NOVEMBER 2021 ISSUE 18.22
MARIE BOYAGI AND KRISTIAN MCCAUSLAND GetCapital has changed its name to Shift, signalling its transformation from a business lender to a platform provider with technology built for brokers and their clients /14 ALSO IN THIS ISSUE… Caught on camera A look at photographer Peter Secheny’s work for Australian Broker /24 Business update MoneyPlace’s Alf Vasta explains why brokers should offer personal loans /26 Diversifying for business growth Resimac and AMA-winner Empower Wealth on the benefits of diversification /16
Focus on tech empowers brokers Macquarie Bank launches new Broker Portal and Broker Help Centre /18
The rise of Australia’s fintech lenders How fintechs 86 400 and OnDeck are changing the face of lending /20
In the hot seat John Contarino reflects on winning AMA Regional Broker of the Year /30
FUNDING TO PREPARE A PROPERTY FOR SALE Short-term finance NCCP personal or business use $25K - $500K+ funded in 3-5 days No credit check or income assessment
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NEWS
IN THIS SECTION
Lenders Home loan boom drives ANZ’s 72% rise in profit /04
Aggregators Few mortgage holders have refinanced – Aussie study /06
Market Migration to regions leads to rents skyrocketing /10
Industry bodies Fewer bank customers seeking hardship assistance /12
Technology Lenders in race to boost tech, turnaround times /08
GLOBAL WATCH What’s happening in the mortgage, broking and banking world in the United States and Canada? Here’s your snapshot of the news that matters most in North America
GROWTH IN CANADA’S HOME CONSTRUCTION COSTS SLOWS building construction price growth in Canada slowed to 3.7% during the third quarter, slightly offsetting a 7.6% increase in the second quarter, according to Statistics Canada. Overall building construction costs for residential projects rose by 20.3% annually in Q3, the sharpest year-over-year increase since 2018. The urban markets with the strongest price increases were Calgary (34.4%), Ottawa (28.8%) and Edmonton (24.7%). Building supply issues played a significant role in these trends, with a decline in lumber sales in the manufacturing, wholesale trade and retail trade sectors indicating that “the demand-induced price increase for lumber eased in the third quarter”, Statistics Canada said. “Wood, plastics and composites continued to be the largest contributor to the price change for residential building construction in the 11-city composite.” RESIDENTIAL
FANNIE MAE’S QUARTERLY RESULTS SHOW BIG DROP IN INCOME mortgage giant Fannie Mae has suffered a significant income decline over the three months ended 30 September, down from US$7.2bn to US$4.8bn. Fannie Mae said the decline was mainly driven by a $1.7bn drop in credit-related income, and $1.3bn lower net interest income. Overall, its net worth grew to $42.2bn. CEO Hugh Frater said it was a strong quarter as Fannie Mae continues to build capital. “Our results reflect the credit quality of our guaranty book, a growing economy, strong home price growth, and low-interest rates. However … for too many lower- and middle-income families, affordable housing options are scarce, and inequities persist in the housing economy. We look forward to continuing to work with FHFA [the Federal Housing Finance Agency] and others to advance equitable and sustainable access to homeownership.” US
www.brokernews.com.au NOVEMBER 2021 EDITORIAL
SALES & MARKETING
Editor Antony Field
Publisher/Sales Manager Simon Kerslake
News Editor Mike Wood
CORPORATE
Production Editor Roslyn Meredith
Chief Executive Officer Mike Shipley
ART & PRODUCTION
Chief Operating Officer George Walmsley
Designer Cess Rodriguez Production Manager Alicia Chin Customer Success Manager Andi Zbojniewicz
Managing Director Justin Kennedy Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil
latest report revealed a 37.2% year-over-year spike in US mortgage fraud CORELOGIC’S risk in the second quarter. At the end of Q2 2021, about one in 120 mortgage applications (approximately 0.83%) contained fraud – similar to pre-pandemic levels. By comparison, one in 164, or an estimated 0.61%, were fraudulent in Q2 2020. A low mortgage environment and a record volume of refinances made transactions less risky. “Refinance opportunities that surged lending volumes during the pandemic may be winding down. The outlook is for fewer low-risk refinances compared to purchases and cash-out refinances, which translates to a higher-risk environment for fraud,” said Ann Regan, executive, product management, at CoreLogic.
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Dedicated broker and avid runner. Whether she’s running laps of her suburb or doing the legwork for first home buyers – as a Liberty Adviser and avid runner, Anna Nicolazzo is always willing to go the extra mile. She takes the time to guide customers through each step of the lending journey to help them get financial. Keep putting your best foot forward, Anna! Anna, running enthusiast
We’re more than just an aggregator, because you’re more than just a mortgage broker. To find out more about becoming a Liberty Adviser, visit liberty.com.au/LNS. Liberty Network Services Pty Ltd ABN 65 151 158 628 Australian Credit Licence 408042.
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NEWS
LENDERS BIZCAP MOULA JOINS EXPANDS PANEL INTO AT NEW AGGREGATOR ZEALANDFAST MARKET small business lender Bizcap has enjoyed rapid success since its establishment in 2019 and has now expanded across the ditch, launching Bizcap New Zealand. Co-founder Zalman Blachman said the move marked a key milestone in the growth of the business. “Our decision to launch into New Zealand was a relatively easy one to make,” he said. “We’re excited to be able to offer New Zealand SMEs access to business loans within the day.” MELBOURNE-BASED
MYSTATE BANK’S LOAN BOOK SOARS TO $5.7BN has announced record results, with home loan applications up 115% and loan book growth to $5.7bn. The Tasmaniaheadquartered bank also revealed that chairman Miles Hampton will retire at the end of March 2022. He will be replaced by Vaughan Richtor, currently a non-executive director and previously CEO of ING. Richtor, like incoming CEO Brett Morgan, is based in Sydney and represents a further move by MyState into mainland markets.
Shayne Elliott, CEO, ANZ
MYSTATE BANK
“[ANZ’s] Australia Retail and Commercial grew lending and customer deposits during the year and delivered good margin performance across the division” Shayne Elliott CEO, ANZ
4
ANZ PROFITS JUMP 72%, SPURRED BY BOOM IN HOME LOANS Thousands of new home loan settlements and a diversification of its portfolio have driven a huge boost in profits for big four bank ANZ has announced a huge rise in profits, with its net profit after tax spiking by 72% year-onyear. It will pay out $1.42 per share as a dividend, 80% up on 2020. The major bank topped out at over $6bn in profits on the back of a massive 179,000 new home loans settled in Australia alone. Pre-tax profits were steady at $8bn, a negligible change from 2020. The bank said it had been negatively affected by refinancers but still saw lending rise by a total of 11% total. Its turnaround-time problems have been widely acknowledged by brokers, and CEO Shayne Elliott referenced ANZ
loan processing issues in his statement to the ASX. “This year demonstrated the benefits of our diversified portfolio as we provided solid returns for shareholders while also successfully navigating the continuing impacts of COVID-19 on our customers and our people,” Elliott said. “Australia Retail and Commercial grew lending and customer deposits during the year and delivered good margin performance across the division. Home loan revenue growth was in the low double digits. “However, second-half volumes were impacted by a competitive
refinancing market, customers paying down their loans faster, and processing issues. We have been working on a range of improvements, and they are already having a positive impact on processing times.” Elliott said ANZ was able to take advantage of efficiencies and reduce costs to help maintain strong profits. “Our progress in simplifying the business drove down the cost of running the bank for the third consecutive year, and we continue to invest in new initiatives at record pace to build a stronger base for future growth,” Elliot said. “We also managed shareholder capital prudently and led the industry in returning funds to shareholders. “Indicators such as 90-plus days past due and deferrals performed better than expected and reflected our prudent management.”
