Report shows low expected benefit of commission

by Rebecca Pike29 Jul 2018

In a recent report on the mortgage market in 2018, only 10% of a roundtable of lenders and broker groups felt the royal commission would give a benefit to consumers.

As part of its Australian Mortgage Report, Deloitte held the roundtable to look at what might be affecting the mortgage market this year.

Representatives from HSBC, Liberty Financial, Police Bank, Bank of Queensland (BOQ), Westpac, ING, Suncorp, CoreLogic and Smartline were joined by some of the team at Deloitte for the discussion.

One question posed to the team was, ‘What will have the most benefit for consumers from the current regulatory and political focus on mortgages in 2018?’

Thirty-five percent of the group said that the biggest benefit would come from the Australian Prudential Regulation Authority (APRA) reducing capital level for limited banking licences.

Just 10% said the royal commission into banking misconduct would benefit consumers and only 5% said the potential for APRA to have greater regulation on non-bank lenders would benefit them.

In the discussion on this subject, Adrian Buckley from Suncorp said, “I’ve noted commentators observing that previous Royal Commissions in various sectors often have tended to result in findings around culture and processes, but with little ending up in actual legislation. So it will be interesting to see if this Commission has a greater impact into direct legislation.”

Melanie Evans from ING said, “I think consumers will think there is a benefit. From their perspective with everything that’s gone on, they will expect a benefit.”

Discussing the limited banking licences, which was agreed to be the most beneficial focus, James Hickey from Deloitte asked, “Are we seeing the potential for the neo-banks to really leverage that and come into the market?”

Adrian Buckley from Suncorp said, “It might be in the next 12 months. There are certainly a lot of start-ups seeking to build to scale and then get absorbed.

“It will be interesting to see the innovation they drive in their origination processes. Tic-Toc is an example.

“It’s interesting how the technology pieces have been stitched together to create an experience which is different to what you would go through if you went direct to an ADI (Authorised Deposit Taking Institution).”

 

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