COVID-19 has completely changed the mortgage broking industry – from one based on face to face interactions, to one ruled by the digital domain. But will it stay this way once social distancing measures are a thing of the past?
MPA spoke with some industry players to find out what the new normal will look like for mortgage brokers moving forward.
How brokers will interact with clients
Peta Siebert is the managing director of Avenue Financial and a MFAA mentor. She has worked in the finance industry for almost 30 years and says change has been one of the biggest challenges facing brokers in more recent times.
“Like everyone, we were forced to change our process to be 100% non-face-to-face,” she says.
“Clients liked the extra physical contact and initially struggled with the change, however, as everyone became more comfortable with systems like Zoom and Teams, interacting with our clients has become a lot easier.”
Once the pandemic is over, Avenue Financial will keep the option of video conferencing alive for clients who prefer it – however, it won’t be a complete replacement for physical interaction.
“I don’t think we would ever convert to 100% non-face-to-face business. I do however think we will move more to a 50/50 position for new clients and possibly an 80% one for existing clients,” Siebert says.
“It allows the client and broker greater flexibility with when suits them to meet and reduces the downtime for the broker when they’re on road driving.”
Flexibility for staff to work from home
According to managing director of Intuitive finance Andrew Mirams, his business was already using video call technology to connect with some clients before the pandemic hit.
“No-one deals in just their local neighbourhood,” he explains.
“My team has a wider reach and that makes it difficult to see everyone. It means you can interact interstate and we’ve got a number of clients overseas as expats. We’ve always been able to do things that way.”
The bigger change for Mirams and his team during COVID-19 has been the transition to working from home.
“For the first two or three weeks everyone was remote,” he says.
“That has its challenges because it’s not normal. We’re human beings and human doings so we need to be around people, we need to interact.”
As every crisis creates an opportunity, Mirams says the pandemic has forced the company to adopt a more digital approach and move everything to a paperless system.
“At the end of all of this it will give us some opportunities where some people may work at times from home or may have two or three days in the office,” Mirams says.
“We’re going to be fairly fluid in our thinking about what it looks like going forward.”
Now that social restrictions are easing, the team are moving to a four-day fortnight whereby they are split in half and take turns working at the office. Thorough cleaning takes place between each group to ensure staff are protected.
Educational content will be a blend of virtual and face-to-face
Managing director of the FBAA Peter White AM says the industry body has completely changed the delivery of educational content due to COVID-19.
“All of our content is all done digitally through webinars,” he says.
“We’ve had fantastic engagement with our members in this manner in that the amount of people we’re reaching now that are attending is higher than when we were in a face to face mechanism.”
While these platforms allow for interactive engagement in that attendees can ask questions or raise issues, the mode of delivery isn’t quite the same as having physical contact.
“We find the content delivery and engagement isn’t lessened when it’s done digitally, but there’s a lot of other benefits that come when you get to meet face to face,” White says.
“It’s that physical interaction with your peers. It’s the reason why, when we do our national conference, we do it in one place, on the Gold Coast at the same time every year. We get about 1,000 brokers together just so that to reunite the family, if you like.”
When social distancing restrictions are a thing of the past, the new normal for the FBAA will be a blend of digital content and physical interaction – a balance White anticipates for the mortgage broking industry in general.
Tech savvy aggregator will still offer face-to-face
Aggregation manager at Specialist Finance Group Blake Buchanan says SFG’s adoption of cutting-edge tech allowed its member brokers to work remotely even before the pandemic hit.
“Our system SFGconnect has been COVID ready for years, with in-built web conferencing, client and document portals as well as VOI capability already available,” he says.
“So from a broker system perspective, our brokers already have the tools available to work in isolation, maximise efficiencies and remain compliant. “
He says the group developed a weekly web series in response to COVID and ran digital PD days that combined lender video content with live panel discussions.
Moving forward beyond the pandemic, SFG will offer a balance of digital content and face to face sessions.
“Whilst some travel will no longer be necessary, it will be a long time before there is a substitute for good ol’ face to face meetings,” Buchanan says.
“As an aggregator, we will combine some of these digital delivery strategies to complement our existing calendar of training and events but not replace it as there are just some things that can’t replace physical human interactions.”
The new normal is full of opportunity
According to Mirams, after COVID-19 is over the industry will by and large go back to the way it was before.
“People don’t want to go to an awards night online,” he says.
“The reality is conferences will all be open once it’s good and safe to do so. Everything will go back to what it was but it will be slightly different – like every other change you come out of.”
Siebert says the new normal could involve some interesting changes in the way some lenders operate.
“I think we’ll see the existing landscape of banks changing, with some branches becoming specialised and using mortgage brokers as a conduit for their loan products,” she says.
“We’re already seeing more cloud based online lenders entering the market. These online lenders are just another option available to the client and show traditional banks and brokers that face-to-face lending is not required or wanted by all clients.”
She says this strengthens the need for brokers in the market as key players who can offer greater flexibility in screen-based client interactions as well as more options to suit the customer’s needs.
White says the flexibility and efficiency that tech has helped to enable during COVID-19, as well as the implementation of best interests duty, will see a greater market share of broker originated loans.
“I see that brokers will take up to 70-80% market share over the coming years,” he says.
“I think we all need to be very bullish and very positive about the future of mortgage broking in Australia.”
Buchanan agrees that the market share of brokers will increase after the lockdown and that BID will further this growth.
“The increase will be on the back of not only the extraordinary broker offer but because clients in isolation have prioritised their finances as they navigate uncertain times and are turning to brokers for a broader solution,” he says.
“As more and more Australians try a broker for the first time, they will wonder why they didn’t engage one sooner.
“The future of broker is an elegant combination of personal touch combined with cutting edge technological client engagement.”