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NEWS
A G G R E G AT O R S AFG COMPLETES UPSIZED $500M RMBS TRANSACTION wholly owned subsidiary AFG Securities Pty Ltd successfully priced an upsized $500m residential mortgage-backed securities issue last month. This is AFG Securities’ 12th issue since 2013, taking the total paper issued to the market by AFG Securities to $5.325bn. AFG CEO David Bailey welcomed the support of both domestic and international investors. “We are very pleased to be able to upsize the transaction from $350m to $500m, particularly in the light of a degree of market uncertainty in recent times,” he said. AFG’S
MONEYQUEST LAUNCHES GRADUATE PROGRAM is offering a program for tertiary graduates to fast-track their broking careers. Its Mortgage Broking Graduate Program provides industry-specific training, on-the-job experience, professional development sessions, networking opportunities, and mentorship under the guidance of MoneyQuest franchise owners. “With many companies currently taking on less graduates as a result of COVID-19, it is heartening to know that we are now able to provide bright young graduates with a clear pathway into our industry,” said managing director Michael Russell. MONEYQUEST
“One of the things that continues to amaze us is that, if you look at the last financial year, just over 7% of mortgages were refinanced” David Hyman CEO, Lendi Group
Commercial Loans
David Hyman, CEO, Lendi Group
JUST 7% OF HOME LOAN CUSTOMERS HAVE REFINANCED — AUSSIE The latest survey of home loan customers by Aussie Home Loans shows that the vast majority have not refinanced and weren’t aware of low interest rates from Aussie Home Loans shows how far the refinancing market still has to go, with just 7% of mortgage holders taking advantage of ultra-low interest rates. Despite the refinancing boom that has seen aggregators’ loan volumes skyrocket, 57% of respondents to Aussie’s research said they had no interest in refinancing, and 28% said they didn’t know that rates were as low as they were. Lendi Group CEO David Hyman, who is in charge of Aussie, Lendi and Domain RESEARCH
Home Loans, said that by not refinancing customers were missing out on a huge chance to save cash. “One of the things that continues to amaze us, despite high volumes, is that if you look at the last financial year, just over 7% of all mortgages were refinanced,” Hyman said. “There’s a massive opportunity cost. If you took out a loan in 2019 or early 2020, it’s highly likely, according to our data, that there is a 50–80 basis points gap there. But only 7% of people have refinanced.” “When we talk to customers … more than half of them say they’re not interested in refinancing.
That’s staggering given the gap. We’re seeing more people take that step, but certainly below where it should be. It’s a massive inertia in the market. “That comes on the back of potential rises in interest rates on the back of inflation data. There’s really low fixed rates in the market, and we’re strongly recommending that people take the plunge.” Hyman said there was an onus on brokers to inform their customers of the changes in the market. There were two reasons for customer inaction. Firstly, people with loans were just thinking of the two- or three-year rate and not realising how easy it is to refinance. Secondly, people were not following up to see what it would cost them. “The gap between front book and back book, for most customers, is between 50 and 80 points, so that could be hundreds of thousands over the life of the loan.”
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NEWS
TECHNOLOGY NAB MOULA WINS JOINS BEST PANEL LENDER AT AWARD AGGREGATOR FOR INNOVATION FAST giant PEXA has held its fourth annual awards, naming NAB as best lender. The 2021 PropertyX Innovate Awards reward innovative behaviour in the property settlements space. NAB was recognised for its changes to internal processes that made it the fastest financial institution to verify settlements. PEXA chief customer officer Lisa Dowie said the awards had put the spotlight on the amazing pace of innovation in property settlements due to COVID-19. CONVEYANCING
PROSPA PLANS TO CREATE ALL-IN-ONE LOAN PLATFORM wants to offer an “all-in-one” account for SMEs, with lending, financial management and transactions on one platform. To date, Prospa has focused on providing line of credit and fixed-term loans to SMEs but is now looking to “the next phase of our business strategy evolution”, said co-founder Beau Bertoli. “When we think of the SME owner and, in particular, our finance broker partners, what they’re looking for is an all-in-one solution for small businesses.” PROSPA
“There’s significant investment in tech [by lenders] in an attempt to offer fast loan approvals and the best customer experience” Mat Demetriou General manager of decision analytics for Australia and New Zealand, Experian
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Mat Demetriou, general manager of decision analytics for Australia and New Zealand, Experian
LENDERS RACE TO BOOST TECHNOLOGY, IMPROVE TURNAROUND TIMES A new report from information services company Experian shows how lenders are scrambling to improve their data technology to speed up loan processing fintechs and neobanks are in a “technology arms race” on turnaround times, trying to combine speed with regulatory compliance and risk management, according to data insights company Experian. Its inaugural Risk Radar report reveals the bind many lenders are in, with pressure from brokers and customers, the government and regulators and their own financial risk causing headaches. The report found that two-thirds of lenders have turned away borrowers due to a lack of data, and many are scrambling to update their loan approval systems. BANKS,
The changing goalposts of compliance have led to many taking a risk-averse approach, with 78% of lenders surveyed saying it was their major concern. The government’s proposed shelving of responsible lending obligations (RLOs) was cited as an example of how quickly lenders are forced to adapt: back in March, the Senate was discussing removing key aspects of RLOs to allow banks to lend more freely, only for APRA to tighten lending conditions in October. “We spoke to senior credit and risk leaders in Australia from both large banks and fintechs, and that’s
given us some really in-depth insights,” said Mat Demetriou, Experian’s general manager of decision analytics for Australia and New Zealand. “The key finding is that lenders are taking a more cautious approach when it comes to credit risk and approving loans.” Demetriou said this was partly due to managing risk in an ever-changing, complex regulatory environment, and some of the lenders don’t have systems to be able to leverage all the data points available to them to make the most accurate and informed decisions. “They’re all competing for a share of the pie, and there’s a tech arms race going on. There’s significant investment in tech in an attempt to offer fast loan approvals and the best customer experience, but of course that speed needs to be balanced with accuracy and compliance.”
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NEWS
MARKET DEMAND FOR CREDIT RISES AS LOCKDOWN ENDS credit demand rose in Q3 2021, according to Equifax’s latest Quarterly Consumer Credit Demand Index. The first week of NSW’s reopening saw rising demand for auto loans at 33%, mortgages at 15% and personal loans at 10%, compared to the week prior in lockdown. “With international travel soon to reopen, we can expect to see consumer credit demand grow, specifically the use of credit cards to pay for people’s overseas holidays,” said Kevin James, Equifax GM advisory and solutions. CONSUMER
BROKERS MOVE INTO PERSONAL LOAN MARKET mortgage brokers are seeking personal loans for their clients, and changes in the credit system are helping them make the transition. Funding models used with residential mortgages, such as RMBS deals and warehousing, are now occurring in the personal loan market. SocietyOne has reaped the benefits of this, pricing an ABS deal via NAB to boost its funding capacity, and also set up a $200m warehouse facility with Westpac. “Warehousing funding is conducive to growing volumes,” said SocietyOne chief investment officer John Cummins. MORE
Peter Koulizos, CEO, Property Investment Professionals of Australia
RENTS ACROSS REGIONAL AUSTRALIA INCREASE 12.5% IN A YEAR A lack of housing supply and more people moving out of the cities is putting upward pressure on regional rental prices, a CoreLogic study has revealed latest rental report has laid bare the rapid rise in rents that are squeezing many in regional Australia. The figures released last month show that rents across the country have risen nearly 9% year-on-year, with the bulk of those increases outside the major capital cities. City rents rose 7.5%, but in the regions they shot up by 12.5%, with lack of supply and an increase in the number of people moving out of the cities cited as the major drivers. This is good short-term news for investors, as it means rental yields are higher, but it could also signal a potential long-term problem as CORELOGIC’S
rising rents cause an affordability crisis in regional areas. “Since early 2017, when APRA brought in regulations that investors had to have double deposits and to pay an extra 0.5% in interest, there have been fewer rental properties available,” said Peter Koulizos, CEO of Property Investment Professionals of Australia. “Therefore, supply has decreased and has been decreasing significantly. It wasn’t very noticeable, because vacancy rates were decreasing slowly and rents were increasing weakly, but since COVID there has been a lot of shifting. People have been
moving from the cities to regional areas, and so now the lack of investment properties has been blown out of proportion because there’s been such an influx of people into regional areas. “Supply is inelastic. You can click your fingers and change demand, through HomeBuilder grants or interest rate changes, but you can’t click your fingers and increase supply. “Let’s not forget – international borders have been shut for two years. When these new migrants come back, where are they all going to live?” Koulizos said three measures were needed to solve the rental crisis: the encouragement of private investors to supply more rental properties; an increase in housing stock by the government; and the supply of rentals to low- and middleincome families through private and public joint venture projects.
