MPA 24.05 by Key Media

KEEPING CUSTOMERS ON BOARD

24.05

Major banks boost tech and broker support HOW BROKERS RATE NON-BANKS

Hands-on approach and ﬂexibility win praise

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UPFRONT

02 Editorial

Brokers will see the rewards of building strong client relationships

04 Statistics

Home prices heading upwards

06 Opinion

For brokers, change is not only inevitable but necessary, says Blake Buchanan

SPECIAL REPORT

BROKERS ON NON-BANKS

MPA’s annual survey highlights what brokers value most about working with non-bank lenders – and unveils this year’s top medal winners

Flint’s co-founder talks about the development of a brokerage with a unique business model that puts the broker in the driver’s seat

PARTNERSHIPS, SERVICE PAY OFF

Prioritising products, relationships and service wins Bluestone top marks from brokers

FEATURES

58 FHBs remain positive

How brokers can help ﬁrst home buyers achieve their dream

64 e tech revolution

Will the industry make the most of AI’s potential to unlock business e ciencies?

67 Five questions to ask yourself

Tips for priming your mindset to maximise focus and productivity

FEATURES MAJOR BANKS ROUNDTABLE

PEOPLE

70 Brokerage insight

Top 100 broker Thaer Burbar is reaping the beneﬁts of a diversiﬁed brokerage

72 Other life

Sharing the joy of ﬁshing helps Mohammed Zahr build business relationships

Major banks discuss how they are boosting tech and working to support brokers and their clients 32 FEATURES STEPPING UP

FOR SMES

Non-banks and brokers are there for small businesses that need tailored and ﬂexible ﬁnance solutions 48 FEATURES

Our daily newsletter. Keep on top of property market trends, business strategy, and what industry leaders have to say.

Bond with clients will be rewarded

There’s no doubt times remain tough for homeowners, but there are signs of better days on the horizon, and brokers, as always, will have a key role to play in turning things around Australia’s economy continues to lag due to a per capita recession, with GDP per capita falling 0.4% in the June quarter, marking the sixth successive decline. Despite inflation moderating, Aussies are feeling the pinch of the cost of living crisis. And while the official cash rate hasn’t moved since November, mortgage holders are still impacted by higher interest rates due to the Reserve Bank’s 13 cash rate increases since May 2022.

But the MFAA’s August 2024 refinancing and mortgage stress survey, of 372 mortgage brokers, reveals some improvements for borrowers. It shows that while loan serviceability remains the number one challenge for borrowers, only 68% of brokers identified it as the main reason clients had been unable to refinance in the past six months, compared to more than 80% previously.

The number of brokers’ ‘mortgage prisoner’ clients also fell, from 82% in July 2023 to 69% in August 2024. And over half (56%) of brokers found the 1% serviceability buffer for ‘like for like’ refinances had made it easier for their clients to refinance.

Customer

Customer Success Executive Shara Cruzat

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However, the cost of living is a growing concern. More than a quarter of brokers surveyed said it was the most likely reason for financial stress. But two stats stood out – 91% of brokers said clients had used them for the first time to refinance, and 98% had helped clients refinance to a new lender in the previous six months.

What this says is that brokers continue to enjoy the trust of borrowers who need brokers’ expertise to help them navigate the complex and competitive world of lending.

While the refinancing boom is over, borrowers are still looking to brokers to help them find a better deal. This will only ramp up when the RBA eventually cuts interest rates and the economy improves. It’s then that the efforts of brokers to build strong relationships with their clients will pay off.

In this issue of MPA, we explore several market segments that bring opportunities for brokers, including SME lending, first home buyers and the development of broking technology. In our annual Major Banks Roundtable we look at how major banks and their broker partners have worked together over the last 12 months.

The results of the 2024 Brokers on Non-Banks are revealed, and the Big Interview cover story focuses on brokerage Flint, which has a unique structure and strategy.

Enjoy reading MPA’s October edition.

AUSTRALIAN BROKER simon.kerslake@keymedia.com T +61 2 8437 4786 NZ ADVISER alex.knowles@keymedia.com

T +64 9 200 1319

CANADIAN MORTGAGE PROFESSIONAL chris.anderson@keymedia.com

T +1 720-441-2255

MORTGAGE PROFESSIONAL AMERICA chris.anderson@keymedia.com

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MORTGAGE INTRODUCER (UK) matt.bond@keymedia.com

T +44 203 868 3406

ESTATE MARKET OVERVIEW

NATIONAL HOME VALUES RISE AGAIN

$10.9trn

Value of Australian residential real estate

National home values rose 0.5% in August, marking the 19th consecutive month of growth, though the pace is slowing, CoreLogic reports. The quarterly increase was 1.3%, less than half the rate of the same period in 2023. Growth varied regionally, with Perth, Adelaide and Brisbane seeing the strongest gains, while Melbourne, Darwin and Hobart experienced declines.

$1.2trn

Value of Australian commercial real estate

HOME VALUE INDEX AS OF 31 AUGUST 2024

CAPITAL CITIES CONTINUE PRICE GROWTH

PropTrack reported a 0.22% rise in national home prices in August, marking 20 consecutive months of growth. Perth led with a 23.2% annual increase, while Melbourne prices fell

11.2 million

of Australian dwellings

Proportion of household wealth held in housing

in August, declining for the ﬁfth month in a row. Tight supply and strong demand drove growth in markets like Perth, Adelaide and Brisbane, while Melbourne faced weaker momentum and investor challenges.

APRA REPORTS RECORD HOUSEHOLD SAVINGS

Household deposits at Australia’s banks reached a record $1.5 trillion in July, with $30.8 billion added that month. Since the start of rate hikes in April 2022, deposits have increased by over $230 billion, according to APRA data.

The

value of new housing loans rose 1.3% in June to $29.2 billion, with investor loans rising 2.7% and owner-occupier loans up by 0.5%. Investor lending rose 30.2% annually, led by strong growth in NSW, Qld and WA, the ABS reports.

VALUE OF NEW BORROWER-ACCEPTED LOAN COMMITMENTS (SEASONALLY ADJUSTED)

TOTAL APPROVALS STILL BELOW FIVE-YEAR AVERAGE

The total number of dwellings approved in July rose 10.4% to 14,797, following a 6.4% decrease in June. Despite this increase, approvals remain 5.1% below the ﬁve-year average, according to ABS data.

Brokers must review and adapt

Change is not only inevitable but necessary for brokers to successfully serve their clients long into the future, says SFG’s Blake Buchanan

I HAVE seen a lot of great things happening within the mortgage broking industry over the last two decades and in particular the excellence that we have achieved in serving our clients. As Australians’ preferred choice of ﬁnance vehicle when it comes to asset ownership, brokers have loyally and professionally served their clients and now dominate the lending landscape.

For many years I have heard the pundits talk about adaptability, and I have learnt that this is more than a simple cliché; rather, it is the most appropriate noun to describe brokers.

In the scheme of things, we are a relatively young industry, having been around for less than 40 years. When you reﬂect on our age and the important work we do, alongside the many changes and scrutiny we have faced – whether involving remuneration, regulations or other areas – in hindsight, we see that much of this has made us stronger and highly regarded by the most important stakeholders, such as lenders, clients and the government.

Nonetheless, and regardless of whether we want change or not, it is not only inevitable but required, particularly if we are to continue to serve our clients beyond the mid-term.

Our

why

A common theme of ‘our why’ is that we want to help people. This is the primary response when you ask brokers why they got into this industry, and it is one of the things I am most proud of.

The lending landscape is complex and competitive – this is why borrowers need brokers. Whether borrowers use a broker or

not, they all beneﬁt from brokers. This is because brokers open up competition and drive interest rates and fees down as lenders compete for your business.

Just as people seek out accountants for tax advice and help with returns because they are experts, consumers similarly seek out brokers in the lending ﬁeld to validate their borrowing choices. The key word here is ‘people’, as people want to have a relation-

Running a business is hard, but it is made harder if you are smaller and need to look after all facets of a business yourself. This requires a high degree of business discipline to achieve success, and many more brokerages are opting to outsource and/or scale up so they have assistance in running their businesses.

Tomorrow’s solutions

There will always be new problems to solve, but for today we can solve many that will have a meaningful impact on our businesses and the service we o er.

By taking the time to review your biggest asset – your client base – you can discover how to be more e cient. It’s crucial to know key market insights, such as client behaviours, run-o , conversion rates and why clients choose us. With a deep understanding of your business, you can identify areas that will improve your service and output.

If you wonder about high-performing brokerages and how they have the time to

We can see the trend of brokerages becoming more sophisticated and structured as single-operator numbers decline in favour of growing or joining a ﬁrm

ship with someone who can be trusted, who can guide them and be their expert.

Brokers will always be required, but this does not guarantee that we will be as relevant to future generations without adapting.

‘How we do things’ will change, but ‘what we do’ won’t. This is why we must continually review our model and adapt to ensure that we remain relevant and accessible to borrowers, serving their best interests.

Change is here to stay

We can see the trend of brokerages becoming more sophisticated and structured as singleoperator numbers decline in favour of growing or joining a ﬁrm.

As our industry is continually scrutinised, mortgage brokers should also scrutinise their business models and sustainability in a changing ﬁnance world.

do it all, it is because they are always reviewing their own performance and making adjustments.

If you are looking for somewhere to start, begin by building your customer experience process. This is really about penning a process for how your customers experience your service.

Then, engage your systems providers to customise and automate as many of these interactions as possible. That way you will have a consistent approach and be well on your way to maximising output against e ort with better results.

Blake Buchanan is the general manager of aggregator Specialist Finance Group. He is an expert in the broker channel with some 20 years’ experience in the nance industry, specialising in broking, lending and aggregation.

CHRIS BATES: HOW BROKERS CAN OWN THEIR FUTURE

MPA Top 100 broker Chris Bates talks about the development of Flint, a new type of brokerage that provides brokers with the tools and support to drive success while ensuring they retain ownership

AWARD-WINNING

mortgage broker Chris Bates has a vision: to develop brokers into niche experts who are equipped with the tools to reach their true potential and can retain control over their own businesses.

Bates, who has featured in MPA’s Top 100 Brokers list in the last four years – 2020, 2021, 2022, 2023 – and this year too, is the managing director of financial services brokerage Flint. He and Flint CEO Christian Stevens launched the business in February 2024 with a focus on providing an extensive range of lending solutions, superior technology, and a unique business model that puts the broker in the driver’s seat.

Bates has been in the mortgage industry for a decade and says his first five years as a broker were very difficult.

“The first five years were incredibly tough; I only settled $130 million,” Bates says. “Even after having seven years as a financial adviser and knowing how to sell advice, the transition to building an excellent mortgage brokerage is much more complicated than anyone believes.

“There are enormous challenges in building a talented team and driving efficiency while maintaining profitability and a trusted engine required to scale up.”

Bates started Blusk, a joint financial advice and mortgage broking business, in 2014, partnering with Ben Sum, who is now an owner of Flint alongside Bates and Stevens. The

pair sold the financial advice division of Blusk in 2020 to focus on mortgage structuring, helping higher-income Australians with complex property strategies.

“We learnt many lessons and settled over $1.4 billion,” says Bates. “More importantly, we built an engine and process required to scale.”

Among the lessons learnt were how to deliver great client experiences by providing quality

boutique brokerage mindset and build something more impactful”.

Flint aims to become a national, advicedriven finance brokerage, says Bates. Its strategy is to have a group of brokerages operating under one process and one team to change the financial future and lives of 10,000 Australian families annually.

Flint has developed a unique business

“The elephant in the room must be addressed: why would you work in a brokerage and not own your trail book or any of the business?”

advice and building a solid reputation in a target market. These strategies came in handy when Bates and Stevens met in 2019 and eventually formed a partnership five years later.

“We openly shared learnings, debated our plans and celebrated each other’s success,” says Bates.

He and Stevens discussed creating something more significant. “We knew the future of broking needed a much bigger team and investment in consumer-leading technology to thrive in the digital revolution of broking.”

Realising that their strengths, as well as those of Sum, were complementary gave the trio the “confidence to step out of a small

model – Flint Director. “This offers to elevate highly aspirational, experienced and talented brokers by building a long-term profitable asset they own in an environment, team and system that helps them settle much more and much faster than they would achieve trying to make a brand themselves,” Bates says.

The director model enables brokers to confidently focus all their energy on frontend business-generating activities, knowing they have an experienced back-end team to deliver exceptional customer experience and strategic advice.

