A new report has revealed a changing banking landscape with less emphasis on branch presence and more on third party broker channels.
The J.P. Morgan Australian Mortgage Industry Report was released last week and it showed that ANZ has been steadily reducing its branch presence since 2011 so it can increase its broker usage.
Yellow Brick Road’s head of lending Tim Brown has come out to back the report, saying it shows that brokers are the future of the mortgage industry.
The report found that brokers are likely to capture an increased share of the market, with 75 per cent of refinancers expected to use brokers.
Mr Brown spoke to Australian Broker and gave his thoughts on future trends in the industry.
“If we look to trends overseas, a move towards utilising brokers for a larger percentage of lending has already been happening for some time,” he said.
“In the UK, 76% of loans are done through a broker and 87% of the actual loans are through mutuals, building societies or regional banks.”
“That same trend is now beginning here as banks realise old ways of operating aren’t working.”
“In this day and age, people want to have access to service providers outside the typical 9-5 business day. Our brokers at Yellow Brick Road and Vow Financial don’t work limited business hours, they are driven to take care of the customer’s desire for convenience and that means being flexible with the time and place that suits the customer’s needs,” he said.
“Brokers also have a small business mentality that banks just can’t compete with. They are integrated into their communities in a way banks can only pretend to be. They work harder because that way they build a reputation and make more money.”
“Running the bank’s capped income model is never going to be as popular with consumers long term as the alternative of a broker who is incentivised to give better service, work longer hours, bring more customers in and provide customer-centric service.”
Research organised by Deloitte last year found that more than half of mortgages written are going through a broker and predicted this trend to continue and indeed grow to somewhere around 60 per cent.
“Hearing that one of the big four is forgoing its branch presence in favour of a greater emphasis on the third-party broker channel reinforces the increasing consumer popularity and effectiveness of brokers,” Mr Brown told Australian Broker.