“The lack of investment properties has been blown out of proportion because there’s been such an influx of people into regional areas” Peter Koulizos CEO, PIPA
MEDIAN RENTS, YIELDS ACROSS AUSTRALIA’S CAPITALS Source: Quarterly Rental Review, CoreLogic, October 2021
Change in rents (all dwellings)
10
Gross yields (all dwellings)
Median rent
Month
Quarter
12 months
Current
12 months ago
Sydney
$595
0.8%
2.3%
7.2%
2.45%
2.94%
Melbourne
$450
0.6%
1.2%
1.8%
2.76%
3.25%
Brisbane
$491
0.8%
2.6%
9.7%
3.93%
4.40%
Adelaide
$440
0.3%
1.6%
8.3%
4.06%
4.39%
Perth
$478
0.3%
0.3%
14.5%
4.33%
4.48%
Hobart
$507
0.2%
1.6%
12.8%
3.89%
4.67%
Darwin
$561
0.4%
1.7%
20.9%
6.17%
5.88%
Canberra
$633
0.7%
1.5%
9.6%
3.92%
4.48%
Combined capitals
$500
0.6%
1.7%
7.5%
3.02%
3.48%
Combined regions
$452
0.7%
2.2%
12.5%
4.35%
4.93%
National
$485
0.6%
1.9%
8.9%
3.29%
3.77%
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LENDER PERSPECTIVE
BROKERS NEED TO LEARN LOST ART OF LISTENING Technology is important to brokers helping clients with loans, but communication is far more critical, says Dean Koutsoumidis, managing director of Equity-One, a non-bank commercial lender and sponsor of the Broker of the Year – Productivity award at the 2021 AMAs
technology advances every aspect of our daily lives, it is comforting to remember that some things are still best led by us mere humans. One of these wonderful skills that we seem to have developed over millions of years (I need to watch more of the Discovery Channel) is the ability to listen to each other. The bond created and maintained between humans is intrinsically connected to the ability for us to connect – but connecting is not all lost in the digital age. In fact, there has never been a greater opportunity to stand out from the crowd simply by being human and listening. But how exactly does this relate to mortgages and mortgage brokers? In my day-to-day business, I handle commercial transactions. Recently, a friend was finding matters somewhat difficult when dealing with her bank. She was trying to get her first home, and, as we hear all around us, it was quite a steep hill for her to climb. She asked if I could refer her to someone outside the bank environment, and I recommended a colleague to her. Two months later, and wham – homeownership. So, what happened exactly? What was this broker voodoo? The real answer? It was the broker’s ability to listen. The challenges of my colleague’s new client weren’t exclusively financial, and these were not the impediments stopping her from accessing the property market. It was understanding the requirements in a way that made a difference to her – and being provided with enough knowledge/tools to be able to move towards achieving those goals. Cool, huh? And here’s the coolest AS
Dean Koutsoumidis, managing director, Equity-One
There has never been a greater opportunity to stand out from the crowd simply by being human and listening thing about it – none of this relates to how advanced we have become in the digital world and how fast we can turn around loan approvals, etc. The real good stuff happened
when two people came together and talked and listened. When dealing with brokers, I cherish the reminder that the transactions we assist them with
are really helped along by simply talking to them. Equally, we need them to be able to talk to us. While the tools that help us daily, such as emails, WhatsApp, texts, etc., are super nifty and help get things done fast, the importance of human engagement at a personal level still holds true today. The benefits it offers can be harnessed by brokers in building their businesses. This is no more evident than in segments where brokers specialise in certain community groups, when language, perhaps, is a challenge for some clients who are trying to get a foothold in the Australian property market for the first time. Connecting with people, and the magic that occurs thereafter, is as powerful today as it was eons ago. This reminds me of the frustration we all feel when our internet or network service is down for a while. Heaven help us if Netflix is offline. Lost connection? Nothing grinds the collective teeth of the population as much as this. (OK, I’m being a bit dramatic here.) It’s interesting, then, that we don’t feel the same instant frustration when we have lost connections personally. We have little experiences of this when text messages are misunderstood, or an email conveys a different tone than was otherwise intended by the writer. This is the real ‘lost connection’. The difference is that it has happened over a long period of time, and we, as living creatures, do find ways to adapt. That’s why it’s so refreshing, and powerful, when we remember the brilliance of listening to someone – in person, and then the rest isn’t so hard. AB www.brokernews.com.au
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NEWS
INDUSTRY BODIES MORE FIRST HOME BUYERS OPTING TO USE BROKERS growing number of mortgage brokers are helping first home buyers with their loans, according to the National Housing Finance and Investment Corporation. The corporation’s second annual First Home Loan Deposit Scheme Trends and Insights Report shows that the proportion of FHLDS-guaranteed loans originating from mortgage broker channels was 56% in 2020–21, an increase from 48% in 2019–20. Brokers also originated 72% of loans provided through the New Home Guarantee scheme. A
COBA SEEKS GOVT ACTION ON HOMEOWNERSHIP
Anna Bligh, CEO, Australian Banking Association
Customer-Owned Banking THE Association wants the federal government to prioritise homeownership for more Australians. In a submission to the Parliamentary Inquiry into Housing Affordability and Supply, COBA said first home buyers were finding it increasingly difficult to save enough money to buy a home. Housing prices have climbed from two and a half times to six times disposable income in the last 30 years. “The biggest lever governments have to improve housing affordability is to boost supply,” said COBA CEO Michael Lawrence.
“It’s heartening to see the need for assistance declining as many states and territories come out of lockdown and as borders begin to open” Anna Bligh CEO, Australian Banking Association
DEMAND FOR HARDSHIP ASSISTANCE DECLINES AS AUSTRALIA OPENS UP Banks have been seeing fewer customer requests for hardship assistance since lockdowns were lifted, according to the ABA’s new Financial Difficulty guideline data from the Australian Banking Association reveals a drop in demand for hardship assistance since it peaked in early August, as Australia emerges from lockdowns and border restrictions. Nearly 69,000 customers have received hardship assistance since 8 July, including more than 27,000 home loan deferrals and over 4,000 business loan deferrals. This amounts to just 12,000 more hardship assistance approvals since September, the smallest increase since the banking industry announced a second COVID-19 package of assistance in July. ABA CEO Anna Bligh said that while the data showed that people NEW
still required assistance, it was reassuring to see them getting back on their feet. “Banks have been on hand to assist their customers throughout the pandemic; however, it’s heartening to see the need for assistance declining as many states and territories come out of lockdown and as borders begin to open,” Bligh said. “The majority of hardship approvals came from customers in NSW and Victoria, which is obviously no surprise given the recent lockdowns; however, we did see thousands of customers across the rest of Australia seek support and talk to their bank.” Due to the pandemic, the ABA recently reviewed industry
guidance for banks supporting customers in financial difficulty and has released a new industry Financial Difficulty guideline for all ABA member banks. The guideline promotes good practice across the industry, which includes a framework for banks that balances the need for consistent, standardised access to financial difficulty assistance with the need for flexibility when responding to customers’ unique personal and financial circumstances. While some banks have already begun to implement practices under the guideline, banks across the industry will roll these out over the next 12 months. A new initiative in the industry guideline is the option to provide a savings buffer for customers in financial difficulty. Bligh said a savings buffer would allow a person on a payment plan to have a small amount of funds set aside by the bank for unexpected expenses or emergency bills.
HOW BANKS COULD HELP CUSTOMERS IN FINANCIAL DIFFICULTY Source: ABA Industry Guideline: Financial Difficulty, October 2021
Minor individual ways to help
Deferrals, refunds or fee waivers can be provided by banks at their discretion
12
When restoring a customer’s financial position is possible Banks’ financial difficulty or hardship arrangements focus on situations in which a customer can recover their financial position if an appropriate arrangement is put in place. Arrangements could include:
Short term Moving to interest-only or reduced payments for a short period
Longer term Extending the term of the customer’s loan(s) to reduce repayments for the life of the contract; these generally require a change to the conditions of the existing credit contract and a new repayment schedule
Debt reduction If the customer is an individual, a bank may, at its discretion, reduce or waive a customer’s debt if it is an unsecured personal loan or credit card, on a case-by-case basis
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COVER STORY
SHIFT GEARS UP FOR TECH TRANSFORMATION GetCapital is now Shift, signifying the fintech’s technology and product transformation. Shift sales director Kristian McCausland and head of strategic partnerships Marie Boyagi explain how the changes will benefit brokers and their clients
was established as GetCapital in 2014 to provide lending solutions for small businesses. Fast-forward to October 2021 and the North Sydney-based fintech has undergone big changes – it’s no longer just a lender that offers business loans and asset finance to brokers and their SME clients. Using streaming data, Shift now provides businesses with finance on demand. “The rebrand to Shift reflects how we’ve evolved from being solely a business lender to a provider of platforms to help businesses easily trade, pay and access funds,” says Shift sales director Kristian McCausland. “Over time we’ve changed to support our partners and customers who need much more. This involved ongoing investment in technology and data, while keeping our broker partners and customers at the centre of everything we do. “This transformation meant we’re now at an exciting point in our company’s journey, one that deserves a new brand and name, hence the change to ‘Shift’. McCausland says the name Shift is a more accurate representation of the difference the company makes for brokers and their customers. “Shift talks to disruption and positive change, which is what we’re about as a company. In a nutshell, Shift is changing the way Australian businesses access finance with a platform that is built for brokers. It gives brokers the tools, data and intelligence to supercharge their customer value.” SHIFT
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Shift change “We’ve grown into a provider of credit platforms that help brokers service their clients, manage their own businesses and help other businesses of all sizes,” McCausland says. “Now more than ever, brokers need flexibility rather than a cookie-cutter, traditional lending approach, and that’s our core focus. “Whether it’s overdraft, asset finance, focusing on cash flow
“Earlier this year we launched our broker platform – now called Shift Connect – which uses streaming data so brokers can help their clients access Shift financial solutions in just eight clicks,” says Boyagi. “As Shift, we’re even further heightening our focus on making sure our platforms give more insights, flexibility and time back in the day to brokers so they can proactively engage with their clients
“Now more than ever, brokers need flexibility rather than a cookie-cutter, traditional lending approach, and that’s our core focus” Kristian McCausland, sales director, Shift or other needs, we’re really trying to make the processes as frictionless as possible for brokers and their clients.” McCausland says once brokers and their clients are part of the Shift network, they’ll have swift access to finance solutions they need, without having to repeatedly jump through the hoops of applications and turnaround times. Broker value proposition Head of strategic partnerships Marie Boyagi says the rebrand is a sign of Shift’s increased focus on providing credit platforms and insights that help brokers better service their clients and run their own businesses.
