Non-major bank panel discussion pt. 1

Non-major bank representatives discuss processing improvements they’re implementing to make brokers’ lives easier, as well as how they can challenge the majors for market share through the broker channel.

To watch the 2nd and 3rd part of this Panel Discusion, click on the links below:

Mortgage Professional Australia - Non-major bank panel discussion pt. 2
Mortgage Professional Australia - Non-major bank panel discussion pt. 3

Video transcript below:

Robin Christie, Managing Editor, Mortgage Professional Australia Magazine
Robin Christie:
 And welcome to MPA’s non-major bank lender panel discussion and it’s great to have over here.  We’ll get straight on with the questions.  So I will start at this end of the table with Stewart.  First question off is what advantages can non-major banks offer to brokers and their clients over the major banks?

Stewart Saunders, National Broker Manager, ME Bank
Stewart Saunders:
 I think what non-majors really provide to brokers and their customers is innovative products.  You know that’s able to drive competition within the market.  So while brokers may not benefit directly from every loan that they put to a non-major, we are sending increased competition across the market that non-majors are driving.

Robin Christie:  Jarrod are you seeing increased competition as well?

Jarrod Cahill, State Manager for VIC/SA, Bankwest
Jarrod Cahill:
 Oh absolutely, I think it’s a really exciting time to be a part of it.  We are all looking to differentiate in some way or another and for brokers I think that creates an element of choice and for the consumer that ultimately is the benefit.

Robin Christie:  And Glenn what’s it for AMP

Glenn Gibson, Head of Sales and Marketing, AMP Bank
Glenn Gibson:
 Regarding this issue, if you go back 10 years the non-majors were almost competing amongst themselves.  They would ignore the majors and just go after each other’s self respect and I think, where the change in non-majors now is we go toe to toe as much as we possibly can, wherever we possibly can, so we’ll try something different, we’ll bring out a niche or bring out some, it will be change in credit or might change in product, might be change in price, but it is not necessarily aimed amongst ourselves anymore.  It’s more so I do a watermark and I think we are all seeing the benefit of that.

Robin Christie:  And Clive what are your thoughts?

Clive Kirkpatrick, Mortgage Broking General Manager, St. George Banking Group
Clive Kirkpatrick:
 Yeah, I think it’s for us it’s interesting that, so there is St. George brand in New South Wales and BankSA brand in South Australia we actually operate as you know, we think one of the majors and then we play in different markets under the St. George brand in Queensland and WA and the Bank of Melbourne in Victoria.  So we need to work a lot harder with our brokers that we are, if not first choice then you know a sound alternative and I think to pick up on the guys are saying, you’ve got to actually work hard to make sure that your products are there to provide the choice to the broker.

Robin Christie:  And Ray what are your thoughts?

Ray Esho, National Sales Manager, ING Direct
Ray Esho:
 Yeah the, you know the crisis period caused a lot of funding issues obviously and I think whilst we can’t get too complacent about risk appetite having returned and things having normalised, I think small lenders and non-majors more broadly are able to get back into the game.   So whilst we are not on the trajectory that we would have been on, had it not been for the crisis period, I think things have normalised.  So that coupled with the fact that by virtue of being  a smaller organisation than the majors we can be quite nimble and be able to turn things round a lot quicker than what the majors can.

Robin Christie:  Our next question is, how the non-major banks can challenge the majors for a larger share of the mortgage market, obviously in this forum we are talking about through the broker channel?  Any thoughts Clive?

Clive Kirkpatrick:  Thanks Robin.  Yeah we have found, we are talking about innovations, so we tried to look at niches from a product perspective, around self managed super, non-resident lending, our common debt reducers.  So we are looking at niches where we may excel through innovation.  The other piece is around innovating through technology.
So making it easy for a broker to get access into the business.  So for example, we have introduced the supporting docs online as part of the application process which means that we just get cleaner deals in quicker, get a quicker turnaround time.