“We focus on developing brokers into niche experts, powering them with sales tools and

Name: Chris Bates

Title: Managing director, mortgage broker

Company: Flint

Years in the industry: 10

Career highlight: “Moving from a sole broker to building a genuine business. I went from struggling to settle $45 million to settling $320 million in just three years and will do $500 million plus this financial year”

Career challenge: “The biggest challenge was building a business, brand, culture and team that people want to be part of in the long term”

BIG INTERVIEW

technology while leveraging social media to build an online brand presence that enables them to land critical strategic partnerships,” says Bates. Brokers have everything they need to break out of the $50 million to $100 million club and comfortably rise up the MPA Top 100, he adds.

Flint also harnesses brokers’ strengths in di erent sectors of the market. Current Flint Directors specialise in areas such as ﬁrst home buyers, private banking, advice partnerships, sports and media professionals, over 50s, real estate partnerships, digital partnerships, women and agribusiness.

“Other key areas we are looking at are commercial, development, expats, professional investors and many more.”

Directors receive support to develop their personal brand, niche-relevant collateral, pitch packs, marketing funnels, thought leadership, podcasts, video content and partnership agreements. “We have built a regular mentorship program from two brokers who have built personal brands from the ground up, all within a custom-built, inspiring o ce environment where directors work together on their businesses,” says Bates.

Flint’s philosophy is to work smarter, not harder, and use client-focused technology and automation as much as possible. This includes HubSpot for marketing automation and lead nurturing and Broker Engine for its CRM.

“We’re currently doing a lot of work with AI and will be rolling out several tools to assist our brokers with outbound multichannel conversations at scale so they can supercharge their growth.”

Flint has an Australia-based, highly qualiﬁed strategy team, mainly with CPA and ﬁnancial planning expertise, which heads up the directors’ support team. This team dramatically increases opportunity conversion.

“Brokers have a team with the knowledge, expertise, top-tier bank status and ability to quickly produce a highly personalised strategy to give the director an optimal chance to win the client,” says Bates.

Once the client joins, over 30 team members are available to provide customer experience,

KEY FEATURES OF FLINT DIRECTOR MODEL

Brokers retain legal ownership of their clients and trail book

Brokers are given the support to become niche experts – Flint provides them with sales tools and technology and leverages social media to build the brokerage’s online brand

Some of the niche areas serviced include rst home buyers, private banking, sports and media professionals, over 50s, real estate partnerships, advice partnerships, digital partnerships, women and agribusiness

Brokers have the support of a highly quali ed strategy team, featuring CPA and nancial planning experts who help increase conversions

The directors’ support team looks after customer experience, credit, loan processing, and settlement and post-settlement services for brokers

was born. Unlike traditional brokerages, Flint’s structure ensures brokers “are in complete control of their future”.

“You’re creating an asset you own and can settle much more than if you are alone, as the team, systems and processes are already built,” says Bates.

“The elephant in the room must be addressed: why would you work in a brokerage and not own your trail book or any of the business?”

Flint created legal ownership for brokers from day one. “If a broker decides to leave, a buy-or-sell event demonstrates how they own their client book long-term.”

In the past, aspirational brokers had only a few choices – they could work as employees or contractors within a business, join a franchise or start a new brand and business. Bates says these options have holes, which is part of why the broking industry is primarily made up of ‘one-broker bands’, with few larger, successful independent brokerages and franchises.

“We believed there had to be a better way to grow a brokerage that top brokers wanted to be a part of and [that] would be mutually beneﬁcial”

credit, loan processing, settlement and postsettlement services.

“Ultimately, Flint’s o er removes the challenges of running your own business and the often-unspoken opportunity cost of distractions to their business growth,” says Bates.

Brokers who become directors are more content because they are part of a team and achieve a better work-life balance.

Bates and Stevens had looked at other successful brokerages for a model that worked.

“We couldn’t ﬁnd one, and we believed there had to be a better way to grow a brokerage that top brokers wanted to be a part of and would be mutually beneﬁcial,” Bates says.

After months spent on research and getting tax and legal advice, the Flint Director model

Large independent brokerages struggle to grow because of the di culties of developing and keeping a talented broker team who can drive growth. Bates says most top brokers eventually decide to leave and start their own businesses to build assets they can one day sell.

He says the contractor model has faced legal challenges related to sham contracting, franchise law and broker asset ownership, while franchises don’t appeal to top brokers because their brands often don’t align with their target market and can present growth challenges.

“We want brokers to join and stay with us long-term because they own an asset, and just as importantly, Flint is a high-value-adding business partner that truly powers their growth.”

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BROKERS ON NON-BANKS

Brokers value non-banks’ personalised, hands-on support and flexible credit policies over brand recognition and commissions but signal growing concern over rates and fees

MPA’S Brokers on Non-Banks 2024 survey cements the broker-lender relationship as a cornerstone of the complex mortgage market. Non-bank lenders continue to carve out a bigger chunk of market share by combining high-quality products with competitive pricing and delivering them with speed.

Hundreds of brokers from across Australia scored the performance of non-banks across 10 metrics, propelling the highest achievers into the winners’ circle.

This year’s data indicates that the best non-bank lenders have strengthened their ties with brokers by adapting their strategies in response to shifting third party channel and customer needs.

One broker highlighted a non-bank lender’s exceptional performance on an unconventional refinancing assessment: “Their flexibility in accepting the client’s situation and recognising that the refinance would greatly improve their financial situation was remarkable.”

Non-banks’ expanding lending prowess –rising to 16% of Australian commercial real

estate debt (ACRED) from 10.4% in 2020 –is no small feat. They have capitalised on opportunities the big four may have missed and were quick to cater for underserved consumers.

“The banks have contracted their appetite for anything that doesn’t fit neatly inside a box,” says National Mortgage Brokers (nMB) managing director Gerald Foley.

“Non-banks see less volume and try to understand individual borrower needs and price risk accordingly. We’re seeing more complicated cases, especially with selfemployed borrowers, that banks struggle to accommodate.”

As in years past, brokers ranked turnaround times among their top priorities, suggesting speed remains critical. There’s general satisfaction, as over half of brokers believe non-banks have improved, and a significant portion noted no change:

• “Most non-banks pick up the deals in less than 48 hours”

• “They seem to be working faster to obtain approvals for us”

There was a striking shift in brokers’ expectations of non-bank lenders as BDM support and credit policy shot to the top of their priority list at first and second place, respectively, from seventh and last place in 2023.

This revelation highlights a need for proactive communication and guidance from brokers’ non-bank partners, as well as lending policies that are in tune with evolving consumer needs and market conditions.

David McQueen, Loan Market’s CEO, points out that non-banks are keenly aware of broker needs, and some of the country’s best BDMs and credit assessors work for them. Delivering on these aspects is essential to giving brokers confidence in their proposition.

“As funding has become more expensive and challenging, non-banks have tilted away from competing against the majors to increase their focus on policy and servicing niches,” McQueen says.

“Competitive pricing is important, but certainty is even more so. For example, can

a lender make this loan work, and how quickly? The best non-banks can make it clear if they can do the loan and how quickly. Consistency is key, and this has never really changed.”

Brokers’ continued emphasis on interest rates, which rose in priority to fourth place from eighth last year, underscores their sensitivity to the impact of competitive pricing on their ability to help clients achieve their ﬁnancing goals.

Better rates are a familiar chant among brokers. Only 6.1% listed competitive rates as a reason to pick a non-bank lender over a mainstream bank:

• “Non-banks are getting better with easier conditions, but interest rates are still a barrier to many clients in this high cost of living environment”

• “It’s down to rates and fees, I’m afraid”

TYPICAL RESPONDENT

Lending products remain a central focus for brokers this year, who gave enthusiastic thumbs-ups for Alt Doc and Alt Doc Prime as the best non-bank products of the year from these leading lenders:

• Bluestone Alt Doc: “simple veriﬁcation process and fast turnaround times”

• Pepper Money Alt Doc: “the best that I have seen so far; using BAS and self-declaration of income has been favourable for my clients”

• Resimac Alt Doc Prime: “by far and away the cheapest solution for low-doc applications”

Two signiﬁcant changes in brokers’ priorities are worthy of note: a sharp drop in brand recognition as a priority suggests brokers desire functional factors and practical support over brand identity; and a shift away from communications, training and development further underscores the need for more direct assistance from non-bank lenders and their representatives.

METHODOLOGY

In this year’s survey, brokers were asked to rank non-bank lenders across 10 categories: BDM support; brand recognition; commission structure; communications, training and development; credit policy; interest rates; online platform and services; product diversiﬁcation opportunities; product range; and turnaround times. Brokers could rank the non-banks with a score out of ﬁve in each category.

Only those institutions that achieved a response rate of at least 10% of brokers for each non-bank were included in the ﬁnal list.

The survey also recorded broker responses on their preferred non-banks in these areas: specialist lending; ﬁrst home buyers; property investors; commercial; alt doc; SMSF; and foreign non-residents.

MPA asked the brokers a series of questions relating to their business with non-bank lenders, as well as which non-bank they would like to see added to their aggregator’s panel, but these did not inﬂuence the overall score.

Years as a broker

WHY USE A NON-BANK?

Non-banks saw a rebound in the number of broker loans put through, with brokers emphasising the need for flexibility to keep momentum going

MPA’S SURVEY showed a significant recovery this year in the proportion of brokers who put loans through non-banks to 67%, nearly catching up with 2021’s high of 69%. This follows a sustained decline beginning in 2022 and bottoming out at just 50% in 2023.

This improvement shores up the nonbank lenders’ increased market share and attests to their efforts over the past year to boost their offerings, service to brokers and competitive products.

“The non-banks seem to be looking less for cookie-cutter applications and will take the time and dedicate the resources to assess scenarios individually,” nMB’s Gerald Foley explains. “Non-banks often need to be nimble, so having the ability to identify niches and change product parameters quickly to meet these opportunities helps brokers enormously.”

The percentage of brokers putting the lowest proportion of loans (20% or less) through a non-bank declined to 50% this year, versus 60% in 2023.

At the high end of loan volume, 10% of brokers put more than 60% of their loans through non-banks than last year, showing an encouraging increase from 8% in 2023.

Non-banks have picked up market share after a period of decline, which industry experts attribute to consumer confidence during uncertain economic times, and service propositions, among other factors.

Loan Market’s David McQueen emphasises that non-banks are often faster at responding to consumer needs and less restricted by regulatory burdens.

“Non-banks do not have the same buffer and affordability issues that banks have, and this has led to an increase in non-bank

HAVE YOU SENT MORE LOANS TO NON-BANKS IN THE LAST 12 MONTHS THAN IN THE PREVIOUS YEAR?

volume,” he explains. “In addition, they have been better at identifying underserved customers. SMSFs and self-employed customers are excellent examples of [where non-banks] have quickly gone to market and addressed customer needs.”

The expected proportion of loans forecast to go through non-banks in 2025 is significantly lower than last year’s estimates – 36% versus 47% – suggesting that nonbank lenders may need to adapt their product and service offerings further to retain broker support and remain competitive.

While growing overall, the non-bank sector faces upcoming challenges and opportunities, including its inclusion in Australia’s Consumer Data Right open banking scheme, targeted for November 2024. ASIC is also investigating potential new regulations.

The opportunities lie in non-banks strengthening their oversight and transparency on governance and risk management, factors that will improve relationships with brokers and benefit their clients.

Brokers stated that non-bank lenders remain the best choice for diverse customers, particularly the self-employed. They offered the following reasons for this:

• Flexible credit policies: comments highlighted credit policy flexibility and understanding, and willingness to accommodate various client needs

• Specialised loan products: catering to niche markets, such as low doc, alt doc, SMSF, special situations, commercial loans and unique client requirements, allowing brokers to expand their businesses through diversification

In the ranking of reasons for using a non-bank, the signiﬁcant rise in clients lacking standard documentation indicates that brokers serve more clients who don’t ﬁt the traditional borrower mould, such as freelancers, small business owners and others who struggle with mainstream bank requirements.

On the other hand, the pronounced decline – to third place from top spot last year – in non-banks taking a wider view than credit score suggests that, while this factor is still relevant, non-banks may be the ﬁrst choice for clients with documentation issues rather than poor credit.

Commenting on a lender’s SMSF product, one broker highlighted “strong servicing and lower level of documentation requirements compared to other lenders”.

Although personalised service placed ﬁfth again this year, brokers ranked it higher than in 2023, highlighting the trend towards a tailored, client-centric approach that the top non-banks are leveraging to position themselves as the friendlier alternative to the mainstream’s more rigid bank experience.

LOAN FLOWS TO

TOP 5 REASONS YOU WOULD PICK A NON-BANK LENDER OVER A BANK

INTENSIFYING COMPETITION DRIVES NON-BANKS TO EXCEL

A positive shift in borrower perception towards non-bank lenders signals signiﬁcant strides the sector has made in reputation and client satisfaction, o setting concerns about brand awareness

BROKERS’ RATINGS of the beneﬁts of using non-banks in 2024 spotlight the growing acceptance year-over-year of nonbank lenders and their products – and illuminates the highly competitive nature of the sector. Although there is a clear runaway winner, a relatively minor point di erence between the gold, silver and bronze medallists highlights the close competition among the top contenders.