to find the right financial solutions for each individual business.” McCausland says Shift Connect aims to put brokers in control. “As part of the Shift network, we want our brokers to have full oversight of the options available to their clients, enabling them to have more insightful, timely conversations without the paperwork. “With Shift Connect, brokers can register their clients in just minutes, then get real-time status updates, full visibility of financial data – including cash flow, income and expenses – track commissions, and much more.” When Shift asked its brokers what features of their financial solutions provider they valued
most, McCausland says the three points that stood out were speed, consistency and flexibility. “This is why we’re continuing to focus on our broker platform, Shift Connect, as well as making sure we don’t take a cookie-cutter approach to the solutions we help brokers offer clients.” Boyagi adds, “Brokers clearly called out the amount of admin work they have to get through as a big challenge, so we’re looking to cut that out where we can by our use of data streaming technology to deliver better solutions to partners that help them better service their clients.” Focus on technology McCausland says, “We’ve grown our tech team by 50% this year as we continue to invest in data streaming technology, and expect to grow it by 50% again next year. “This is part of our continued focus on making sure we set our brokers up for success by combining insights-based technology with a strong, national broker team. “We’re hard at work behind the scenes on a beta version of an insights component of our platform. We’re getting feedback from a range of brokers on it at the moment.” This will give brokers instant access to more insights about the financial health of their clients and the business they have with each broker, McCausland says. “It will help brokers make quicker, more informed choices when finding financial solutions for them and even help them know when to check in with their clients. Expect more on this in the coming months.”
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In partnership with
Marie Boyagi, head of strategic partnerships, Shift
Kristian McCausland, sales director, Shift
Along with the tech focus and an expanded BDM team, Boyagi says Shift aims to deliver on providing speed, consistency and flexibility. “Brokers spend too much time on admin and red tape. If a financial solution provider is light touch for a broker, it’s doing its job properly – that’s a huge focus for us,” she says. “We want to make sure our range of products does more than other standard loans when many businesses might need something different, especially after the last two years and businesses pivoting, consolidating for growth and mapping out their path to recovery. “That said, we’ve seen huge resilience from some sectors, so a strong part of our business is focused on helping brokers service companies that are maintaining a solid growth trajectory.” Coping with COVID McCausland says brokers have weathered a storm like never before. “Brokers have thought on their feet, come to us with a view to help clients with products that suit their financial health and not just
standard responses to transactions as they arise,” he says. “The challenge for us really has been more of an opportunity. We’ve already had a strong tech focus, and by cranking it up a gear we’ve been
Boyagi says as lockdowns end and the economy opens up, brokers will play a vital role in supporting their clients’ future plans. “Now more than ever, brokers are critical to navigating the market and
“Our broker platform Shift Connect uses streaming data so brokers can help their clients access Shift financial solutions in just eight clicks” Marie Boyagi, head of strategic partnerships, Shift able to bring a great broker platform to the market, as well as rolling out a beta of an Insights platform that will help brokers manage their – and their clients’ – business.” In some states, transport, postal and warehousing have performed strongly, McCausland says, adding that “brokers have seen significant opportunities in asset finance and cash flow throughout these industries”.
guiding clients to the right product at the right time to enable growth,” she says. Emerging opportunities Diversification is an important factor for brokers, Boyagi says. “We hear about diversification as being extremely important to the broker, but ultimately diversification is as much about meeting your clients’ needs as it is about income.
“Clients are looking for more than a single product discussion and are eager to understand all the avenues available to help them achieve their goals.” Boyagi says there are more products than ever in the market, and if brokers don’t adapt they run a risk of being left behind by more agile brokers. “At Shift we support brokers to understand our product range, when each product is suitable for each client and how best they can work with us.” McCausland says Shift is focused on getting its Insights platform to brokers in the not-too-distant future. “Over the next year we’ll maintain our focus on moving towards true finance on demand that makes it easier for brokers to match clients with the right solutions. “Part of this is helping brokers access the data they need to have more valuable conversations with their clients, cut red tape and give them options they need to more efficiently and productively run their businesses.” AB www.brokernews.com.au
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DIVERSIFICATION
RESIMAC SEEKING TO EMPOWER MORE BROKERS Leading non-bank lender Resimac is encouraging brokers to offer more services to clients through diversification as a way of growing their businesses. The sponsor of the Resimac Brokerage of the Year – Diversification award at the 2021 AMAs and award winner Empower Wealth discuss diversification opportunities and Empower Wealth recognise the value of diversification as a way for brokers and lenders to drive success. Empower Wealth, named Resimac Brokerage of the Year – Diversification at the Australian Mortgage Awards last month, is more than just a mortgage brokerage. The Melbourne-based business also offers property advice, financial planning and accounting services. “Our core focus is to help our clients design the lifestyle they desire and to become financially free,” says head of mortgage broking Ben Magnus. “That journey starts with educating them on how to manage their money better, how RESIMAC
“Those specialist services can include property and mortgage advice, financial planning and accounting services, and also buyers’ agency assistance.” Diversification is vital to Empower Wealth’s growth and success. “It’s absolutely critical for a brokerage to diversify its services to its clients – this provides protection to your business in case there is a shift in a specific market segment,” Magnus says. “For example, interest rate changes, an over/undersupply of properties or macroprudential regulations can quickly change the lending landscape. Having alternative lead sources and a holistic proposition for your clients can all
“It’s absolutely critical for a brokerage to diversify its services to its clients – this provides protection to your business” Ben Magnus, head of mortgage broking, Empower Wealth to create and trap surplus money, and guide them on how to use our proprietary money management platform, the MyWealthPortal, to achieve their financial goals. “This means that our clients can be ahead of the curve in everyday cash flow management, which helps them achieve financial peace and a comfortable retirement.” Magnus says once clients are cash flow savvy, “this is when the real magic starts”, with Empower Wealth’s dedicated team of specialist advisers applying their skills to a range of property and financial services. 16
help ensure business continuity and growth.” Magnus says most Empower Wealth clients are set up with a longterm plan to build their household wealth through property investment. “Those plans usually include multiple property purchases over a number of years. With that in mind, we need to continue to adapt and diversify with our clients to ensure we can meet their needs now and into the future,” he says. Diversification is part of Resimac’s DNA. CEO Scott McWilliam says Resimac looks at diversification in two ways – at what it offers
customers through its products and services; and how it operates and grows business. “Our goal is to offer a diverse range of finance solutions to give as many Australians access to credit as possible,” McWilliam says. “In partnering with Resimac, brokers are able to service a diverse range of customers with a broad spectrum of needs, which helps them create new streams of revenue and grow their business.” “Our mortgage products are designed to be used for a diverse range of purposes. In addition to purchasing property and refinancing home loans, customers can use our products for business purposes, debt consolidation, investment, and cash-out.” Resimac used to be a prime residential mortgage lender focused on the typical Australian borrower, McWilliam says. “In 2007, we saw a gap in the market for those borrowers who were being overlooked by the banks – those borrowers that fell outside traditional, and somewhat rigid, lending guidelines. “So we diversified our product offering and launched our specialist lending program with products that catered to a broader borrower type, including the self-employed and credit impaired. Today that business represents approximately 30% of our originations, and we expect that to grow over coming years.” Last year Resimac further diversified and bought a small asset finance company, then relaunched it in early 2021 as Resimac Asset Finance, providing a combination of asset finance, secured business loans, personal loans and car loans. “We share the same view in terms of our brokers,” McWilliam says.
