Self-help mortgages pose no threat to brokers: Russell

by Julia Corderoy20 Jul 2016
The rise of fintechs and self-help mortgages do not pose a threat to growing mortgage broker market share, industry leader and managing director of MoneyQuest, Michael Russell, has said.

According to Russell, mortgage brokers in Australia have what fintechs do not: consumer awareness, trust and scale.

“Fintechs by their nature are disruptive to the status quo. They’re already successfully penetrating the UK, US and Chinese markets,” Russell said. “[However] fintechs operate on a significantly lower cost structure than traditional bank and non-bank mortgage providers – and in the longer term this is the concern.

“Over the past decade, almost all new Fintechs have failed. Not because of a technology shortcoming, but because of their inability to generate scalable consumer awareness.”

On the other hand, according to the latest broker market share analysis by the MFAA, brokers originated 53.7% of all new residential home loans settled during the March 2016 quarter – the highest percentage ever recorded by the MFAA.

“Today’s Australian home buyers are very discerning and well researched. They are yet to be tempted to act alone in acquiring a mortgage given the availability of licensed mortgage brokers who provide a quality service at no cost to them,” Russell said.

However, Russell is also warning brokers not to be complacent, or they will risk becoming redundant in the face of technology and innovation. 

“Instead, we need to continue to capitalise on our competitive advantage by improving customer experience and working with lenders to accelerate the timing of consumer outcomes,” he said.

Major mortgage aggregator AFG this week announced a partnership with ASX-listed fintech company, buyMyplace, to help its expansion into mortgage lending. buyMyplace’s main business advocates for consumers to become their own real estate agent. It provides them an online platform to list and sell their properties themselves without having to pay commission to real estate agents.