A credit decision in one day

Competition – it’s a fundamental factor in helping brokers deliver the best products to their clients in the quickest amount of time. But it’s not just competition among retail lenders that is driving better consumer outcomes at the moment, according to head of Connective Home Loans Michael Goerner. He told MPA the aggregator white label brand has been able to deliver consistently rapid turnaround times because of competition among its five funders.

“We hold all our funders accountable for the turnaround times and it’s really a sense of competition,” he said. “That’s really kept the funders on their toes.”

The latest offering, Bluestone-backed Connective Elevate, regularly appears as one of the top 10 lenders with the quickest time to unconditional approval in Connective’s Lender Turnaround Dashboard. It also delivers a turnaround time to credit assessor decision in just one day, said Goerner.

Read more: Connective showcases lender approval time dashboard

“With best interests duty it’s a real consideration - especially if a transaction is time critical,” he said. “The quicker you can get a customer out of the market and comfortable with the solution that you’ve provided, the less likely that customer will start shopping around somewhere else, whether it be through another broker or through a retail lender. Getting a customer out of the market and providing a solution as quickly as possible is a real solution to a broker’s business.”

He said white label products were an important part of a broker’s toolkit because they provided a point of difference that a broker could offer beyond the familiar brands in the market, but that not all white label products could deliver the same range of benefits to customers.

“If you look across all of the aggregators, probably ourselves and AFG are really unique in that we have a really broad offering with multiple funders,” he said. “A lot of the aggregators will just have one funder that they exclusively use. So, it’s probably a smaller segment of the market that they appeal to.”

Just as supermarket branded items have increased in popularity in recent years, so too has the white label lending product, he said.

“Selling white label now isn’t what it was like three years ago,” he said. “Consumers are more familiar with it, they are more comfortable, they trust it and they expect to be offered it.”

Read more: White label: Here for the long haul

The Elevate product replaced the retail offering of Bluestone on Connective’s panel last year and has seen a 200% increase in application volumes since. Goerner said he foresees a strong future for white label products in the industry, likening the phenomena to the uptake of Aussie Home Loans in the 1990s.

“At that stage, even though the rates were really cheap, it took about two years for consumers to understand that it really was a great offering and it was a whole lot cheaper than the banks,” he said of Aussie. “It wasn’t until those early 90s when the majors realised they had real competition.

“They had good solid alternatives to the banks and the banks realised they needed to compete in it (the broker market). Even though the rate differential is not as much, we’re going through that history again. Banks, they’ve got their retail outlets, but brokers are finding that it’s better to provide something that’s different to what’s out there in the market because it does make them stand out.”