“Brokers are in a unique position in that they’re often the first port of call when a customer has a financial problem. Often, a complete solution entails more than just the financial product.” “By diversifying the services that they’re able to offer customers, they can play a bigger role in solving their problems, thus adding more value to the relationships and receiving more value in return.” “Diversification will allow a broker to say ‘yes’ more often and not only grow their business with new clients but also retain those clients they worked so hard to acquire.” Empower Wealth, which specialises in servicing its customers through their property and financial investment journeys, is a great example, McWilliam says. “Buying an investment property is not as simple as getting a loan, buying the property and making a profit. Instead, it’s a long and staggered journey, which Empower Wealth is well equipped to take its clients on through its offering of diverse related services, creating reciprocal value at each stage,” he says. Magnus says Empower Wealth has broadened its market presence by offering complementary services for clients who are passionate about property investment and money management. “We continue to build technology that makes it easy for our clients to stay close to their lifestyle design journey,” he says. McWilliam says all of Resimac’s products are offered at competitive mortgage-based rates, as “we secure the loan against the customer’s residential property rather than the purpose of their loan”. “This contrasts with the standard industry practice of setting rates
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In partnership with
Scott McWilliam, CEO, Resimac
based on the loan purpose, and it can provide borrowers with significantly better outcomes.” McWilliam says Resimac’s comprehensive and competitive solutions are available to a diverse range of customers, including those who don’t fit the standard lending guidelines – a segment typically overlooked by the major lenders. “These include self-employed borrowers who require alternative methods of income verification, and borrowers with credit impairments such as defaults and discharged bankrupts.” The majority of Resimac’s residential mortgage products can be used for any worthwhile purpose, including purchasing new equipment for a business; consolidating debt; investments (including in assets other than property) and cash-out. Resimac Asset Finance also provides more options for borrowers, including secured business loans and personal loans, and products to fund automobile or equipment purchases and insurance premiums. “Brokers can be confident that, for the vast majority of customers who walk through their door, Resimac
Ben Magnus, head of mortgage broking, Empower Wealth
has a competitive product to suit their needs,” says McWilliam. Funding is another area in which diversification has been essential to Resimac’s growth, namely funding mortgages by issuing residential mortgage-backed securities. “Strong demand from investors in Australia and offshore resulted in $6bn worth of prime and nonconforming RMBS transactions in FY21 alone,” says McWilliam. Magnus says Empower Wealth’s diversification path has always started with education: “ensuring our clients have the tools and technology available to make educated decisions about their financial future, then ensuring our staff are trained to execute on the strategies that help guide clients in the right direction”. He advises brokers wanting to diversify to back themselves. “Take a chance on broadening your business strategy and client proposition. Be mindful that you will need to invest in educating your people, building technology and finding the right specialist business partners. Getting those things right will help ensure you future-proof your people, systems, revenue sources
and client base. This is also made easier when you hire passionate property enthusiasts into the firm.” McWilliam says while the residential property market is extremely strong, markets ebb and flow, and “it’s important to ensure that
refinance for prime alt-doc customers such as the self-employed.” McWilliam says brokers don’t necessarily need to make drastic changes to their business. “Start off small by educating yourself on servicing customer
“By diversifying the services they offer customers, brokers can play a bigger role in solving their problems, adding more value to the relationships” Scott McWilliam, CEO, Resimac a broker’s business is sustainable”. “By looking into other areas to diversify into, brokers can enhance their success when times are good, but also insulate their business when the market changes,” he says. “For example, some brokers may just be focusing on prime PAYG customers looking to buy or refinance. But they could expand their customer base by diversifying into residential purchases or
needs that currently fall out of your remit, as well as about lenders like Resimac that cater to a diverse range of customer types. Then, as you grow more confident and start to pick a good volume of business, you can think bigger and build diversification into your business strategy. “Pick a niche … it needs to be focused and targeted, so direct it towards a specific customer segment or niche,” says McWilliam. AB www.brokernews.com.au
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TECHNOLOGY
DIGITAL INNOVATION DRIVES MACQUARIE FORWARD Tier-one lender Macquarie Bank is investing in technology to deliver a seamless, industry-leading service to brokers and their clients. Australian Broker caught up with head of broker sales Wendy Brown to find out more
WHAT MACQUARIE TECH OFFERS BROKERS AND BORROWERS Access to award-winning digital tools Fast turnaround times Broker Portal – provides in-flight loan application tracking and access to existing client details Broker Help Centre – dedicated website featuring the most common questions and answers; this is an extension of the Client Help Centre Macquarie Authenticator – first-of-its-kind security app allowing clients to approve or deny transactions and account changes
that don’t have top-quality technology platforms will soon be left behind by their competitors. But there’s no danger of that happening at Macquarie Bank, as the tier-one lender invests heavily in creating first-class digital tools for brokers and their clients. “At Macquarie, we believe the future is in highly personalised, more ‘human’ technology that ultimately helps customers to intuitively manage their money, including their home loan,” says Wendy Brown, head of broker sales. As a digitally led bank, Macquarie’s focus is on empowering customers to achieve their financial goals by offering them innovative digital solutions and personalised experiences. “We believe we’re well positioned to capitalise on both the innovation and digitisation driving rapid change in our industry to continue delivering a highly competitive home loan experience that resonates with brokers and their clients, now and into the future,” says Brown. “We’ve made significant investments in our technology and platforms over recent years to ultimately transform the approval process and deliver market-leading turnaround times. “It’s about giving our broker partners confidence and transparency, because it not only makes us easier to do business with but also provides great outcomes for their clients.” LENDERS
Innovative technology Brown says Macquarie is continuing to invest in its digital capabilities. “We knew that launching a broker portal was an important next step in our digital journey and a natural extension of the first-class 18
service we’re already offering our broker partners. “We’ve designed the portal based entirely on broker feedback and worked very closely with brokers every step of the way to ensure we were delivering something that would empower them in providing an exceptional experience to their clients. We’re continuing to work hard to enhance the portal experience and add new features, and we’re excited for what’s to come over the coming months.” The new Broker Portal gives brokers access to in-flight loan application tracking as well as existing client details, providing brokers with the important information they need to own every client interaction. “As a committed partner to the broker channel, we place huge importance on the feedback we get from our broker partners, so we’ll continue to listen to what matters most to them and design our digital tools with their needs and those of their clients at the centre,” Brown says. Macquarie is also launching its Broker Help Centre – a dedicated website featuring the most commonly asked questions and answers, which is designed to support brokers using the bank’s products and platform. “This is an evolution of our existing Client Help Centre, a great online tool to provide clients with fast answers to their questions over the life of the loan. It frees brokers up to spend more time on the things that are important to them and their businesses.” Brown says Macquarie regards its award-winning digital tools as an extension of its overall service proposition, which is all about making brokers’ lives easier.
The bank also knows how important turnaround times are in providing clarity and certainty during the home loan process. “The significant investments we’ve made in our technology and platforms over the years have enabled us to transform the approval process and deliver a seamless, industryleading home loan experience. “It gives our broker partners confidence knowing that when they submit a home loan application to us with all of the required documents, they’ll receive a very fast response, usually within a matter of hours. We get great feedback from our broker partners, who are always thrilled to be able to let their clients know an answer so quickly. “By providing this transparency and certainty, we’re making it easier to do business with us, while building long-standing, rewarding relationships with our broker partners.” Macquarie’s investment in technology benefits its customers too. “We’re also very focused on delivering an exceptional digital experience for brokers’ clients, one that extends well beyond the application and formal approval stage of the home loan journey. “Thanks to our award-winning mobile application and online banking platform, clients can easily and securely manage their money while receiving the benefits of world-class security features like our Macquarie Authenticator app.” The Macquarie Authenticator security app is the first of its kind in Australian banking, says Brown. “It provides an extra layer of security and real-time control for your clients to approve or deny transactions and account changes using actionable push notifications.”
