided, giving the borrower a full breakdown of various topics.

“For instance, if they want information on a feature like an offset account, a little information icon goes to a video which explains what an offset account is, why would you use it, etc.”

The more details the platform receives from the borrower, the more honed the final home loan list will be, Howen said.

“They go through those steps and only get shown the loans that match their criteria. Instead of having hundreds of loans like on a comparison site, you’ll only see four or five.”

The idea was born after Bowen had a poor experience with a mortgage broker and felt there was a gap in the industry which needed to be filled.

“Instead of being a mortgage broker or a broking business, we want to be the largest financial broking platform in the world while not hiring a single broker. We want to let the consumer broker their own loans.”

Those using Hero BroKer will be paid a certain percentage in gift cards with the firm also taking a small amount. There is no trail or upfront paid in this case, thanks to a new agreement negotiated with the banks.

“We’ve gone out and talked directly to the banks while building our software in the backend,” Howen said. “So we’ve got completely different agreements to what a broker would have with how we get paid.”

Nevertheless, this still provides an incentive for those who want to apply online with rewards ramping up the more the consumer does through the platform.

“That reward is not going to be a cash injection. It’s something they can spend at over 60 different retailers in Australia at all the major brands. Yes, it’s money but it’s not going to be a hard cash injection into the bank account.”

The exact percentage around Hero BroKer’s customer incentives is still being discussed ahead of the product launch, Howen said. Confirmation of the date of the second launch is also in the pipeline, he added.

The company previously faced backlash from the broking community at its initial launch last year. Although initially signing up with AFG, all four major aggregators eventually refused to sign deals with the fintech firm.

“There were discussions made. I sat with a managing director of an aggregator who told me to my face, “We met up with other aggregators to discuss Hero BroKer and agreed this wasn’t something we wanted to get involved with.’ That raises a lot of questions around why that decision was made.”

While the banks themselves are open to new fintech disruptors, Howen acknowledges that they are worried about upsetting the large mortgage broking groups who may be threatened by these sorts of tech firms.

“Although the banks are open to new ideas, it’s a risk to do something that will piss off the mortgage broking industry,” he said. “That’s understandable because it is a risk.”

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