The top three non-banks overall won nine golds, ﬁve silvers and three bronzes across all categories except for interest rates. That accolade went to the fourth-place winner overall, Resimac.

Bluestone ended Pepper Money’s six-year streak, winning gold for BDM support as part of a strong performance overall. RedZed and Prospa earned a joint silver for turnaround times; RedZed took the bronze medal for communications, training and develop-

ARE CLIENTS TYPICALLY OPEN TO CONSIDERING NON-BANK PRODUCTS?

WHAT IS THE MAIN BARRIER TO PUTTING MORE BUSINESS THROUGH NON-BANK LENDERS?

More confidence with CommBank.

Empowering you to achieve more for your clients.

Direct access to case managers

From credit decisioning to settlement, brokers can speak directly to the case managers and their dedicated Relationship Manager.

Transformed digital experience

Access to a range of tools and calculators, giving you more control and certainty for your clients before, during and post settlement.

Your Applications and Your Loans

Greater visibility and control of your in-progress applications and post settlement client information.

Adaptable lending options and credit policies

We consider the circumstances of every individual and have a flexible credit policy and lending options to suit your customer scenarios.

Access the same home loan tools as the assessors

Providing your client with accurate information and a faster decision time.

Reliable turnaround times

Always get an answer quickly with our consistent turnaround times of 1-2 days.

BROKERS ON NON-BANKS

ment; and Pepper Money won three golds for product range, product diversity opportunities and brand recognition.

Non-banks in the middle of the rankings with gold wins included ORDE Financial for commission structure.

As in previous years, the golds determined the ultimate champion, and Bluestone was crowned first place overall with a score of 4.07 out of 5. This result, and the other top lenders’ final tallies, outshone last year’s by a significant margin, a testament to the ongoing improvements brokers praised.

RedZed emerged among the top three non-bank lenders brokers wanted to see added to their aggregator panel this year, with ORDE Financial claiming ﬁrst place and Liberty coming in second.

Interest rates are on one side of a doubleedged sword for brokers doing business with non-banks, with 68% citing high rates and fees as the main barrier to ﬂowing more business their way. This can send brokers and their clients to mainstream banks out of the sheer need for more a ordable rates. Brokers appreciate the competitive edge non-banks bring to the market, but some have concerns:

• “Rates are the only reason I don’t use them more”

• “Most of my clients are seeking to reﬁnance to [mainstream] banks within a year due to lower interest rates”

• “Five years ago, fewer non-bank lenders were available, and their rates were horrendous. With more competition in the market, they have become more viable”

• “I think non-banks have improved their o erings but have a way to go in terms of rates”

• “Service levels are being delivered better than mainstream banking, and the real opportunity will be to get into mainstream lending at competitive LVR-banded rates”

• “Postcodes could also do with a review around the nation, as well coming alongside mainstream banking”

HIGHLIGHTS:

BENEFITS OF USING A NON-BANK

Some brokers took a more nuanced approach to non-banks’ pricing, citing their innovative product o erings and ﬂexibility as standout:

• “With the major banks jacking up their interest rates on SMSF loans that they no longer want on their books, it’s an

opportune time to o er the lower rates”

• “Flexible when the client hasn’t completed tax returns”

• “Takes into account di erent scenarios for self-employed clients that might not have two full years of ﬁnancials at the same income level that they are currently earning”

Credit policy

Bluestone

MA Money Liberty

ORDE Financial

Prospa

Bluestone and MA Money

Bluestone

La Trobe Financial

Pepper Money

• “Ability to consolidate tax debts and get clients out of bad situations at a cost that’s not overly expensive”

• “Enables me to put clients into a better financial situation, and then, with guidance, refinance them to a better interest rate once the situation improves, without me losing my income”

The second barrier to using non-banks was a lack of brand awareness, and while a consistent theme year after year, it ranked last on brokers’ importance scale in 2024. Non-bank brand awareness appears healthy, as just 12% of respondents noted it as a barrier this year, compared to 11% in 2023, 20% in 2022 and 27% in 2021.

The number of brokers whose clients were typically open to considering non-bank products has dramatically reversed, rising to 91% and stemming a three-year decline. Last year, 82% expressed confidence in non-bank products, compared to a high of 90% in 2021.

Bluestone won the gold medal for credit policy as well as BDM support, underscoring its strong product and credit knowledge that brokers perceive as a frontrunner.

“Having easy access to a local credit team to back up the BDMs also helps to workshop scenarios to be confident that the answer in the discussion will match the final answer when the application is submitted,” says nMB’s Gerald Foley.

Loan Market’s David McQueen adds, “The role a BDM plays in non-bank lending is critical. Non-banks often support more complex client needs as they can explain what they can and can’t do and respond quickly and correctly on scenarios.”

The survey’s overall results show that brokers increasingly value personalised service and adaptable policies in the complex lending environment. Direct and practical support in helping them grow their businesses trumps a non-bank lender’s brand image.

Non-banks that prioritise operational efficiency while balancing leading-edge service offerings will maintain broker satisfaction.

HIGHLIGHTS: PRODUCTS AND BRANDING

Pepper Money Bluestone La Trobe Financial

Resimac Mortgage Ezy

La Trobe Financial Brand recognition

Pepper Money

La Trobe Financial Liberty

Product range

Pepper Money Liberty Bluestone

TECHNOLOGY, TURNAROUND AND SERVICE

A majority of brokers noted continued improvements in turnaround times, and there is a rising call for enhanced communication to process loans e ectively

NON-BANK lenders have heard brokers’ clarion call on turnaround times being crucial to making or breaking a deal. This year, a record-high majority of brokers – 87% – said turnaround times had improved or remained satisfactorily the same. Far fewer brokers than last year, 12% versus 17%, felt speed had worsened.

nMB’s Gerald Foley observes that most non-bank lenders deliver an acceptable turnaround time, making this factor much less of a di erentiator than in previous years.

“Di erences occur when an application needs more time to understand the transaction’s pros rather than simply ﬁnding reasons to say no,” he says. “With risk-based pricing, non-banks often have greater ﬂexibility.”

Brokers credited enhanced support from top non-bank lenders’ BDMs in quickly executing deals, giving a general sense that more specialist lenders o er quicker turnaround times on assessments, approvals and settlements.

Non-banks have strengthened their processes, resulting in faster turnaround times, as noted by brokers:

• “Most non-banks take a common-sense approach, so it helps when assessors pick up the phone and call the broker for a quick chat”

• “I had a loan looked at, approved and settled within days, and the service was ﬁrst-class”

• “My BDMs push my deals to the front of the queue every time”

Brokers among the small group who believed that times had worsened noted the increased complexity of some deals and lenders’ operational ine ciencies as reasons for this:

• “More volume leads to slower turnaround times”

• “Sta ng levels don’t seem appropriate”

• “It takes much longer when it is a little outside of the box”

Bluestone won gold in the turnaround times category with a hefty margin above its nearest competitor. Brokers mentioned the non-bank speciﬁcally for “its BDM support”, which consistently helps speed and e ciency. Again this year, La Trobe Financial did not rank well for turnaround times. Still, it picked up four medals, including silver for interest rates and bronze for credit policy. Brokers also named La Trobe Financial as their preferred lender for foreign non-residents

HOW HAVE TURNAROUND TIMES AND COMMISSION STRUCTURES CHANGED OVER THE PAST YEAR?

BROKERS ON NON-BANKS

and commercial categories, niches in which it dominates.

Brokers’ suggestions for how non-banks could improve their service remain consistent with last year’s. However, slightly fewer brokers said simpler income veriﬁcation and better-trained BDMs and credit assessors were problematic, demonstrating the progress non-banks have made in these areas.

This year, there was a moderate rise in the number of brokers seeking better communication as a component of exceptional service. Feedback from survey respondents included:

• “Better written processes and after-care, plus better-written checklist and policy”

• “Better rates with higher borrowing capacity”

• “Assessors who understand valuations better”

The proportion of brokers who believed better technology could boost service levels remained consistent with 2023 at 24%, suggesting that the steady improvements non-banks had made hadn’t shifted brokers’ perceptions one way or the other.

HIGHLIGHTS: TURNAROUND, TECH, COMMUNICATION

None of this year’s top non-banks cracked four out of ﬁve marks from brokers for their online platform and services, underscoring the need to embrace new and emerging technologies to create seamless and broker-centric processes, stay at the cutting edge and increase market share. Turnaround times

HOW COULD NON-BANKS IMPROVE THEIR SERVICE LEVELS?

First home buyers seek expert guidance from mortgage brokers.

91% likely to use a mortgage broker to obtain a loan for their property.

Discover more insights into the behaviours and attitudes of over 3,000 first home and additional property buyers.

Source: Helia Home Buyer Sentiment Report 2024. n=3002 total.

WHAT YOU’RE SAYING

“Not yet. In terms of product ﬂexibility and policy decisions, they’re good, but the pricing is not since the cost of funding from non-banks is still at high levels”

“Non-bank policies tend to be more lenient and understanding of a client’s ﬁnancial position”

“They oﬀer faster turnarounds and better BDMs, who actually care and want to service you and your clients”

“They’re not competitive on rates. Systems are not up to scratch, and service levels must improve post-settlement. There are lots of disgruntled customers when dealing with overseas call centres”

“Rates are always a factor, but that’s not non-banks’ niche”

“No, because most are too clunky during the process and charge for valuations instead of o ering free valuations like mainstream banks. Non-banks also have limited internet banking compared to other banks”

“Non-banks are the most crucial element to the future of mortgage broking. At all costs, we must use non-bank lenders at every reasonable opportunity. Without them, our industry will die”

“They provide an alternative view on lending and an opportunity for borrowers who would otherwise not have been able to access credit”

“They are providing more solutions and reasonable serviceability options for the current market conditions”

“Somewhat, but there is more to do. What is disappointing is when non-bank lenders decide to take on bank policies”

FINAL RESULTS

Bluestone stormed to victory in Brokers on Non-Banks 2024, with medals in eight out of 10 categories and voted as brokers’ preferred specialist lender

“WITH A focus on digitisation, we’re investing in new technology to improve and further streamline our approval processes and speed up decisions,” says Bluestone’s chief commercial o cer, Tony MacRae. “We aim to achieve same-day, and often instant, approval for over half of the applications we receive.” Bluestone’s winning strategy involved supporting brokers with the right people in the right roles. The non-bank grew its BDM team by 33% and introduced a state-based

leadership model with senior people on the ground. An education-ﬁrst approach gave brokers access to industry-leading experts.

“This was evident in the work we did in the SMSF space, providing market-leading education on the set-up and working of SMSFs and borrowing within such structures,” MacRae says. “We aim to help brokers grow their business, ensuring they can help a broader range of customers.”

Simplifying processes and eliminating

BROKERS’ PREFERRED LENDERS BY CATEGORY

FINAL RESULTS

unnecessary documents underscored Bluestone’s top performance, cutting the time to unconditional approval by more than half in the last 12 months.

“Through smart technology, simpliﬁed processes, access to credit decision-makers, and BDMs focused on helping brokers grow their business, we can continue to help more brokers and their customers deliver upon their ﬁnancial and homeownership goals,” MacRae says.

BROKERS ON NON-BANKS

PEPPER MONEY

. What strategies or practices set Pepper Money apart in winning gold medals for product range, product diversiﬁcation opportunities and brand recognition?

Barry Saoud, general manager mortgage and commercial lending: Our strategy focuses on being the ﬁrst-choice and leading non-bank, enabling our customers and brokers to succeed. We’ve achieved this through invaluable feedback we’ve received from brokers and customers.

Our emphasis on diversiﬁcation of credit policy, industry-leading technology and e ective BDM support has enabled us to provide brokers with the necessary tools and knowledge to help a greater number of customers succeed.

Pepper Money’s success is ﬁrmly rooted in our robust credit policy. We take the time to understand our customers’ evolving needs and circumstances, o ering diverse products and policy options. We are known for our industryleading turnaround times. Our e ciency is a result of our adoption of innovative technology and automation. We’ve also built strong alliances with our brokers, who trust our brand implicitly.

How do you plan to build on this momentum to drive even greater success?

BS: Pepper Money never stands still, and that’s true in our approach to evolving our o ering to move with the market. Continuous innovation and enhancement of our product o erings and policies are at the heart of our operations.