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In partnership with
Wendy Brown, head of broker sales, Macquarie Banking and Financial Services Group
Future tech improvements “We know that factors like innovation and digitisation are driving rapid change in our industry, just as they’ve already done across every aspect of people’s lives,” Brown says. She points out that customers want highly personalised experiences, which they already have in their daily lives, and now they expect it from their banks too. “Artificial intelligence and machine learning are two of the biggest innovations in technology. We’re excited about using these technologies to enhance our offerings to clients.” Data also plays a huge part in developing highly personalised experiences, and it will shape the future of the home loan industry. “The continuous flow of data between systems or use of APIs will be another way in which we can deliver on our commitment to brokers in providing transparency and fast turnaround times.” The COVID-19 effect Macquarie adapted well to the pandemic and brought in new tools to help brokers, says Brown. “When the COVID-19 pandemic began to unfold, it was crucial
not only for us to ensure our clients and broker partners felt supported, but to adapt quickly so we could continue providing uninterrupted service and communication during this time.”
this feedback, including the ability for eligible clients and brokers to electronically sign the National Mortgage Form via DocuSign. It also updated its VOI policy to allow video calls between brokers
“We’ve made significant investments in our technology and platforms to ultimately transform the approval process and deliver market-leading turnaround times” Brown says feedback has always been central to how Macquarie does business, “and we knew it was more important than ever when our people moved to more remote ways of working”. “We’ve continued to listen carefully to our broker partners and action their feedback, all with a view to making it easier to do business with us and providing even more transparency during the home loan application process.” Macquarie introduced a range of digital enhancements based on
and their clients for identification purposes, made changes to increase the accessibility of online credit policy guidelines, and enabled new and improved backchannel messages. “We’ve been investing in our platform and technology for many years, so these enhancements complement the suite of existing digital solutions we embedded well before COVID-19. “DocuSign, ZipID and free, upfront CCR reports and valuations were embraced like never before, and they helped give brokers ever-greater
confidence and convenience when submitting loans to us.” Home loan boom Macquarie is pleased with the growth in its home loan portfolio in recent years, says Brown. “We’re now seeing the benefit of significant investments in our mortgage platform, our marketleading product and turnaround times, and our strong relationships with brokers. “We see ourselves as a tier-one lender, so we’re always focused on creating and delivering exceptional experiences.” Brown says the bank is proud of its award-winning digital banking experience and industryleading security features such as Macquarie Authenticator. “We’re doing everything we can to deliver an even better digital experience for brokers, and the Broker Portal and dedicated Broker Help Centre is the result of many months of hard work and close collaboration with our broker partners. “We’ll continue to enhance and evolve this digital offering to meet their ongoing needs and expectations.” AB www.brokernews.com.au
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FINTECHS
DIGITAL LENDERS OFFER QUICK LOAN SOLUTIONS 86 400 and OnDeck are at the forefront of a revolution in mortgage lending as more brokers turn to market-leading fintechs for fast, efficient access to finance for their clients
are leading the way in the digital transformation of financial services, particularly when it comes to home loans. While 86 400 and OnDeck have been ahead of the game in using digital tools, brokers and their clients are also embracing technology, and much of this has been driven by the pandemic putting a stop to face-to-face meetings. Australian Broker caught up with 86 400 head of lending Melissa Christy and OnDeck national channel and partnerships manager Nick Reily to learn more about how fintechs are changing the face of lending. Christy says 86 400 was very excited to learn that it had been named Fintech Lender of the Year at the Australian Mortgage Awards for the second year running. “Of the other finalists, we were the only lender dealing with residential home loans,” says Christy. “I think what has set us apart from the other fintechs is we’re the only residential home loan lender in the market with a streamlined digital process for brokers.” 86 400 has launched new products and tech features this year which also give it an edge in the fintech space. One of these is the smartbank’s 85% LVR, no LMI home loan. “Our 85% no LMI product has been very well received and has expanded our market to appeal to more customers,” Christy says. “We haven’t placed restrictions on who can qualify for the product, and it is not a limited-time offer. You don’t have to be a first-time buyer or a purchaser; it’s also for customers wanting to refinance to a better deal, and the product has no restrictions on loan amount either. FINTECHS
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“This year we also launched our direct (online) channel and introduced OCR Labs to make the whole VOI process even easier. We are focused on streamlining the process to make the end-to-end experience better,” says Christy. Reily says OnDeck is not just a fintech lender; it’s also a dedicated small business lender. “The two combined mean we are able to deliver exactly what small business needs – access to fast, efficient funding,” he says. “As a fintech, we harness the latest technology to deliver a streamlined application and approval service. Instead of asking small businesses and their brokers to complete reams of paperwork,
loan applications, says Reily. “With our Lightning Loans, brokers can have a decision on their client’s application in as fast as 30 minutes, with funding in as fast as two hours. This is considered to be among the fastest, most accurate lending decisions in the small business market. “This is vastly quicker than the banks, which can take weeks to get back to a broker regarding a small business loan application.” Christy says 2021 has been an amazing year of growth for 86 400. “We’ve added many more aggregator partners this year – PLAN, FAST, Choice and Finsure. We recently hit $1bn in home loan balances, and September 2021
“We’re the only residential home loan lender with a streamlined digital process for brokers” Melissa Christy, head of lending, 86 400 we only ask for bank statements to be uploaded to the secure OnDeck portal. From there, we use our in-house risk assessment algorithm, The KOALA Score™, to decision an application.” Reily says OnDeck takes a very different approach to traditional lenders, which look backward and often ask for previous years’ tax returns to make a lending decision. “This approach is particularly lacking in relevance during the pandemic, because, as we’ve seen, businesses can be closed for several months during lockdowns and then experience a tremendous uptick in revenue once restrictions are lifted.” Through technology, OnDeck is able to deliver a swift response on
was by far our biggest month for applications.” Being a purely digital bank means 86 400 was already well placed to cope with the challenges of COVID-19. “We haven’t had to make changes for COVID-19 as our process has never dealt with physical documents, and we don’t require a broker to see a customer in person. “The introduction of OCR Labs, though, has helped greatly with this latest COVID outbreak, as applicants complete VOI themselves on their mobile – it’s a two-minute task.” As Australia emerges from pandemic lockdowns, Christy says the opportunities for 86 400 are endless.
“With the backing of NAB and our team always working to refine our processes, we’re set to be an even stronger force in the mortgage market going forward.” NAB’s ownership of 86 400 and the merger with UBank will also strengthen the fintech. “We will be able to move faster and provide more and more enhanced features and functionality, to provide an even better experience for our brokers and their clients.” Christy explains why 86 400 is so well placed to assist brokers and their clients with their finances in the months and years ahead. “We have a very strong and passionate distribution team and a strong customer service ethic. We have competitive products and fees. And we’re working hard on streamlining our process further with the aim to make it much faster to get an approval.” OnDeck’s recent tech innovations – The KOALA Score™ credit assessment tool and Lightning Loans – are game changers for the lender. “The KOALA Score™ is something we’re really excited about,” Reily says. “Developed in-house in 2020 by our team of data scientists, it uses a sophisticated blend of big data, predictive analytics and statistical techniques in combination with data from multiple credit reporting agencies, including illion and Equifax, to build a holistic picture of a small business and support more tailored risk assessment.” The KOALA Score™ gives OnDeck the ability to analyse the personal credit scores of business owners – a unique feature of the new credit model. “It’s a plus for newer enterprises, sole traders and partnerships, which typically do
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Melissa Christy, head of lending, 86 400
not have the substantial volume of commercial data required by traditional lenders.” Reily says the development of The KOALA Score™ has led to the launch of OnDeck’s Lightning Loans, which are available for unsecured funding of up to $100,000. “These are super-fast loans, with funding in as fast as two hours. This is a plus for both brokers and their clients as it lets the broker seal the deal sooner, while giving the business the funds it needs to seize immediate opportunities without delay.” OnDeck does not ask for loan security – just a director’s guarantee. Reily says this is different from many lenders that require property, often the business owner’s home, as security for a commercial loan. Recognising how tough it has been for businesses during COVID, OnDeck offered a four-week repayment holiday to all new and
Nick Reily, national channel and partnerships manager, OnDeck
renewal loan customers during September and October. “This supported brokers’ business growth and the cash flow needs of their small business clients.” OnDeck research revealed the potential this had to help brokers expand their commercial lending, with one in five small businesses more likely to take out a loan if they had a repayment holiday option. Reily says OnDeck experienced a 175% jump in broker-originated small business finance between January and June 2021 compared to 2020, as the economy reopened. “We expect to see the same uptick in activity as restrictions ease across NSW and Victoria – potentially more so as the lifting of lockdowns coincides with the start of the festive season and the reopening of international travel. “There is plenty of pent-up consumer demand, and consumer spending will flow through to business investment, benefiting
all aspects of the economy.” In September 2021, OnDeck experienced a 33% uplift in loan applications from NSW small businesses in September
