Service is key to choosing a lender

According to our respondents, service – as encapsulated in BDM support and turnaround times – is without doubt the deciding factor for picking a lender.

These two categories have occupied the top two spots in brokers’ priorities in the Brokers on Non-Banks and Brokers on Banks surveys for years, and in both 2015 and 2016 the lenders that topped these categories also topped the reports overall – in this case, Homeloans.

If that isn’t enough to convince you, 21% of brokers said ‘more personalised services’ was a reason to pick a non-bank over a bank. As banks tighten credit policies for investors and shy away from non-vanilla scenarios (discussed in our products section), having quality BDMs and credit assessors who can make these decisions in a timely manner gives brokers a practical alternative to present to those clients.

Service may also be the reason for Liberty losing the top spot to Homeloans this year. Both lenders performed impressively across almost all categories, with very similar scores for BDM support. For turnaround times, however, Liberty’s score was considerably lower, and didn’t put the lender in the top three for this category. As discussed in our lender-by-lender analysis at the end of this report, it appears Liberty struggled to deal with a huge influx of business that in many ways represented the fruits of their success.

What the scores for BDM support versus turnaround times also suggest is that while turnaround times can fluctuate considerably, good BDMs tend to stick around. Homeloans and Liberty also excelled in this category last year. This ties into another finding of this survey: that 66% of respondents thought turnaround times had changed in some way(as opposed to 34% who thought they had stayed the same). With 39% of brokers seeing an improvement in turnaround times and 27% seeing deterioration, some lenders have  clearly upped their game – in particular Firstmac – while others have struggled.

In a new question for this year’s survey, we asked brokers how non-banks could improve their service levels, and ambitious non-banks should note that ‘better technology’ was the most popular response. The category of ‘online platform and services’ tends to be ignored but was in fact the sixth most important category for brokers. Moreover, Firstmac – a non-bank that was nowhere near the top in 2015 and has now placed fourth overall – topped the online platform and services category.

Firstmac also did well in the category of ‘Communications, training and development’, as did Pepper in  second place, no doubt aided by the Pepper Insights Roadshow, a series of videos featuring top brokers and online learning modules. Nevertheless, this category was won by the omnipresent Homeloans, suggesting that broker perceptions of ‘communications, training and development’ may be as related to excellent BDMs as much as to individual events and campaigns.

“We simply need a combination of sharp pricing, quick turnaround times in not only credit, but also documentation and settlements” Vic Broker

Other popular ways to improve service were also relatively investment-heavy, including more BDMs and better-trained BDMs. There was one exception: 23% of brokers said a simpler income verification process would improve service. While income verification can be assisted by technology, altering a process can simply require fresh thinking on the part of a non-bank, in terms of forms and submitting paperwork.

Overall, it’s essential to keep in mind that non-banks are doing extremely well when it comes to service. Just 2% of brokers see poor service as a barrier to using non-bank lenders, and 3% poor turnaround, almost negligible numbers, while 21% would use a non-bank because of personalised service.

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