Across the past 12 months, we’ve introduced new loan products and policy enhancements tailored to the needs of evolving market segments or emerging trends. Just as we do with our residential products, we also provide a near prime option for our commercial and SMSF o erings. This ensures we don’t limit our customers to only the prime category. We most recently introduced policy changes designed to empower brokers to meet the unique needs of their clients, particularly the self-employed.

REDZED

RedZed achieved a tie for silver in turnaround times, a top-ranked broker priority, and a bronze in communications, training and development. What are the factors driving your high performance in these categories?

Calvin Cordle, managing director: A great user experience and fast turnaround times have always been core to RedZed. In FY24, one of our key focuses was further improving operational e ciencies to deliver even better experiences.

We set about measuring key touchpoints, such as assessment turnaround times and the time it takes our teams to answer calls and emails, to track our progress and identify areas for improvement. This has helped take our service levels to new heights.

We also focus on developing educational resources to help brokers learn, grow and liberate the ambitions of their self-employed customers, such as the Self-Employed Broker Academy. We regularly host PD sessions for brokers through our partnerships with the Melbourne Storm, Hobart Hurricanes and the North Melbourne Football Club.

How do you plan to capitalise on your success and reach new heights?

CC: I want the RedZed team to pause and celebrate. This is great recognition of their hard work over the last year, and my congratulations go to all RedZedders. The enhancements we’re making to our product and service o erings resonate with brokers and Australian self-employed small business owners. The best part is that we’re only just getting started.

RESIMAC

Resimac earned gold for its competitive interest rates, setting it apart in the market. What key approaches and strategies drive this standout performance?

Chris Paterson, general manager distribution and marketing: Resimac is proud of this result and to be recognised by brokers for our competitive interest rates. We know that competitive interest rates are a key consideration for brokers, forming an important part of the broader o ering we provide. By deeply understanding these customers, we can often provide options that other lenders may be unable to.

How do you plan to leverage your current success and position Resimac for continued industry leadership?

CP: We are grateful to be recognised by brokers with whom we enjoy working every day. Our team is dedicated to the broker channel, and it’s great to hear we’re on the right track. Brokers know Resimac as a ﬂexible specialist lender. We’re often recognised for our tailored solutions for self-employed and credit-impaired borrowers. We continually leverage insights from sources like Brokers on Non-Banks and our research to guide our focus and improve broker and customer experiences. Some exciting work is underway to continually improve process consistency and decision-making speed while maintaining our ﬂexible and agile approach. We’re also enhancing our digital solutions with more self-service options for brokers and customers to improve their experience.

SIMPLE PROCESSES, STRONG PARTNERSHIPS PAY OFF FOR LENDER

The team at Bluestone Home Loans is celebrating after taking the top spot in

Brokers on Non-Banks for 2024. Chief commercial officer Tony MacRae says the honour is a result of prioritising products, relationships and service

WHEN A non-bank relies entirely on mortgage brokers as a source of its loans, the strength of that lender’s relationship with the third party channel needs to be rock solid.

This is certainly the case with Bluestone Home Loans. Its tireless and focused efforts to grow its team, enhance its product range and online platform, improve credit policies, speed up turnaround times and support and educate brokers have paid off, with Bluestone being named the overall winner of MPA’s 2024 Brokers on Non-Banks survey.

It’s been a rapid rise in the Brokers on Non-Banks’ rankings for Bluestone, which jumped from sixth position in 2022 to third last year and now the No.1 spot.

Bluestone chief commercial officer Tony MacRae says it’s an honour to top the rankings, and it reflects the work the team has put into making relationships, service and products a priority.

“Our products are designed to help brokers grow their business by providing solutions for the customers that other lenders either don’t cater for or, if they do, they make applications complicated,” says MacRae.

“Over the past 12 months we’ve brought in new leadership and expanded our team, lifting our presence in the market. Supporting our BDM-to-broker relationship is also a team of subject matter experts and comms profes-

sionals delivering educational programs that provide real value to the broker.”

MacRae says collaborative efforts across the entire Bluestone business have helped deliver a number of policy improvements. “This has resulted in us becoming easier to deal with, something that we’ll continue to focus on.”

In the Brokers on Non-Banks survey, brokers are asked to rank non-banks across 10 categories – turnaround times; BDM support; commission structure; communications, training and development; interest rates; product range; credit policy; online platform and services; brand recognition; and product diversification.

Bluestone achieved the number one ranking in five of these categories: turnaround times; BDM support; communications, training and development; credit policy; and online platform and services.

The lender also took second place for commission structure and product range and came in at No. 3 for product diversification. This means that out of the 33 medals (gold, silver and bronze) available, Bluestone won nine – an impressive 27% of all rankings.

Turnaround times

MacRae says time is everything for the broker and borrower. “We understand that. We eliminated unnecessary documentation and

simplified processes, making it easier to submit applications,” he says. “We have more than halved turnaround times.”

BDM support

“We ramped up our broker support, introducing state-based leadership with a focus on building relationships and growing the ‘on the ground’ team by 30%,” says MacRae.

Communications, training and development

Collaborating with the marketing and communications team, Bluestone established a regular cadence that ensured “we had simple, clear and regular messages for our broker network”.

“We also ensure that we have open communication between our BDMs and our entire broker network.”

MacRae says market-leading education is important. “We’ve been working with subject matter experts to deliver webinars and workshops such as SMSF and solution-based lending. BDMs also play a critical role in delivering grassroots support and local training and visits for brokers.”

Credit policy

Bluestone introduced over 40 policy changes that have allowed it to provide solutions for more customers, says MacRae.

PROFILE

Name: Tony MacRae

Title: Chief commercial officer

Company: Bluestone Home Loans

Years in the industry: 25+

How important is it for Bluestone to be so highly ranked by brokers? “It will always be important to us. Given that our goal has been to establish the best relationships and service with our brokers and aggregators, to be ranked highly in so many categories is a real honour and a reflection of the dedicated team we’ve built.”

EXPERT SPOTLIGHT

Online platform and services

“We launched a new website that made it easier for brokers to navigate and help their customers with solution-based lending,” says MacRae. “Delivering on providing the best service to brokers and their customers has been the team focus in the last 12 months.”

Alt-doc loans, specialist lending

Bluestone’s alt-doc product was named among the three top non-bank products for the last 12 months. Bluestone was voted the preferred non-bank for alt-doc lending.

As a product o ering, alt-doc enables Bluestone to provide brokers with a solution for borrowers who have varied or nonstandard forms of income, MacRae says. “Banks often can’t or won’t lend to these customers … or just make it tough for them with too many hoops to jump through.

“Our mantra has been to simplify. Our alt-doc o ering has benefited particularly with this focus, seeing simplification in verification for accountants’ letters, the number of documents required for income verification, and turnaround times.”

MacRae says every incremental improvement contributes to a better experience for brokers and borrowers, which of course results in really positive feedback.

Brokers also ranked Bluestone as the preferred non-bank for specialist lending.

“We believe that life or ﬁnancial circumstances shouldn’t necessarily get in the way of a good borrower’s ability to access credit and achieve their property goals,” says MacRae.

“We consider the individual’s circum-

stances, taking a forward-looking approach to provide responsible and accessible solutions for customers that may have had a ﬁnancial hiccup.”

MacRae says it’s critical that BDM and credit teams work closely with the broker to thoroughly understand each case. “Without specialist lending these customers would be shut out of the borrowing market. With this in mind, it’s critical that our BDM and credit

ourselves [up] as the preferred broker partner.”

Bluestone has been around for quite some time, but you can’t stand still, MacRae says. “We’ve got some exciting plans for the future, including digitising the application process with a goal to deliver an immediate decision on many occasions.”

By leveraging tech and data, the lender is well on its way to implementing new platforms and interfaces to provide a better expe-

“Brokers are why we exist. This relationship is very important. We’ve spent the last 12 months listening to brokers, optimising the experience with us and enhancing the lender-broker relationship”

teams are focused on working with the broker to ﬁnd the pathway to yes.”

Competitive market

There’s no doubt that Bluestone is operating in a highly competitive market. MFAA data for the June quarter shows mortgage brokers wrote 73.7% of all new home loans.

For Bluestone, the broker channel is vital – 100% of its loans are broker introduced. “Brokers are why we exist, and so this relationship is very important; it needs to be nurtured,” says MacRae. “We’ve spent the last 12 months listening to brokers, optimising the experience with us and enhancing the lender-broker relationship, increasingly setting

rience and service for brokers and their clients. MacRae says people must not forget that purchasing a home is, in most cases, the largest ﬁnancial transaction any of us will ever make. “Borrowers need and want support through the often-stressful process. Tech can facilitate the speed and ease of a transaction, but we are still a relationship business, and understanding borrowers’ needs and being able to ﬁnd suitable solutions for them is equally important – this is where we’ll continue to focus.”

Expanding its product range is a key focus for Bluestone in 2025, says MacRae. This will enable the non-bank to provide solutions for more customers, cementing its relationship with brokers as a preferred partner.

CATEGORIES IN WHICH BROKERS RANKED BLUESTONE NO. 1

BROKERS BENEFIT AS BANKS UPGRADE TECHNOLOGY

In a competitive market in which many borrowers are struggling due to economic pressures, customer retention is crucial. At MPA’s Major Banks Roundtable, third party leaders discussed how they partner with brokers to support customers, as well as the investments they are making in AI and other technology tools

NOW THAT the cashback battles are truly in the rearview mirror, major banks are not so narrowly focused on winning new customers – it’s keeping existing customers that remains vital in the current market.

While the figures fluctuate, it’s clear the refinancing boom is over. The latest data from PEXA’s Refinance Index for the week ending 15 September shows a 17.5% year-on-year drop in mortgage refinancing volumes.

This doesn’t mean mortgage holders aren’t reﬁnancing, just that activity has slowed. ABS lending indicators for July 2024 show the value of external reﬁnancing for total housing (both owner-occupier and investor) rose 4.3% to $16.6 billion but was down 21.4% year-on-year. External refinances are new loans obtained to replace existing loans provided by di erent lenders.

The KPMG major Australian banks half-year 2024 report shows that net interest margins continue to decline, and it’s always more cost-e ective to retain borrowers on the books than to acquire new ones.

Mortgage brokers are a vital piece of the puzzle in any major bank retention strategy. The trust and conﬁdence Australians place in brokers is at an alltime high: brokers wrote 73.7% of all new home loans in the June 2024 quarter, according to the MFAA.

With this in mind, the major banks are working hard to foster strong relationships with brokers and their clients. This includes providing support for customers undergoing ﬁnancial di culties and assisting brokers when it comes to retention conversations.

But it’s also about upgrading technology, including the use of AI, to streamline and speed up loan processes and decisions, and giving customers a better life-of-loan experience.

To discuss these and other issues, MPA hosted the 2024 Major Banks Roundtable at Café Sydney. Representing the major banks were Adam Brown, executive, broker distribution, NAB; Wendy Brown, head of broker distribution, Macquarie Bank; Razia Khan, general manager third party banking, CommBank; and Sarah Willsallen, state general manager NSW/ACT – mortgage broker distribution, Westpac Group.

Broker participants included Fabio De Castro, director, Simplify Finance, and Melanie Cunliffe, managing director Indigo Finance.

Natalie Smith, general manager third party at ANZ, was unable to attend in person but provided written responses.

MAJOR BANKS ROUNDTABLE

THE PANELLISTS

BROKERS

The home loan market remains highly competitive. Major banks face declining net interest margins, competition from non-bank lenders, and borrowers who are struggling with higher interest rates and inflation. How are you meeting these challenges and working closely with brokers who now have a market share of 73.7%?

Innovation and exceptional service, superior technology, listening to broker feedback and partnering closely with brokers to support their clients for the life of the loan – these are some of the main factors driving major banks in a competitive sector.

The major banks have adjusted to customers’ changing economic circumstances during a cost of living crisis that’s been hitting people hard.

After 13 increases to the official cash rate since May 2022, some clients’ mortgage buffers were running low or had depleted altogether. This meant both the banks and brokers had a greater focus on clients’ finances and spending habits and on helping them determine the right time to borrow rather than ‘how much can I borrow?’.

Willsallen said it was great to see so many lenders wanting to support customers into homeownership.

“That competition drives innovation, and it drives service excellence, which is good for all of us,” she said. “We do need to ensure

that we manage mortgage returns to build a sustainable business, and we’ll continue to focus on the right balance of risk, margin and volume.”

Willsallen said Westpac was pleased that the investments it had made over last three years to improve broker technology, systems and tools had driven such strong improvements in time to decision and in its Net Promoter Score from brokers in the last 12 months.

Westpac has been listening to broker feedback about what it should focus on to make further improvements. “We’re committed to doing all we can to make it easier, simpler and faster for our brokers and customers,” Willsallen said.

