Better Choice executive director Allan Savins says the Australian mortgage market is in for further disruption if overseas trends are anything to go by. With the pandemic changing the way the world does business, brokers need to be quick to adapt to technology and changing consumer habits while offering broader solutions to clients. MPA spoke with Savins about the changes that are in store for Australian brokers and why Uber is a good example to consider.
Social distancing has become the new normal
COVID-19 has meant a dramatic shift across countless industries in Australia; mortgage broking being no exception. Brokers have had to quickly come to terms with video conferencing and virtual VOI – something that won’t be changing any time soon, says Savins.
“I believe social distancing will be with us for the foreseeable future.”
“Not only will this impact VOI policies, but more importantly, the way brokers interact with clients.”
Communicating via video call is quite a different kettle of fish to what most brokers were used to before COVID, the ramifications of which extend much further than technical know-how.
“The ability to sell over the phone or via video can involve a different set of skills than the traditional method of face-to-face interaction.”
This change will be a silver lining for those quick to adapt, says Savins, as it enables brokers to use what would have previously been commute time in order to create better efficiencies.
Overseas trends in a shifting market
There is much we can learn about the shifting mortgage industry by looking overseas, he says.
He adds there are banks in other countries using facial biometric matching and location tagging while many countries have seen a surge in new lenders and FinTechs.
With millennials expecting faster and more convenient ways of doing things, it is up to brokers to stay abreast of change.
“Some online lenders in the US actually charge more than the average bank branch as there’s a premium attached to ‘shopping in your pyjamas’.”
“There are also many countries now where open banking has been implemented, which means more solutions must be offered by brokers, not just the mortgage.”
The changing role of a broker
With growing options available for the consumer, brokers should position themselves as someone who can offer a wider spectrum of services around the financial needs of their clients.
“Brokers need to be delivering broader solutions as they are the central hub of a special relationship other industries rarely gain and should cherish that.”
“By securing this trust brokers need to explore, invest and deliver high quality trusted solutions in gaining a greater share of wallet by cross selling or referring other services to diversify their businesses and revenues.”
“Being aware of these changes, which are almost certainly going to cause significant disruption to the mortgage broking industry, will be key to ongoing and long-term success.”
The future of systems and processes
For some time, the internet has been a vital tool for brokers to generate leads and educate clients, but according to Savins, this is evolving to incorporate the process of lodgement – without necessarily the involvement of a third party
“Gen Ys and Zs, who are very comfortable interacting via social media, will soon become borrowers who will be relaxed to apply for a mortgage over the internet after doing their research through social media.”
“Brokers will need to be a ‘change agent’ and embrace these mediums to generate leads, retain clients and compete.”
“With open banking now upon us, brokers can no longer be a ‘transactional, set and forget operator’, but a ‘service orientated, client for life broker’.”
When it comes to staying on top of the game, Savins says education is crucial. With a vast array of resources now online, he recommends participating in as much training as your diary will allow in order to future proof your business.
“Brokers should look towards Uber as a good example of what a technology disruptor can do to an established market.”
“Uber are now the largest taxi company without owning any cars.”
“They have achieved all of this via a mobile phone App and we need to be prepared to work differently from our competitors.”