average size of Lightning Loans is $62,000 – as well as fast, efficient funding with no security required ( just a director’s guarantee). The lender also provides
“With our Lightning Loans, brokers can have a decision on their client’s application in as fast as 30 minutes” Nick Reily, national channel and partnerships manager, OnDeck compared to the month before. “The upshot for brokers is that small business lending is definitely worth adding to their suite of services. The opportunities over the next 12 months will be impressive.” Reily says OnDeck is well placed to help brokers and their small business clients in a variety of ways. These include providing funding for loan sizes that the big banks aren’t interested in – the
extensive support for brokers through its team of dedicated business developers and loan writers who are specially selected and trained to work in OnDeck’s Broker Business. “For brokers new to small business lending, our experienced team can take a broker’s client scenario and do the heavy lifting for them – and brokers only ever deal with one person.” AB www.brokernews.com.au
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BROKER SUCCESS
FROM FIRST STEPS TO FERRARIS IN 15 YEARS Aman Singh could barely speak English when he arrived in Australia in 2006 – now he’s a successful Aussie Home Loans franchise partner in Melbourne been quite a journey for Aussie broker Amandip (Aman) Singh. Fifteen years ago, he took his first steps on Aussie soil with, as he admits, limited English skills. Now, in 2021, and Singh is a successful businessman and a partner in a thriving Aussie Home Loans store in Melton, in the growing western suburbs of Melbourne. Although Singh studied to become an accountant, he quickly realised it wasn’t the profession for him. Driven by the idea of helping people achieve the colossal milestones in their lives, he was drawn towards the mortgage broking industry, and he quickly learnt that working at Aussie would allow him to assist a larger clientele. “People are my passion,” Singh says. “In accounting I was at the computer all day.” The game changer occurred when Singh arranged his own home loan through a broker. It was a pivotal moment when he realised that “broking is something I would enjoy doing”. IT’S
Ready to take the next step Singh’s big break came in 2014 when he joined Aussie Craigieburn, a highly successful store owned by experienced Aussie franchisee Jenny Pulford. Singh says he had an exceptional mentor in Pulford, who guided him every step of the way, and within three years he was entirely self-sourcing his own leads without the need to rely on store leads. “At that point I felt I was ready to go to the next level and own my business,” he says. Singh shared his thoughts with Pulford, and the two pooled their resources to become partners in a new Aussie Melton store. Investment pays off Aussie Melton opened in January 2021, and neither Pulford nor 22
Aman Singh, franchise partner, Aussie Home Loans Melton
“As mortgage brokers we’re helping our customers make one of the biggest decisions of their life … they will always remember us” Singh have looked back. “Business is going very well; the investment is already paying off,” says Singh. “We have hired two new recruits – both brokers – since opening, and a personal assistant joined us in February.” Singh attributes his success as a broker to his genuine desire to help people. “A lot of my business is generated by referrals, and new clients always tell me they’ve been advised ‘when you’re with Aman he gets things done’.” Singh’s commitment to his customers’ needs has delivered some
exceptional rewards. Just recently, he helped a customer secure funding to buy a Ferrari. The client was so grateful he drove the sports car to Singh’s home one weekend to share his thanks. “It was a very proud moment for me,” says Singh. “My wife and my children aged five and seven loved it – they were so happy to share in my success. From my own perspective, the type of car didn’t matter; it just meant a great deal to me that the client wanted to share a special moment with me and my family.” As it turned out, the client also
shared his gratitude on social media and has subsequently been a source of business referrals for Singh. Customers never forget their brokers For those thinking of a career change, Singh believes the key personal traits needed to succeed as a broker are “100% commitment and patience”. “As a broker, I never pretend to be someone I’m not. I’m here to help people make their dreams a reality, and I think people understand that when I’m speaking to them. “As mortgage brokers we are not sellers. We’re helping our customers make one of the biggest decisions of their life – and building a genuine connection to help them meet their personal goals means they will always remember us.” Ultimately, this sort of intrinsic reward is reserved for only a handful of professionals. AB
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08/11/2021 11:58:48 am
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Into people. Not just transactions. 1300 781 043 | deal@thinktank.net.au
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08/11/2021 11:58:57 am
PEOPLE
CAUGHT ON CAMERA The public image you present to others is crucial in the world of finance. Whether you’re a broker, BDM or bank executive, appearances matter. And the best way to look good is to get high-quality photos taken by a professional photographer. Peter Secheny (pictured left) has worked as a photographer for 25 years and has taken some amazing shots of some of the most well-known faces in the mortgage finance industry for Australian Broker and MPA, a few of which are featured here. “I often get complimented on how painless and stress-free my portrait sessions are,” Secheny says. “Having a friend or work colleague take your headshot conditions you to think that you are never going to look your best in a photo. A professional portrait experience should be relaxing and fun. The end result is an enhanced version of yourself, portraying success and confidence. A strong and professional photograph will create a great first impression when clients see you behind the business.” Lisa Llewellyn runs PR/content creation agency Llewellyn Communications. “It’s a well-used term, but it’s a good one – ‘a picture paints a thousand words’,” says Llewellyn. “However, too often good, high-quality headshots fall by the wayside. “High-quality photographs are a vital tool in communication, whether they’re used in the media, on a website or for social platforms. They are vital to help market your business. It can help you make strong client connections.” Llewellyn says professional headshots help existing clients feel comfortable working with your company. “Is the cost of hiring a professional photographer worth the money? Damn right it is. They’ll know how to light, how to frame the photo, and where to position you to give you the best result for how the photographs will be used.” Photography by Peter Secheny Phone 0418 603 576 or email peter@secheny.com Website: secheny.com
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BUSINESS UPDATE
PERSONAL LOANS CAN MEET A MYRIAD OF CLIENT NEEDS The pandemic has changed the way we work, and brokers have had to adapt to meet changing customer needs and expectations. MoneyPlace’s Alf Vasta highlights how having personal loans in their toolkit can work to a broker’s advantage in any scenario There at every step Brokers have an incredible advantage with personal loans in their toolkit. These can offer an overall financial solution and a tool for forming long-term relationships with customers. Personal loans can be used throughout a customer’s life, whether to buy a car, tidy up their finances for their first mortgage, refinance, or meet other financial needs as circumstances change over time.
the new year fast approaching and Australians enjoying more freedoms, brokers have an opportunity to help more customers with a spectrum of finance needs. Whether they are seeking to fund delayed holidays or celebrations, strengthen their financial position or prepare for future expenses, today’s customer looks very different – as are their expectations and finance requirements. When brokers add personal loans to their offering, they have the flexibility to offer more holistic solutions that cater for a myriad of financial needs. Here’s how: WITH
You name it, we can fund it At MoneyPlace we are proud to say that we can fund almost anything, as long as it’s legal. We can consider anything from debt consolidation to gap finance, asset purchases, travel, medical expenses, weddings and so much more. Handy in a hot market Increasing demand and competition in the property market means borrowers are looking for any edge they can get. A personal loan can be the secret weapon that helps your customer get ahead of the rest and into their dream home amid the chaos. Used as gap funding or to help build a deposit, purchase off the plan or lock in pre-approval, a personal loan could make the difference. The missing piece The flexibility of personal loans means they can be paired with other products as part of a custom finance option tailored to a customer’s unique circumstances. The accessibility of large loan amounts makes personal loans perfect for gap finance solutions. A customer can use a personal loan to decrease their LVR enough to avoid having to pay LMI and improve the rate on
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Alf Vasta, head of broker sales, MoneyPlace
A personal loan can be the secret weapon that helps your customer get ahead of the rest offer for a residential loan. A personal loan can also cover any unexpected costs such as stamp duty fees. Flexibility to suit more customers With a MoneyPlace personal loan there is flexibility to choose a secured or unsecured loan type, loan duration and payment frequency. Customers also have the added benefit of being able to pay out the loan with no exit or discharge fees. Consolidating multiple debts into a long-term personal loan can increase a customer’s cash flow by reducing monthly expenditure. This can set up their financial position for any future decisions such as on a home loan or asset purchase. And, with the ability to offer up
A smarter way to refinance For a customer looking to refinance, a top-up might be a strategy to consider. A personal loan can give them access to funds now, while a refinance might take up to four months. For example, if a customer needs to refinance to do home renovations, a personal loan can allow them to get on with the project, and the broker can apply subsequently for the refinance with a more appealing property valuation. Once this is approved, the personal loan can be consolidated into the home loan, providing a flexible and efficient option with no exit fees.
to $80,000 per person or $160,000 per household, MoneyPlace personal loans are easy and accessible, boasting some of the lowest rates on the market.
Money in a hurry A strength of personal loans, particularly from MoneyPlace, is their fast turnaround times. For customers who need funds in a rush, for whatever the purpose, we can turn around loans in one to two hours, with some completed in a record seven minutes.
A secure choice At MoneyPlace, brokers can choose between a simple secured loan and unsecured options. Secured loans have additional flexibility because they can be used for multiple purposes, not just to purchase vehicle assets. Whatever the loan purpose, using an existing unencumbered vehicle as security, for example, can help your customer obtain a secured loan with a higher lend and possibly a lower rate. Our secured loans also have the benefit of no exit or discharge fees.