Khan emphasised CommBank’s strong partnership with brokers. “CommBank has been supporting brokers for over 30 years now to help grow their businesses,” he said. “We understand that brokers play a crucial part in a stable economy.”

The bank has invested heavily in broker technology, such as its CommBank broker portal (Your Loans, Your Applications). It focuses on listening to brokers to understand “what they want and need”.

“We want to ensure their experiences with CommBank remain seamless,” Khan said. Looking at how to diversify support for brokers was also important; using data insights and analytics to help brokers understand and grow their businesses.

“We’re also doing a lot of work around diversity and inclusion, such as for women in business, and providing additional support from our sales team.”

Smith said that in a highly competitive home loan market, ANZ was committed to standing out through innovation and exceptional service.

“As broker market share reaches close to 74%, we are dedicated to enhancing our support for this important channel,” she said.

“Our focus remains on delivering differentiated propositions across all channels during these changing economic times. With significant developments like our recent Suncorp Bank acquisition and the expansion of ANZ Plus, we are positioning ourselves to better serve both brokers and their customers.”

Adam Brown said brokers were working in a very different economic environment than they were 12 months ago and 12 months prior to that. Despite the challenging economic conditions, about two thirds of NAB customers were ahead on their home loan payments by an average of three and a half years.

“You hear a lot about people paying ahead and building up buffers, but it actually masks those customers that are a bit more challenged,” Brown said.

Four in 10 Australians had experienced some sort of hardship. In NAB’s past conversations with brokers, customers had been

Adam Brown Executive broker distribution, NAB

Wendy Brown Head of broker distribution, Macquarie Bank

Razia Khan General manager third party banking, CommBank

Natalie Smith General manager third party, ANZ

Sarah Willsallen State general manager NSW/ACT mortgage broker distribution, Westpac

Fabio De Castro Director, Simplify Finance

Melanie Cunliffe Managing director, Indigo Finance

MAJOR BANKS ROUNDTABLE

focused on the maximum amount they could borrow, but this had now switched to ‘how much can I really afford?’, Brown said.

“So the conversation that you then have with brokers is really how do you support these customers through getting a home loan? And when’s the right time to get a home loan? Once they’ve actually got the home loan, how do you best support that customer for the life of the loan?”

Brown said brokers were doing a good job of providing customer support beyond the transaction. NAB is also focused on helping customers for the life of the loan, acknowledging the difficult economy and cost of living challenges.

Wendy Brown from Macquarie Bank said it was clear that the right conversations were taking place between brokers and their customers, particularly around understanding their financial situations. “We’ve noticed that in the quality of that book. Great conversations have happened – what they [customers] need versus what they want and what they can afford.”

More than 90% of Macquarie Bank’s loan flow comes from brokers, Brown said. In terms of technology, the bank focuses on providing platforms and functionality that will help brokers do business whenever and wherever it works for them.

Macquarie Bank works with brokers to

security app, to brokers and their support staff so they can feel confident that they are assisting their customers in the most secure way possible.

“For us it’s about scale and technology but for the best outcomes for the customer and broker,” said Brown. “The more control we

“We are seeing more instances of application fraud. It’s an industry challenge. Automation and checking is critical in identifying that and seeing some of the patterns across our portfolio” Adam Brown, NAB

provide them and their support staff with seamless access to the information they need to help them be more efficient. It has rolled out Macquarie Authenticator, a market-leading multi-factor authentication

can put in a broker and customer’s hands the better.” The information supplied in the broker portal, or that customers could see across mobile and internet banking, “helped to give confidence throughout the home loan process”.

“They can clearly see revert rates – both the broker and the customer. That element of control is really important, especially when you’re coming into a higher interest rate and inflation environment.”

Adam Brown added that the advisory role banks play with brokers and customers was very important. Over time, NAB has built up its premium access proposition, providing a team member who will work with a broker on a loan scenario before it goes to credit assessment and lodgement.

“We know brokers hate that long ‘maybe’ answer versus a really quick no or a quick yes,” he said. “Having that certainty up front, and not wasting time when there’s increased costs and increased regulation, has been really important.”

Wendy Brown agreed that it was important for lenders to provide clear credit guidance for brokers and their customers to ensure a better and more efficient experience in the application stage.

Banks across the world were asked to rank the importance of different technology types in achieving their short-term goals

On the topic of spending and financial capacity, De Castro said roundtable participants would be surprised to know how many owner-occupiers did not have a budget or know much they could afford to borrow.

“When you ask that question, you’d be surprised how people just implode,” he said. Some clients’ redraw [facilities] were running low, and some had run out of savings. “I think the real effects of the rate rise we’re starting to see now [are] eating into buffers.”

A recent NAB consumer sentiment survey showed that almost 60% of people had cut back on eating out; 50% had reduced their ‘micro-treats’, such as buying coffee and snacks; and around 50% had scaled back on entertainment, such as streaming services.

“Twenty per cent of people have cut back on what they’re spending on their pets, such as insurance … all this money is going into loan buffers,” said Adam Brown.

Melanie Cunliffe said customers were now very cautious about their spending and the amount they could borrow for a home loan.

“It’s almost like they think the credit environment is going to be so tough that they’re not going to be able to borrow,” she said. “It’s about coaching them through to the other side and reassuring them ‘we’ll be alright, let’s see what we can borrow, let’s work through it together’.

“I think people are very nervous because of interest rates that they’re going to lose that possibility of homeownership.”

What AI-driven tools or data platforms are you using, or planning to introduce, that improve the broker and customer experience? How will AI change the banking industry?

Artificial intelligence is a hot topic at present. News stories and advertising provide constant updates on the latest AI-supported products and platforms that are set to make everyone’s lives easier.

AI is also making huge inroads into the worlds of banking and mortgage broking.

A September 2023 KPMG Global Tech Report found that 60.8% of banking tech-

BROKER MARKET SHARE BOOMS

Mortgage brokers wrote of all new homes in the June 2024 quarter – the second-highest broker market share on record

73.7%

6.5ppt

Brokers’ market share rose in the June quarter from 67.2% one year prior

Value of home loans settled by mortgage brokers exceeded for the first time in the June quarter – jumping $18.64bn from the previous quarter to $100.11bn

$100bn

$11.49bn

Value of home loans settled by mortgage brokers rose by in the June quarter (or 12.96%) year-on-year

“Whether a broker seeks pricing [on a loan] through the Macquarie Bank portal or the customer requested it, the price remains the same for 90 days, providing equality for all”

Wendy Brown, Macquarie Bank

nology leaders believed generative AI, AI and machine learning would be critical to achieving short-term ambitions.

Wendy Brown said it was often underestimated just how long AI had been in use. Macquarie had been investing in AI for several years in a number of different ways, alongside a range of other data science technologies, including machine learning.

“We’ve been using it for some time across different use cases; historically, for example, we would use it on the risk of a street or a postcode, or property or valuation.”

Brown said a key benefit of AI was that it freed up time to enable the bank’s teams to focus on higher-value engagements. Instead of manually reviewing documents, they could focus on engaging with and providing insights to brokers.

Macquarie Bank uses AI in the loan and documentation review processes, which helps to deliver even faster turnaround times for customers and more efficient experiences for brokers engaging with the bank. It also uses AI to detect instances of fraud and scams.

MAJOR BANKS ROUNDTABLE 2024

Macquarie Bank takes a copilot approach with AI, “with a human overlay, and we have found that to be very successful”, said Brown.

“We work in a highly regulated environment, so it’s vital that there is the right level of oversight and governance on AI and other data science processes.”

Willsallen said she has a favourite quote when it came to AI: “I don’t want AI to paint the next Picasso for me – I want it to clean my kitchen so I have time to learn how to paint.”

She agreed with Wendy Brown that AI had been part of banking infrastructure for a long time. “We want to see where it adds value to make things faster and simpler,” Willsallen said. This includes use in document identiﬁcation and veriﬁcation and ensuring these are aligned with policy.

“Where it can make it faster for humans

because they then don’t need to check something, that’s gold,” said Willsallen. “It makes it faster and easier for our team members, for our brokers, but also means we get outcomes for customers faster.”

Adam Brown said AI is critical to driving efficiency internally at NAB but also to speeding up lending outcomes for brokers and customers. AI also detects trends in large data sets, which is valuable for combating fraud and scams and boosting security.

“We are seeing more instances of application fraud,” Brown said. “It’s an industry challenge. Some of the automation and checking is critical in identifying that and seeing some of the patterns across our portfolio.”

At CommBank, Khan said AI and other technology is being used for fraud detection but also to help customers predict their bills

and know their cash ﬂow, often through the CommBank app.

The bank has also introduced Benefits Finder, which has put $1.2 billion in government benefits and grants back into the pockets of customers.

CommBank also generates data insights that are particularly aimed at growing broker businesses. “It can highlight di erent triggers that your customer may be about to reﬁnance. Have a conversation with them if you haven’t already,” said Khan.

Smith said ANZ’s commitment to leveraging technology is transforming how the bank serves its customers and supports brokers.

“Our recent partnership with Microsoft to establish an AI Immersion Centre signiﬁes a major step forward in accelerating AI adoption across the bank.

MAJOR BANKS ROUNDTABLE 2024

“We’re empowering our leaders to drive innovation and enhance services. AI is integral to improving customer experiences, protecting clients and streamlining processes, all while adhering to our core principles of risk, privacy and ethics.”

Smith said that while technology evolved, it would never replace the essential human touch in banking. “Instead, AI will complement and enhance the personal relationships that brokers and lenders provide, creating opportunities for a more seamless and insightful customer experience.”

Broker question from Melanie Cunliffe: What are your plans around investing in and using AI in enhancing the ‘broker channel’ model in comparison to ‘direct to consumer’, and how are they different?

Willsallen said Westpac doesn’t see a difference in the way it approaches AI and technology for brokers and their clients. “We want to make it faster for every customer, regardless of whether it’s through a broker or directly,” she said. “Our lending origination capability that manages this for us manages it agnostically across our channels.”

But there are some specific differences, Willsallen said. For example, when broker applications come through ApplyOnline it involves an assessor rather than a lender. “If the technology makes an assessor’s job faster, it’s also going to make a lender’s job faster and vice versa.”

Westpac focuses on how to make processes work faster for customers, providing quick, correct and valid answers.

Khan said introducing AI policies and processes is occurring faster with brokers than consumers. “Because we’re dealing directly with brokers, we can be faster with the right compliance overlay … with direct to consumer, there’s a few more checks and balances that we need to be confident of.”

The digitisation quality in CommBank’s loan application processes remains the same for both broker and direct-to-consumer channels. “Our goal is to try and digitise a big

part of the back end so brokers and lenders get a faster time to yes,” Khan said.

Adam Brown said NAB continues to work on its new origination platform. “We’ve got one in three of our unconditional approvals going through the new platform. We started with the broker channel because we’ve got 60 to 65% of our [loan] flow coming through the channel,” he said.

Brown said that when it comes to digitisation and AI automation, it makes sense to start where the volume of business is the greatest – the broker channel.

“In the face of increasingly sophisticated

scams, it’s imperative that brokers and banks alike invest in robust processes and cuttingedge technology to enhance our prevention and detection capabilities.”

NAB’s proprietary channel and commercial broker business will also be included in the one origination platform, providing a similar experience for customers no matter the channel. “It’s build once and apply to all, as opposed to the past, where many of us looked at channel-by-channel decisions,” Brown said. “That’s not efficient; it’s costly, and it’s hard to maintain.”

Wendy Brown said that at Macquarie Bank

the approach used to be to trial technology tools in the direct-to-consumer channel first and then “iron out any kinks” before rolling the functionality out to brokers. But the bank has evolved that process to pilot new technology with a group of brokers first before launching more broadly, and this has worked successfully.

“Broker feedback is so important to us, and we know that our perception of what they want and need, and what takes time in a broker business, may be different to their perspective, so this process is important to get a deeper understanding.”

Transparency is key, Brown said, and Macquarie has a consistent approach, reinforcing the broker’s brand in market.

De Castro said everyone seemed to agree that AI was not being used to replace people’s jobs but to boost efficiency.

“I love AI because if it makes you [banks] more efficient, it makes me more efficient, and that leads to retention.” He said it also

“CommBank has been supporting brokers for over 30 years now to help grow their businesses. We understand that brokers play a crucial part in a stable economy” Razia Khan, CommBank

meant that banks could allocate resources to make sure that RMs and BDMs were meeting brokers, uncovering their needs and helping them grow their businesses.

De Castro said he loved the fact that broker market share had almost reached 74%, but he believed some brokers had the attitude that this meant ‘banks need brokers’.

“We need each other,” he said. “We need to remember we’re all on the same path. We’ve got to evolve together as an industry.”

