Non-banks are the future of banking

by Rebecca Pike05 Jul 2018

The future of banking is in the hands of non-banks, says specialist lender Liberty.

Non-banks, by nature, are “active, nimble, innovative and relevant”, allowing them to lead the competition, rather than be threatened by big banks.

Non-banks provide a variety of solutions such as home loans, car loans, personal loans and business loans, as well as custom lending for those that need it.

But as the financial world welcomes more and more technology, and increased regulation drives up costs, it leaves many to wonder how non-banks will respond to these changes.

Asked about how non-banks will adapt to the future, group sales manager at Liberty, John Mohnacheff, laughed: “How are banks going to adapt? That’s the question.

“Non-banks have adapted by creating a market for ourselves. It’s the non-banks that lead the way in our industry and it’s the banks that have to follow.

“Innovation will come from the non-banks, so I see a wonderful future, whatever form that takes.

“You’ve also got the emergence of fintechs, which are helping to create cheaper, faster, better ways to enable positive customer transactions. This innovation forces big banks to change the way they operate.

“They realise they’ve got to do it, but the non-banks put the pressure on because we can embrace and deliver it faster. Most non-banks are smaller and more agile. We can react more rapidly.”

While the banking industry waits to see what the next 12 months will bring, Mohnacheff reassures brokers that non-banks will continue to provide competition for the banks and more choice to customers.

He explains: “The potential of non-banks is limitless. It’s wonderful how much we’ve grown in such a confined space. And we’re not going to stop, no way, we’ve got amazing opportunities.

“Our priorities are to keep giving brokers more choice. We will continue to develop smarter solutions to ensure brokers have the best tools to support more customers.

“If brokers want real competition, real innovation, real choice, real time product evolution, it’s not going to be delivered by the banks. The banks say they do, but when you really challenge them it’s a tweak to this or that. It was the non-bank sector that pioneered innovation in the home loan market.

“Support the non-banks, their services and products, because we will continue to innovate and help brokers serve more customers.”

 

Related stories:
Lender slams "myths" around custom lending
Scrutiny and rework increase processing time
SMSF lending: great opportunity for brokers