Mandeep Sodhi, the founder of online broker marketplace HashChing, believes technology can enable rather than simply disrupt brokers
Mortgage brokers, in a way, have alleviated some basic problems that plagued the mortgage industry, providing on-demand service, choice and hand-holding during the entire interaction with lenders. However, many unsuspecting borrowers choose to approach lenders directly, thanks to the lack of trust caused by popular misconceptions about brokers receiving conflicting remunerations or being influenced by lender commissions.
In fact, the Australian Securities and Investments Commission this year commenced an in-depth remuneration review to ensure that brokers are putting forth unbiased offerings without being influenced by commissions offered by the lenders. The results are expected at the end of the year, but I think this lack of trust is only the tip of the issues faced by mortgage brokers struggling to make good in the highly competitive Australian home loan market.
What other problems are mortgage brokers facing today?
Apart from customers not really understanding the nature of broker remuneration, brokers incur huge labour costs in engaging and understanding clients’ needs, researching suitable loan options and catering to the often-complex loan requirements of many clients. Add to this the increasing marketing costs of establishing a brand to distinguish them from the competition, disseminating information about the benefits of using a broker, and acquiring leads through paid internet marketing (search engine marketing and social media marketing).
Contrary to the opinion that brokers are overpaid, the labour and marketing costs involved in acquiring, engaging and servicing clients is leading to the reverse. I would, however, like to point out that the customer satisfaction level of broker-serviced clients is quite high, and the number of broker-mediated loans are predicted to rise in percentage terms even though the total number of home loans written may decline over the next five years.
Moving on, another issue faced by brokers is exactly that: ‘moving on’ to sophisticated software, to replace the ancient CRM systems in use for over a decade. CRM systems help brokers manage customer data before and after the engagement, but due to pre-mobile systems in use, brokers have to use multiple systems to procure and manage information on clients, bringing down efficiency and increasing time and costs. We at HashChing aim not only for a transparent, on-demand service and competitive pricing for borrowers, but also set out to solve these issues faced by brokers.
Once brokers sign on to the HashChing platform, they get an intuitive dashboard with all the business tools essential to effectively manage leads through custom reminders, document collection and other digital functions. Brokers save on marketing costs as well. We do not charge borrowers anything, nor do we charge brokers on a per-lead basis; brokers are only charged on settlement, giving them confidence in the quality of leads generated through HashChing and making it a more profitable, efficient and time-effective platform for both borrowers and brokers.
The portal provides real users’ reviews and ratings of each broker, letting their quality of service speak for them, resulting in better leads
HashChing uses technology to drive down marketing costs for brokers by bringing them qualified leads and helping them service clients better through sophisticated technology. With experience, I can point out that key success factors for brokers in the industry hinge on excellent reputation; exceptional client service, keeping clients updated on their loan applications; maintaining a constant flow of leads; and efficient cash flow management. HashChing powers brokers with the latest technology to collect customer information for easy management and updates.
The algorithm and the idea behind it ensure that good brokers are rewarded with more qualified leads by constantly analysing brokers’ behaviour and customers’ reviews and ratings to provide more leads to the most efficient, responsive and recommended brokers. The portal provides real users’ reviews and ratings of each broker, letting their quality of service speak for them, resulting in better leads and heralding a transparent and structured service design that helps build consumer trust in brokers and thus
finally tackles one of the key challenges faced by them.
Mandeep Sodhi is the CEO of HashChing, an online marketplace for home loans that connects borrowers with brokers. It was founded in 2015 and reached $1bn in loans in July this year. Previously, Mandeep worked at Westpac and for other major and non-major banks.