He hoped the “old-school mentality of brokers that played golf and lived on trail” was gone. “It’s a bad image for people like me who are trying to build actual businesses,”

De Castro said. He said he hated rewriting loans because doing that meant his books size wasn’t growing.

“It’s about that partnership [with banks]. What can we do to empower customers to stay where they are?”

Broker question from Fabio De Castro: What tools and processes are being implemented to empower brokers in retaining our mutual customers?

Leading into to his question for the major banks, De Castro said they all did an amazing job, but retention was challenging.

He gave the example of going to a client’s bank, trying to get a better loan deal, and being given an offer that did not meet the customer’s expectations.

He would do all the work to find a better rate at another lender and gain approval for that loan, only for the original bank to say at the last minute that it would match the rate.

“This makes me look bad because I’m the introducer, and the client will think next time I will go to NAB or CBA directly because I can get a better rate … I’m a small business owner, so earning and keeping trust, it’s one of the hardest things to do.”

The second issue was all the paperwork and time he had spent going to another lender to get the loan approved when the original lender could have provided the broker with a better rate initially.

De Castro said brokers that didn’t churn their books and retained clients with the same lender should be empowered.

Responding to De Castro’s question, Wendy Brown said that, regardless of whether a broker reached out through the portal or

MAJOR BANKS ROUNDTABLE

“We are dedicated to reﬁning our home loan processes by listening to broker feedback, investing in team upskilling and enhancing broker tools. Our goal is to lead with a streamlined, superior service” Natalie Smith, ANZ

their customer contacted Macquarie directly, there was a consistent rate that remained in place for 90 days, which was a fair and transparent approach that provided everyone with conﬁdence.

De Castro said that if all banks could agree to prices remaining in place for 90 days, that would be best practice.

Khan said there were always opportunities to improve bank processes for brokers. About two years ago, CommBank had stopped making outbound calls once the discharge process was in place.

“We o er a discharge form at the time the customer made the call,” she said. “At that point we give you your pricing. If you don’t want to accept the pricing, we give you a discharge

form. That will be the last interaction.”

Willsallen added that Westpac had invested significantly in its pricing tool to provide the best possible pricing for customers through the Broker Hub. “That now matches what historically the customer might have needed to ring our retention team to be able to get, which really supports the broker,” she said.

“The other thing we’ve been piloting is that when we do get a discharge request for a broker-managed customer, we actually ring the broker.”

Cunli e said she had received a call from Westpac Group under this process. “The call wasn’t, ‘hey, we’ve received a discharge request’,” she said. “It was, ‘one of your

clients has talked to us about if I do want to discharge the loan, what does that look like?’ They haven’t actually requested the form, but we were really surprised and pleased to get the call.”

Willsallen said an almost 74% broker market share across the industry was really strong, but it also meant one of the challenges was customers dealing with multiple brokers at once.

“That’s a change in customer behaviour that we didn’t see ﬁve or 10 years ago. We want to help support our partners and set up long-term partnerships. It’s about making sure brokers have that visibility.”

Wendy Brown agreed that a new dynamic was in place. “It used to be branch to broker; it’s now broker to broker.”

What strategies and programs

have major banks implemented to support customers struggling to meet their mortgage payments, and how can brokers assist in connecting these customers with the assistance they need?

According to the latest Roy Morgan research, 29.8% of all mortgage holders (equivalent to 1.6 million people) were ‘at risk’ of mortgage stress in the three months to July 2024. This represented a drop of 0.5% points on the June ﬁgures after the introduction of the Stage 3 tax cuts in July increased household income for millions of Australians.

Since May 2022, when the Reserve Bank began lifting interest rates, the number of Australians ‘at risk’ of mortgage stress has increased by 797,000.

So, how are the major banks helping those who are struggling?

Wendy Brown said it was all about providing transparency and giving customers the ability to check their revert rates and review their own pricing with the support of a broker. “I say this every year: when a customer feels like they are struggling, engage with us early,” she said. “The earlier we know, the earlier we can support, and often the outcome is much better.”

MORTGAGE STRESS

“We’ve been listening to broker feedback about what we should focus on for further improvements. We’re committed to doing all we can to make it easier, simpler and faster for our brokers and customers” Sarah Willsallen, Westpac

Many Australians are feeling cost of living pressures, Willsallen said. “We encourage any customer doing it tough to get in touch with us sooner rather than later to discuss options. There are so many options

available that we’ve got dedicated teams standing by ready to assist, and we can offer them a really tailored, individualised hardship approach.”

Adam Brown said he was very proud of the

NAB Assist team, which helps customers with restructures, repayment holidays, long-term extensions and payment breaks.

NAB has set up an internal counselling service for people who are doing it tough. It’s run by a third party and available to bank staff as well as brokers.

“Brokers are Australian customers as well, and they’ve got small businesses, and they’re feeling the same pressures, and sometimes they need someone to talk to,” Brown said.

He added that NAB’s role in the community is important – extending beyond supporting those with cost of living pressures to helping people who have suffered from bushfires and flooding by providing grants “to help them get back on their feet”.

Smith said, “ANZ remains steadfast in our commitment to provide support to those customers facing financial difficulties. With home loan hardship rates increasing across the sector – although still at a relatively low base historically – our strategy involves proactive engagement and a range of tailored assistance options.”

payments or financial hardship support measures. We want to ensure that people don’t go into arrears, and we are trying to set up our customers for success.”

Cunliffe said sometimes when clients raised their financial hardship with their bank, it had affected them negatively down the track, with loan increase rejections, for example.

“AI is not being used to replace people’s jobs but to boost efficiency. I love AI because if it makes the banks more efficient, it makes me more efficient, and that leads to retention”

Fabio De Castro, Simplify Finance

The bank has also enhanced its outreach with initiatives such as proactive hardship offerings and simple payment reminders.

ANZ’s dedicated teams, including Customer Connect and the Extra Care Hub, are focused on delivering personalised support that takes an individual customer’s circumstances into account.

“Brokers play a vital role in this ecosystem by connecting customers with these resources, ensuring they receive timely assistance to help navigate their financial challenges,” Smith said.

Khan said she highlights to brokers that if they believe their customers are experiencing any form of financial stress, they should reach out early to CommBank’s hardship team and encourage the customers to contact the team.

“We’ve just introduced a whole new range of offers which are bespoke to what that customer needs at that point in time.”

CommBank also operates a cost of living hub, money management tools and financial support. “We’re doing quite a lot to really help educate customers.”

Wendy Brown said it was the banks’ role to assist customers suffering hardship. “It’s important that customers recognise the options available to them, such as reduced

“Sometimes they’ll say, ‘why did the lender offer it to me if it was going to potentially impact me in the future?’.”

In these cases, Cunliffe said it was valuable for brokers to have conversations with their clients to make them aware of the potential impacts if they tell the bank about their financial difficulties.

Considering underlying inflation, unemployment and other economic factors, where do you see the lending landscape heading in the next 12 months, and what are you doing to prepare for these market changes?

Khan said the economy is still absorbing the shocks of the past few years, but CommBank remains focused on supporting brokers.

“Higher rates have had the intended effect of lowering household demand. Inflation is falling, but the pace has slowed.

“Households are finding it more challenging to respond to the higher price environment. We’re also anticipating some relief this year, with disposable income set to rebound, but it will be important to keep demand constrained across the economy so that inflation returns to the target band.”

Khan said domestic challenges remain, including productivity growth and housing affordability, but Australia’s economy is still fundamentally sound and stronger than many international markets.

“Unemployment remains low, business investment high, and exports are strong.”

Willsallen said that as Australia’s first bank, Westpac has a long history of helping

customers navigate various economic cycles, each with their own mix of challenges and opportunities.

“Homeownership will continue to be a very important part as customers seek to secure their own slice of the Australian dream –whether it’s ﬁrst homes, upgraders, downsizers, investors or sea changers,” Willsallen said.

Westpac is proud of being a Home Guarantee Scheme partner. The bank’s own family guarantee policies also enable di erent pathways to homeownership.

“Our focus is on continuing to make improvements to our systems, tools and processes so we can be faster and easier to do business with,” Willsallen said.

NAB economists have predicted a cash rate reduction in May 2025, said Adam Brown. “We’re still expecting growth in our economy, and that’s the message. It’s slowing but still growing,” he said.

“We’ve still got strong employment, and while we continue to have a robust workforce and low unemployment, then we’re weathering the storm better than most. We

“Some customers think the credit environment is going to be so tough that they’re not going to be able to borrow. It’s about coaching them through to the other side and reassuring them”

Melanie Cunli e, Indigo Finance

see unemployment increasing a bit, but still below pre-COVID levels.”

Wendy Brown said Macquarie Bank economists believe the ﬁrst RBA cash cut will happen in February 2025. “However, we are mindful of the current uncertainties with respect to the global economic outlook. If there was to be weaker than expected global economic growth in that period, the RBA would take that into account.”

As Australia faces a landscape of intense competition and economic pressures, Smith

said ANZ is committed to standing out through exceptional service and innovation.

“Looking ahead, we’re preparing for the future by seeking to help more customers following the Suncorp Bank acquisition and expanding our ANZ Plus platform.

“We are dedicated to reﬁning our home loan processes by listening to broker feedback, investing in team upskilling and enhancing broker tools. Our goal is to lead with a streamlined, superior service that meets the evolving needs of both brokers and customers.”

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Stepping up to help small businesses

Faced with the challenges posed by a struggling economy, SMEs are turning to non-banks, private lenders and their broker partners for nuanced and adaptable solutions to meet their finance needs

THE STRUGGLES

that small to medium businesses face cast a grey cloud over the lending landscape, but it’s not all doom and gloom.

While SMEs cope with a spending downturn, higher interest rates and inflation, labour shortages, payment delays and more, this is exactly the time when non-bank and private lenders and their broker partners are stepping up.

Commercial and asset finance brokers are perfectly placed to assist their clients with the tailored and flexible finance solutions that non-banks offer, from alt-doc or low-doc loans to cash flow lending or extinguishing tax debt.

MPA asked third party heads from Assetline Capital, Aquamore, Liberty, Millbrook Group, Pepper Money and Prospa for their insights on SME lending and about the opportunities for brokers. David Bushby, CEO of CAFBA, also shared his views.

Financial challenges

The Equifax Quarterly Commercial Insights June 2024 report showed business credit applications falling by 1.6% overall, including a -0.2% drop in business loan applications, an 8.1% decline in asset finance applications, and a 3% rise in trade credit applications.

NAB’s Monthly Business Survey for August showed business confidence in negative territory, while business conditions also fell, and purchase cost growth rose to 1.6%.

So, how can non-banks and private lenders work alongside brokers to adjust their strategies accordingly and support business growth?

Royden D’Vaz, Assetline Capital’s general manager of distribution and partnerships, says the non-bank strives to adopt a proactive and flexible approach “to adjust to what the market is telling us”.

“It’s essential as a non-bank lender that we

help them understand and respond to the shifting trends in SME lending,” D’Vaz says. “This includes understanding which sectors are showing growth.”

George Lyall, head of origination at Millbrook Group, says the non-bank works closely with broker introducers to ensure loan applications are properly vetted and assess the client’s borrowing capacity.

“We always aim to equip brokers with up-to-date market insights, training and tools that help them understand and respond to the shifting trends in SME lending”

Royden D’Vaz, Assetline Capital

continue to effectively support the business growth of brokers, who trust us with their borrowers’ financial needs and objectives,” D’Vaz says.

Brokers are encouraged to focus on areas of continuous demand such as short-term loans, working capital and other products, including SMSFs, long-term alt-doc loans and bridging loans – all of which Assetline offers.

“We always aim to equip brokers with up-todate market insights, training and tools that

“This is crucial for assisting clients in sensible lending pursuits that has regard for a borrower’s current circumstances and likely growth expectations,” he says.

Millbrook also advances loans for a shorterterm duration, with a focus on the intended source of repayment and the likelihood of such events occurring.

“For our construction lending, we always include a construction contingency that provides a reserve to accommodate any cost

escalation or variations that may be encountered throughout the course of the project development.”

The economic environment is presenting challenges for SMEs and brokers alike, says Pepper Money general manager mortgage and commercial lending Barry Saoud.

He says small businesses are the lifeblood of Australia, and despite the recent decline in

“Our specialised BDMs o er support and training to brokers, empowering them to provide tailored solutions to meet the unique needs of SMEs,” says Smith.

“Our BDMs and underwriters leave no stone unturned when working with brokers, ensuring all options are exhausted in the search for a solution that works best for the customer.”

Prospa general manager sales and partner-

“For our construction lending, we always include a construction contingency … to accommodate any cost escalation or variations that may be encountered [during] the project development”

George Lyall, Millbrook Group

overall business credit applications, Pepper Money is focused on supporting brokers to help SMEs thrive.