Fons Caminiti, Senior Manager for Broker Distribution, Adelaide Bank
Fons Caminiti:
 In our positioning in the market at the moment we concentrate a lot on service, service being turnaround times on processing of submissions from brokers and you know we are talking a lot more to brokers than we have in the past to find out what their needs are.  So for us it really is about staying relevant in the market, so you know one of the things and giving them alternatives to the majors, so you know if we look at what we are doing at the moment at Adelaide Bank, a 100% offset with fixed rates is a real winner out there, we are getting a lot of feedback from brokers telling us, guys that’s what we want from you.

Glenn Gibson:  The way of the non-majors getting business out of the majors comes down to a service, but the service in the way that a broker wants to be serviced, it’s not one thing fits everybody.  It’s simply that somebody it may be price, somebody may be product, somebody may be BDM support, somebody may be credit access, so I think at AMP that’s where our vision is.  So like how do we deliver service, not only to our brokers but to the end customer, the way they want to receive it and  I think the non-majors are fairly nimble in their ability to change from one broker to the other and I think that’s certainly showing in our [rate of return]

Steven Degetto, Head of Intermediaries, Suncorp Bank
Steven Degetto:
 For us it’s continuing to evolve our business and really for us consistency, service consistency is really important and actually proving to brokers, you are a genuine alternative to the major banks, I guess that consistency also helps build confidence and then you can I guess earn the right to ask for a greater share of a broker’s business.

Robin Christie:  Next point, it’s is about back office support and processing.  So we just like to ask, we star with Fons,  how do you think non-majors can compete with the majors on that front, what are the advantages that you have on that?

Fons Caminiti:  Look from an Adelaide Bank perspective, we’ve done a lot of work in that third party mortgage operations space to improve our touch points with brokers along the journey with it from a submission coming into the contracts being issued and then settlement.  And that seems to be having a really good effect.
Steven Degetto:  I think brokers want two things around service.   They want consistency and they want transparency.  So if they are talking to a customer and they say it’s going to take two days, it takes two days, that’s what they want.  Because we ultimately all are an extension for the services they provide.

Robin Christie:  Ray

Ray Esho:  Look on the service front, Stewart mentioned earlier it’s about the broker managing the expectation of the customer.  Not all of us can be lightning fast in our turnaround times and I think that’s fine.  What brokers will tell us is, just make sure that you are not susceptible to volume shocks and I think we are all getting a lot better at that.

Robin Christie:  So what are your thoughts from ME Bank’s perspective?

Stewart Saunders:  It is a challenge that we do face in the back office in terms of the scales of operation as non-majors, the broker channel gives you such a massive point of distribution that when you do have a very compelling offer, the volumes and the ramp up in that volume that comes through is very difficult to deal with, even for the larger of the non-majors to be able to cope with.  You know I think that we’ve seen benefits of the likes of Suncorp in their investment in technology which we all need to take a lead from and look at how we can have technology provide that scale and be able to provide the consistent service there.

Jarrod Cahill:  For us at Bankwest, we see the digital platform as a great way to move forward.  Currently we have got Click to chat which enables the real time response for the brokers rather than calling phone and speaking to a human person.  We have seen that that’s been really good.  The other couple of things we are looking at which we think are really slick, Cofax which is an automated response where the broker can now send through the documentation through a scanned email rather than the old fax, so it is a step forward there and then we are marrying that up with optical character recognition and what that is, it enables the system to read the documentation which is being sent through, removing the human capital validation piece and that allows us to shift some resources into more complex transactions.

Robin Christie:  This is something you have been focusing on Suncorp, Steven.

Steven Degetto:  Yeah, look Robin we have invested really heavily in automated workflow processing.  We also have a flexible work environment for our people as well.  We have a large number working offsite, people working part time.  We find that that’s helped us attract good quality people in our processing area and I think we are one of the only lenders that our processing team are actually some of their KPIs, that’s how they are measured is actually on the percentage of loans that get through to settlement.  So we have got alignment from myself right down to our processing team that we all are aiming to do what we, what brokers want which is ultimately settle more transactions.