More referrals = more business With the ability to offer personal loans, brokers have an increased opportunity to use their contacts to help build new market streams. They can reach out to their local suppliers, such as pool and spa providers, solar panel installers and even their local accountant to offer easy and flexible solutions to their client bases. This can provide instant business to brokers, while also helping them nurture new and referral relationships. AB
www.brokernews.com.au
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08/11/2021 12:00:10 pm
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Are you ready for 2022? Listen to updates on the industry, economy, property market and insights into 2022 and beyond. Speakers include:
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Adelaide Timbrell
Partner GRACosway
MFAA CEO
Leading customer service expert
Michael Pascoe Your MC
Senior Economist, ANZ Bank
Register today at: https://www.mfaa.com.au/ virtualpd2021 Free for MFAA members & non-members
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08/11/2021 12:00:23 pmpm 1/10/21 4:00
DATA
PROPERT Y MARKET ANALYSIS
INFLATIONARY PRESSURE PUSHES UP INTEREST RATES Interest rates are rising, but it’s the banks rather than the RBA that have moved first. Tom Uhlich of Boss Money looks at what’s driving the change – and at the implications for the property market haven’t seen it in years. The RBA has not raised interest rates for more than 130 months. But we all knew it had to come at some point. It seems that time has come. We have seen the biggest movement in interest rates for a long time, but it’s not due to the RBA. Banks are taking action and increasing their interest rates. CBA was the first to move. It took a machete to its flagship basic variable rate, cutting it by 40 points; but to make that balance out on the books, it increased all other major fixed rates. Westpac was second in line, raising its rates for two-, three-, four- and five-year fixed interest rate loans. WE
LENDERS THAT MOVED AT LEAST ONE RATE, 28 SEPT—27 OCT, 2021 Source:RateCity
Lenders that have cut
Lenders that have hiked
Variable
25
2
1-year fixed
10
3
2-year fixed
4
12
3-year fixed
2
22
4-year fixed
0
18
5-year fixed
0
18
Why are fixed rates going up? Managing director and founder of Finsure, John Kolenda, explained. There’s an inverse relationship between interest rates and inflation; if one rises the other has to fall. The RBA has flagged no interest rate rises until 2024. The only reason for an earlier rise would be to seize rising inflation and drop it back to where it needs to be. Kolenda believes there is pressure on inflation. We have seen this in the increasing cost of goods and services throughout the COVID pandemic. This could mean the RBA is forced to review interest rates earlier than planned. Other indicators of inflation are bond prices and the price of money. The RBA has used bonds and funding terms to support the economy throughout COVID, with a lot of success. As it reduces the support, this can lead to inflationary pressure. Banks borrow from overseas and could be paying a higher rate. This, and rebounding economies, also builds inflationary pressure. How does this lead to banks increasing rates? As the cost of money and borrowing rises, banks will increase rates to compensate. 28
Inflationary pressure is high in the US and New Zealand as these economies rebound from COVID. The same is expected in Australia soon. Cashed-up customers are coming out of lockdown ready to spend. Confidence is increasing, as is the cost of goods and services. Pressure to increase wages is expected as businesses struggle to find staff. All of these pressures will lead to increasing inflation and the banks needing to raise interest rates to claw back costs. Westpac and CBA moved first; it’s expected that other banks will follow shortly.
Tom Uhlich Director and senior mortgage broker, Boss Money
Other regulatory influences Cashed-up buyers coming out of lockdown want to buy new homes. It’s not just the weather that’s heating up; the real estate market is too. While it’s a great boost if your nest egg is in your home and you are looking to cash out and downsize, it’s not all good news. Skyrocketing prices put pressure on affordability and the cost of living; together with inflation, it’s a recipe for disaster. To reduce the impacts of skyrocketing house prices and inflation risks, APRA has recently made some changes to mortgage lending, because it’s concerned about
people borrowing more than they can service when interest rates are likely to go up. APRA has increased the interest rate buffer that banks must apply to loans at application stage from 2.5% to 3%. This means borrowing capacity is reduced. What this means for buyers This buffer rate rise does not affect an existing mortgage, and the interest rate won’t change. What will change is how the bank, during the application process, views a borrower’s ability to service a loan. It also won’t affect the customer if they are not borrowing at their maximum capacity. The biggest impact will be on investors who are more likely to be borrowing closer to their limit than owner-occupiers. What this means for sellers Given only a small percentage of customers borrow at capacity (CBA reports 8%), sellers can still expect high property demand. At Boss Money, we have found that clients who borrow close to their margins need to reduce their purchase price expectations, but this is, once again, a small number of clients. Contact Boss Money on 0476 111 000 or tom@bossmoney.com.au. AB
www.brokernews.com.au
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ADELAIDE
BRISBANE
Total auctions
236
Cleared
134
Uncleared
CANBERRA Total auctions
140
Cleared
102
21
Clearance rate
86.5%
Total auctions
242
Cleared
152
Uncleared
46
Clearance rate Uncleared
76.8%
11
Clearance rate
90.3%
PERTH Total auctions
20
Cleared
6
Uncleared
7
Clearance rate
MELBOURNE
46.2%
Total auctions
1,739
Cleared
1,156
Uncleared
338
Clearance rate
77.4%
TASMANIA SYDNEY
Total auctions
3
Cleared
1
Total auctions
1,144
Uncleared
0
Cleared
790
Uncleared
206
Clearance rate
n.a.
Clearance rate
Note: A minimum sample size of 10 results is required to report a clearance rate.
79.3% Source: CoreLogic
CAPITAL CITY AUCTION CLEARANCE RATES WEEK ENDING 31 OCTOBER 2021 A total of 3,524 homes were taken to auction across the combined capital cities in the last week of October, overtaking the previous week (3,019) as the second-busiest auction week this year. This time last year, 1,747 auctions were held. The preliminary auction clearance rate for the week was 78.9%, compared to 71% for the same week last year. In Melbourne, 1,739 homes went to auction in the second-busiest week for auctions this year and the third-busiest since March 2018. The previous
week saw 1,467 homes taken to auction. The preliminary clearance rate was 77.4% this week; at the same time last year it was 70.1%. In Sydney, 1,144 homes were taken to auction, up from 974 over the previous week, and a preliminary clearance rate of 79.3% was recorded. This compares to a final figure of 78.5% the previous week. Across smaller markets, Canberra had the highest clearance rate at 90.3%, followed by Adelaide (86.5%), Brisbane (76.8%) and Perth (46.2%).
NICK YOUNG: TRAIL BOOK SALE EXPERT Sell your book. Keep your clients. Release working capital or start succession planning. 03 8508 6666 | 0417 392 132 | nyoung@trailhomes.com.au | trailhomes.com.au www.brokernews.com.au
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PEOPLE
Aggregator FAST Group
IN THE HOT SEAT
In 2017, John Contarino started his own brokerage, Mobile Finance Broker, in Atherton, a small rural town in Far North Queensland. Now he’s celebrating winning Broker of the Year Regional at the 2021 Australian Mortgage Awards
Winning Regional Broker of the Year at the AMAs is a huge achievement. What was your reaction? My first reaction was total disbelief. I actually A shed a tear. I still can’t believe that a broker in a small regional rural town could take out a national award... and at my age! Winning Broker of the Year – John Contarino, finance broker, Mobile Finance Broker Regional 2021 is truly the pinnacle of my 42 years in finance. I worked in residential and commercial lending at three major banks over 38 years and then went out on my own as a broker four years ago. It truly was a major achievement being What are the property market trends in your area, and what Q loan based in the Atherton Tablelands and being chosen from a record growth have you seen? number of broker nominations from all over Australia. I would never Atherton Tablelands is just like any other regional area in Australia – A it’s gone ballistic. Real estate agents are desperate for listings as they have won without my wonderful team of colleagues and loyal clients. Becoming a mortgage broker was the best career decision. I love what have run out of stock. Property prices continue to increase almost daily, I do, helping people with their loans. especially two- to 20-acre blocks. At Mobile Finance Broker, lending growth has risen 21%, driven by the COVID-19 phenomenon – people wanting to move into regional areas – and federal government incentives. What drives you to succeed as a mortgage broker Q in a small rural town? Q What is the best piece of career advice A With bank services decreasing in Atherton, providing an extremely high level of professional and ethical service to my you have received? clients is what drives me to be successful. When it comes to applying It was from one of my regional managers when I worked in a bank: A keep for a home loan, clients don’t want to talk to someone thousands of in regular contact with your customers; if you haven’t spoken to kilometres away via video link. They want “good old-fashioned them for more than three months, then they’re not your customer. face-to-face service” – this is my business slogan; it’s on all my advertising. I’m fuelled by the positive feedback I receive from my Q What are your goals for clients – posts such as “Congratulations John! A very well-deserved the future? accolade for you and your fabulous team. Here’s to many more years To grow my business, I want to engage another broker. I’m looking A for helping locals bring their dreams to reality”. I am also driven by the a younger, ethical, results- and customer satisfaction-driven satisfaction I derive from assisting my clients to purchase their homes, person whose long-term plan would be to take over the business when especially first home buyers. I retire. AB
Q
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