“In the last six months to date, we have experienced a 55.8% surge in SME settlements,” Saoud says.

“We work closely with brokers to adapt our strategies by o ering ﬂexible lending solutions, such as our commercial real estate loans with high LVRs and extended loan terms. This enables brokers to o er tailored solutions to businesses, whether they are looking to manage ATO tax debt, reﬁnance or seek growth opportunities.”

By leveraging Pepper Money’s fast servicelevel agreements and eliminating commission clawback on early payouts for commercial loans, Saoud says “we enable brokers to provide more competitive options to support their clients’ business growth”.

David Smith, Liberty’s chief distribution o cer, says Liberty has always taken a ﬂexible, free-thinking approach, which means “we are well positioned to support brokers even in challenging conditions”.

ships Roberto Sanz says SMEs are bearing the brunt of economic pressures, with supply chain costs, rate hikes and lower consumer demand driving down conﬁdence.

Many small business owners have become cautious about taking on more debt. “This has

created a huge opportunity for brokers to step in to educate their clients on the di erent funding solutions that could help to relieve some of their cash ﬂow pressures,” says Sanz.

Sole traders and micro small businesses are being hit the hardest. “However, we’re seeing increased demand from what we refer to as ‘established small businesses’.”

These are businesses that have been trading for more than three years, have a credit score above 650 and have learnt to weather challenging market conditions. Sanz says this is a prime segment brokers should be targeting right now.

Prospa understands that every business is unique, and works closely with brokers to understand their clients’ needs and ﬁnd personalised solutions.

“We invest heavily in educational tools and resources, third-party research, as well as continually review our own credit and risk appetite to help ensure we deliver the best solutions,” says Sanz.

Matthew Porch, head of distribution at Aquamore, says commercial lending is increasingly shifting towards non-bank and private lenders due to their ﬂexibility – and in Aquamore’s case, the judgemental credit assessment of commercial solutions.

FEWER MORTGAGE BROKERS ALSO WRITING COMMERCIAL LOANS

“Disruption breeds innovation. Private lending is well placed to support businesses seeking growth with fast, ﬂexible, short- to medium-term funding”

Matthew Porch, Aquamore

Porch says Aquamore’s holistic approach is beneﬁcial for businesses seeking larger-ticket funding to seize a time-sensitive opportunity, reﬁnance or facilitate growth.

“Economic conditions appear to be becoming more favourable with inﬂation easing, but with reduced spending, many businesses continue to feel the pinch,” Porch says. “That said, it’s important to remember that disruption breeds innovation. Private lending is well placed to support businesses

seeking growth with fast, ﬂexible, shortterm funding.”

Aquamore encourages brokers to see themselves as finance brokers, rather than standalone mortgage brokers or commercial brokers, to ringfence clients and boost revenue. Porch says this may involve writing (or ‘tick and flicking’) more commercial deals or collaborating with commercial finance specialists.

He points out that while brokers must

consider the client’s best interests, this doesn’t necessarily mean being lured in by what appears to be the cheapest interest rate.

“Commercial lending is di erent from residential lending, and a solution trumps a headline rate. It’s also wise to be conﬁdent in a lender, based on their track record, market reputation and funding lines – particularly in the private lending sector.”

Aquamore strongly recommends that brokers seek to upskill themselves to be better placed to analyse clients’ P&Ls, balance sheets and cash ﬂow patterns, which will in turn uncover ‘hidden’ commercial ﬁnance opportunities.

“It’s prudent to collaborate with an accountant to create a personal or business plan to realise goals,” says Porch. “Relationships are key: brokers, lenders, aggregators and industry associations can play a key role in your broker business.”

CAFBA CEO David Bushby says the primary advantage brokers bring to SME clients is their knowledge of di erent ﬁnance options and their ability to present options to clients that are tailored to and match their speciﬁc needs.

“Brokers should always be taking this strategic approach when delivering outcomes for commercial clients, in good times and bad,” says Bushby.

In tighter times, it’s even more important for brokers to spend time with clients explaining options, the impacts on cash ﬂow and ability to service debt.

“Brokers should speciﬁcally consider tax debt, if any, and making provision to transfer that debt from the ATO to an established lender on better terms,” Bushby says.

Support for broker diversiﬁcation

With mortgage brokers writing 73.7% of all new home loans in the July 2024 quarter, according to the MFAA, it’s no wonder brokers are looking at diversifying into commercial and asset ﬁnance.

Bushby says CAFBA welcomes residential brokers who wish to increase their o ering to

SECTOR FOCUS: SME LENDING

include commercial clients, but it’s important to understand that different and additional skills and experience are required to successfully do so.

CAFBA has developed a bridging diploma that teaches specific skills at all stages of a broker’s career, and specifically for resi brokers looking to diversify.

The latest MFAA Industry Intelligence Service report (1 April to 30 September 2023) shows that the number of mortgage brokers also writing commercial loans fell 7.58%, but the value of commercial loans settled by mortgage brokers was the highest on record.

Sanz says the number of mortgage brokers settling business with Prospa has remained consistent, with the average deal size actually increasing. “We believe this is the result of

of mind, a line of credit is a great solution.”

Assetline Capital recognises the huge potential of the SME sector and the value brokers bring when they expand their services, says D’Vaz. It provides brokers with tailored training through webinars and in-person events that deepen their understanding of SME lending, helping them identify opportunities and confidently advise their clients.

“Our product range includes a comprehensive suite of commercial lending products designed to meet the varied needs of SMEs,” D’Vaz says. “This, combined with our training and support, allows brokers to offer their clients tailored solutions, whether they require working capital, SMSF investment funding, construction project finance, or simply a solution to settle a property quickly.”

“We’re increasingly seeing technology play a critical role in helping advisers set expectations up front and streamline the loan process to maximise speed and transparency”

Roberto Sanz, Prospa

the education and support we continue to provide mortgage brokers to diversify their business,” he says.

From extensive product guides and resources to dedicated local BDMs with unparalleled market insights, Prospa has been able to equip brokers with a differentiated service model that ensures they have everything they need to quickly identify opportunities and close business faster.

Sanz says flexible product and service offerings are essential to helping brokers source the best solutions. “For business owners eyeing growth or expansion opportunities, a business loan could be a great fit, but for those looking to overcome current cash flow challenges or who just want greater peace

Porch says there’s widespread acceptance of diversification into alternative finance. “It’s encouraging to see so many brokers proactively upskilling to understand the nuances of the different lending profiles.”

Aquamore collaborates with lenders and aggregators in the non-bank sector to educate brokers about SME lending, hosting in-person and online events. It also hosts regular education workshops and seminars to upskill brokers on commercial lending. Porch says these include tips for spotting opportunities, along with strategies brokers can implement to support their client base.

“The national relationship, credit and operations teams have been extended to ensure the company continues to make quick

and consistent credit decisions nationwide.”

Aquamore’s funding offer to the market takes the form of a fully drawn advance and is split into five different product types, says Porch. These are further categorised into assessment type, documentation requirement and loan tenure – ensuring all market sectors get aligned solutions.

Liberty’s reach and the experience of its commercial and business teams means that they can share real-world success stories from brokers who have diversified into commercial lending with Liberty’s support, says Smith.

“We have seen how helping SME customers has substantially contributed to broker business growth and strengthened client relationships beyond home loans.”

Smith says Liberty’s focus on education, product diversity and expert advice helps brokers grow their businesses and ensure they have the right tools and knowledge to meet SME borrowers’ evolving needs.

“We work closely with our broker partners to help them provide the kind of support business customers require in the current economic climate.”

Saoud says given the recent trends highlighted in the MFAA report, it’s crucial to encourage more mortgage brokers to diversify into SME lending. Pepper Money leads the way in broker education and making things easier, regularly running workshops for commercial lending, both as one-on-one sessions and in groups.

“A broker can reach out to their Pepper Money BDM if they would like to jump in on one of our sessions. This extends beyond residential lending, allowing brokers to present a broader range of solutions, such as business lines of credit and asset finance.”

Brokers also get direct access to the expert advice and support offered by Pepper Money’s credit teams.

Millbrook is a regular attendee at aggregators’ professional trade days as well as industry conferences, says Lyall.

“We quite often interact with new commercial brokers and provide guidance on the key

aspects of a loan application for new-tocommercial brokers.”

Millbrook also provides a monthly news alert to brokers, including a regular report on typical transactions – another opportunity for further learning about market trends.

“Our in-house credit team are always available; brokers have a direct line of contact with our credit analyst to talk through any queries,” Lyall says. “This is not only educational but makes the process a lot smoother for the broker.”

Learning from broker feedback

Non-banks understand the importance of broker feedback on their products, policies, platforms and services, given brokers are so crucial to their business model.

At Pepper Money, broker feedback is a key driver of how “we evolve our products, policies, and processes”, says Saoud. “Brokers’ feedback helps us identify gaps in our product offerings and develop new solutions that address specific market demands.

“We actively engage with brokers to understand their clients’ challenges, particularly in areas such as cash flow management and debt consolidation.”

Saoud says broker input helps Pepper Money shape its lending policies, refine its refinancing solutions for ATO tax debts and

BUSINESS INDEX SHOWS DECLINE

“We work closely with brokers to adapt our strategies by offering flexible lending solutions, such as our commercial real estate loans with high LVRs and extended loan terms”

Barry Saoud, Pepper Money

offer a flexible product range that caters to both prime and near prime customers.

Smith says brokers are at the coalface, talking to customers every day, so the insights

they provide on customer needs and expectations is invaluable.

Liberty regards broker feedback as essential to its success; it helps the non-bank

understand “how we can best serve brokers and clients in any economic environment”.

“We have always championed the third party broker channel and value our relationships with brokers and business partners,” Smith says.

Porch says Aquamore enhances it products and develops new products to meet current and emerging demand. These include no-doc, alt-doc, lease-doc, rapid refinance and SMSF offerings.

Aquamore has also increased its loan size to $7.5 million after market research indicated this sector of the market was underserviced in terms of debt size. This has been well received by businesses seeking funding

SECTOR FOCUS: SME LENDING

to consolidate debt or make substantial investments.

Millbrook values the feedback from its broker network, says Lyall, and the key beneﬁt relates more to industry and macroeconomic pressures that are noteworthy.

“We also avail of information on the broader market that can impact our policy framework from other sources as well. These include but are not necessarily limited to external professional consultants such as valuers and quantity surveyors and industry commentators.”

Lyall says Millbrook’s processes are well developed and robust, providing a responsive and professional solution for borrowers and brokers.

D’Vaz says brokers are out there directly

that ﬁlled a gap in the market,” says D’Vaz.

Sanz says Prospa has always been a partner-led business and regularly seeks feedback on “how we can help our partners create more value for their client”.

“This includes collecting feedback faceto-face at events, through questionnaires and over the phone to help shape new products, tools and the decisions we make at Prospa.”

Sanz says brokers recently reported that their clients were looking for a broader range of product solutions that included longer terms, higher limits and greater payment ﬂexibility.

“We’re pleased that we’ve been able to deliver that so brokers and their clients can make more business happen.” This includes

“Our BDMs and underwriters leave no stone unturned when working with brokers, ensuring all options are exhausted in the search for a solution that works best for the customer”

David Smith, Liberty

interacting with SMEs and understanding their evolving needs. “Their feedback helps us identify gaps in our product o erings and adapt or innovate new solutions that better align with what businesses need right now.

“For example, if brokers report that SMEs are struggling with cash flow but hesitant to take on traditional loans, we can respond by developing more flexible options like revolving credit facilities or short-term financing solutions.”

Earlier this year, in response to broker feedback, Assetline Capital expanded its construction o erings with an alt-doc construction loan solution for $1 million to $5 million. “We worked very closely with brokers, ensuring that we were delivering a product

o ering higher limits, with a business line of credit up to $500k and ﬁve-year terms for business loans above $150k, as well as added repayment ﬂexibility such as unlimited extra repayments to help businesses save on interest and pay down their loans faster.

Critical role of technology

Smith says technology is an integral part of the way Liberty supports brokers and customers throughout the lending process.

“Whether it’s digital identity veriﬁcation or the use of AI, we’re continuously innovating our online platforms and services so brokers can focus on ﬁnding customer solutions.

“We expect there will be even more tools available in the near future to help us

continue to meet the changing needs of customers and deliver positive outcomes.”

Porch says private lending continues to be in demand, o setting the restricted credit appetite of both traditional lenders and increasingly non-bank lenders.

“Aquamore considers every deal holistically on a case-by-case basis, applying a judgemental credit approach versus being policy-based with strict credit criteria. We expect this to remain a high priority for ‘top end of town’ businesses that require individual solutions for often multifaceted deals.”

Lyall says technology is an essential plank for any lending business and needs to be continually monitored and upgraded where it makes sense to do so.

“A large portion of our business is, however, tailored to individual circumstance and is not necessarily standardised.

“Millbrook ﬁrmly believes that there will always be the need for a human touch in the SME commercial space. It comes back to service – brokers and clients want to talk to the credit assessor or the BDM regarding the transaction.”

Sanz says technology has played a transformative role in the industry over the past decade, for example with the move from paper to digital statements.

“We’re increasingly seeing it play a critical role in helping advisers set expectations up front and streamline the loan process to maximise speed and transparency.”

An example is Prospa’s credit assessment process; its proprietary Credit Decision Engine. This leverages real-time data and industry insights, including risk factors, pricing models and credit policies, to ensure accurate assessments of SME creditworthiness to help ﬁnd the best solutions. “It has increased the speed at which brokers can quickly identify, realise and convert an opportunity in hours, helping them to better serve their clients,” says Sanz.

Prospa will be at the forefront of a new leap in tech innovation, he says. “We have been developing new technology … we believe this

FRIDAY

SECTOR FOCUS: SME LENDING

will change the way brokers experience business lending.”

D’Vaz says that with the increasing volumes of SME loans, Assetline Capital has introduced technology tools to make loan applications easier, reducing its approval times and improving its processing and decisioning capacity.

“We selectively chose and created tools that take a broker from receiving a quote with our Quick Quote tool, submitting a scenario via our Submit a Scenario form, lodging an application on LoanApp, right through to loan processing and approval.”

Technology, particularly AI, is rapidly transforming SME lending, with non-banks such as Pepper Money at the forefront, says Saoud.

“From data-driven technology that slashes the time to yes, to creating innovative new products that make the most of emerging market opportunities, we have the agility and willingness to explore new ways of helping our customers and brokers to succeed.”

Pepper Money serviceability calculators streamline the lending process for brokers, enabling faster approvals and a smoother experience for their clients.

“These tools are designed to help brokers navigate complex scenarios more efficiently, offering tailored solutions that are critical in today’s fast-paced lending environment.”

Market trends

Bushby says the decline in business loan applications cited in the Equifax report is not reflected across the board.

“In the asset finance space, there has been a notable decline in financing for lifestyle industries such as hospitality and recreation, but there is still a healthy credit appetite in capital-intensive industries like transport, manufacturing, materials handling and civil construction.”

Porch says the ‘market divide’ will become more apparent, with the major banks continuing to focus on ‘vanilla’ residential borrowers, while non-banks and private

lenders support an increasing volume of prime or near prime borrowers.

Aquamore expects that the lion’s share of SME and commercial debt will be fulfilled by non-bank and private lenders as the major banks continue to focus on reducing their cost-of-capital charges in an uncertain market.

“Turnaround times, flexible loan terms and conditions attract commercial borrowers to

Saoud. The offer features unlimited debt consolidation, including personal, private and business debts considered on Prime, and six options to choose from when verifying SME income.

As traditional banks become more cautious, alternative lenders like Assetline Capital are playing a larger role in the SME space, says D’Vaz. Non-banks are becoming more prominent, offering competitive rates

“There is still a healthy credit appetite in capital-intensive industries like transport, manufacturing, materials handling and civil construction”

David Bushby, CAFBA

non-bank and private lenders,” says Porch. Lyall says brokers should be aware of the completion risk for project developments and possible builder failure.

“Brokers should also look to foster deeper relationships with non-bank lenders such as Millbrook who are able to provide a more flexible and speedier solution than the mainstream banks.”

Flexibility in funding structures and speed to market have becoming increasingly apparent, and this is where Millbrook excels, says Lyall.

Saoud says there’s increasing demand for non-bank funding, particularly as traditional banks tighten their credit lending. “This has driven growth in alternative lending products, such as our business line of credit, which offers the flexibility SMEs need to manage cash flow and meet ongoing obligations. “

Another emerging trend is refinancing tax debts, especially as ATO pressure increases for SMEs. Pepper Money is meeting demand to support SMEs with discounted Near Prime Clear rates for ATO debt consolidation, says

and more flexibility, so brokers should explore partnerships with them to broaden their product offerings.

“Short-term loans are gaining traction as businesses look to maintain cash flow and navigate unpredictable revenue streams,” D’Vaz says. “Brokers should focus on these adaptable options.”

Smith says business borrowers need guidance and support now more than ever, so they are increasingly turning to brokers. “Providing SME lending support is a great way for mortgage brokers to grow their businesses, as these are among some of the customers currently in need of the greatest support.”

Liberty is also seeing an increase in the need to support SMEs with custom low-doc or alt-doc solutions.

Smith says the lender prides itself on offering highly skilled and accessible support to brokers, who can liaise directly with a local team of credit assessors. “Our bespoke approach gives us the flexibility to assess every customer on their unique circumstances.”

Turning property dreams into reality

Key stakeholders in the first home buyer market are working closely with brokers to help aspiring borrowers overcome stumbling blocks to homeownership

WHILE MANY feel that achieving the ultimate Aussie dream of homeownership is slipping further away from their grasp, the majority still believe it’s a good time to buy and that the investment is worth it.

There’s no doubt it’s harder for first home buyers after 13 successive interest rate rises, slow wages growth, a cost of living crisis and rising property prices.

The time it takes to save for a 20% deposit on an entry-level house ranges from just three years and seven months in Darwin to six years and eight months in Sydney, according to Domain. But Helia’s latest 2024 Home Buyer Sentiment Report shows the majority of first home buyers remain hopeful – 77% agreed it was a good time to buy.

To understand what’s happening in Australia’s first home buyer lending market and how mortgage brokers can get involved, MPA spoke to Greg McAweeney, chief commercial officer at lenders mortgage insurance provider Helia; Blake Buchanan, general manager of aggregator Specialist Finance Group (SFG); and Ian Rakhit, general manager home buying distribution at Bankwest. Property Council of Australia group executive, policy and advocacy, Matthew Kandelaars also provided his insights.

First home buyer trends

Kandelaars says it’s encouraging to have seen new loan commitments to first home buyers rise marginally in recent months, with one

in three first home buyers supported by the federal government’s Home Guarantee Scheme in 2023–24.

“It is sadly evident that purchasing a first home is increasingly challenging,” he says. “In Sydney, the average age of a first-time buyer has risen to 37, while in Melbourne it’s now 36.”

As it becomes harder for first home buyers to enter the market, it’s crucial to support

Kandelaars says the price thresholds for first home buyer stamp duty exemptions need to be pegged to the changing median house price to give buyers greater choice.

“Underpinning this is a concerted effort to increase housing supply across the nation,” Kandelaars says.

“If there were a stronger, more sustainable pipeline of new housing, more Australians would be able to afford their ideal home.”

“Whilst affordability, particularly for first home buyers, is tight generally, there is more affordability in units when compared to houses, which is spurring activity in this segment”

Blake Buchanan, SFG

and empower them to achieve the homeownership dream.

“We need to ensure that mortgages are more accessible to young first-time homebuyers, giving them a better opportunity to secure housing,” Kandelaars says.

The Property Council believes government taxes are a large barrier for first home buyers, with data indicating that 30–40% of the cost of buying a new home in some jurisdictions is made up of taxes, fees and charges.

Commenting on trends in the first home buyer market, Buchanan says there’s recently been an increase in pre-approvals across the board as property growth slows.

“Whilst affordability, particularly for first home buyers, is tight generally, there is more affordability in units when compared to houses, which is spurring activity in this segment,” he says.

Buchanan notes that there has been an uptick in first home buyers using the ‘bank

of mum and dad’ to achieve their homeownership goals, and he says this is likely to continue.

“There has also been a growing number of ﬁrst home buyers who have reset their goals and accept that their ﬁrst home is not necessarily their forever home or could be an investment to get onto the property ladder,” he says.

McAweeney says that in the past 12 months ﬁrst home buyers have faced rising property prices and increased living costs, impacting their ability to save a 20% deposit. “Despite this, Helia’s latest Home Buyer Sentiment

giving up on their homeownership dream,” says McAweeney.

He says mortgage brokers play a powerful role in demystifying the home loan process and bridging the knowledge gap by providing a clear explanation of LMI and how it can help homebuyers purchase their homes sooner.

“Helia develops resources designed to empower mortgage brokers to have more conﬁdent conversations with FHBs,” he adds.

Rakhit agrees that, despite cost of living pressures, the dream of homeownership for younger Australians is still very much alive.

“Mortgage brokers play a powerful role in demystifying the home loan process and providing a clear explanation of [LMI] and how it can help homebuyers purchase their home sooner”

Greg McAweeney, Helia

Report 2024 reveals that FHBs remain optimistic, with 77% agreeing that now is a good time to buy.”

Several other key ﬁrst home buyer trends were identiﬁed in the report. These include:

• di culty saving: rising living costs have surpassed housing una ordability as a key barrier to saving a 20% deposit

• alternative strategies: FHBs are exploring alternative pathways to purchasing a home sooner, including the use of LMI, with 77% of prospective FHBs likely to use LMI in 2024 (up from 59% in 2023)

• seeking guidance: FHBs are looking for support from mortgage brokers, with 91% of FHBs likely to use a mortgage broker to obtain a home loan

“It’s encouraging to see that, despite the current market, ﬁrst home buyers aren’t

Bankwest’s Home Truths research found that homeownership is still important to younger Australians (64% of Gen Z); and those planning to buy in the next ﬁve years are willing to sacriﬁce property features, such as a pool or a deck (38%) and property size (35%), to get on the property ladder.

“We consistently see homeownership as important to Australians, regardless of the property market or economic conditions at any given time, and what changes is how aspiring homebuyers adapt to those situations,” Rakhit says.

Working with mortgage brokers

Helia conducts regular market research to understand the challenges faced by mortgage brokers, and develops educational resources, tools and estimators to support them, says McAweeney.

“Our resource library includes videos, fact-

sheets, infographics and case studies to help homebuyers understand how LMI can support their homeownership goals. Our LMI fact sheet and infographics are also available in a range of languages, including Arabic, Punjabi and Simpliﬁed Chinese.”

McAweeney says Helia also partners with industry associations such as the MFAA and FBAA to provide education and increase awareness of LMI. It recently partnered with the MFAA to publish the 2024 Mortgage Broker Research Report, to gain insights into the pain points and opportunities of LMI for mortgage brokers and create more resources to address them.

“We have also commenced discussions with aggregators with a view to provide training and resources to better support mortgage brokers,” says McAweeney.

Rakhit notes that brokers play a vital role in helping ﬁrst home buyers navigate the complexities of homeownership, and in ﬁnding the best solutions for their customers’ circumstances.

“Bankwest strives to be the best bank for brokers in the country, and we pride ourselves on the collaborative relationship we have with brokers to ensure we continue to deliver the tools and processes o ering the best possible experience for them and their customers.

“On average, we help over 300 ﬁrst home buyers into a new home every month.”

Rakhit says the bank is committed to supporting brokers and ensuring it meets their needs and expectations. This support ranges “from our passionate, award-winning BDMs and broker chat to our world-class broker portal and self-serve education resources”.

“We’re also committed to engaging brokers and making sure they feel empowered through face-to-face events and our regular direct communications.”

At SFG, Buchanan says most brokers o er their services to a range of client types, including ﬁrst home buyers. “So it’s important that the market stays on top of the state or federal o ers for FHBs, along with lender

SECTOR FOCUS: FIRST HOME BUYERS

o ers and policies for this segment.”

This education is made available to SFG members through multiple avenues, including face-to-face learning, SFGlearn and digital content, as well as more personalised learning sessions.

“I think that there is broadly great content availability at call should a broker need it, which is something that’s very pleasing to see over time,” Buchanan says.

SFG is fortunate to have many younger professional brokers who have grown up in an era of ﬁrst home buyer schemes and policies. “This has given them real and personal experience with this segment, and there is nothing quite like experience.”

Value of technology

Tech platforms have a key role to play in helping brokers and their often younger, tech-savvy FHB clients gain quick and streamlined access to the ﬁnancial products and services they need.

Rakhit says Bankwest is focused on simplicity and speed and has continued to invest in innovative digital solutions. This includes working with brokers to build a world-class broker portal that enables brokers to quickly access information and tools that help them ﬁnd the best solutions for their customers, fast and e ciently.

The bank is also investing in DocBox, its secure document transfer solution. This

MOTIVATIONS FOR BUYING FIRST PROPERTY

allows brokers to transfer documents securely to Bankwest through its broker portal.

“On average, documents take 26 seconds to be indexed automatically onto the application, compared to 24 hours when emailed through,” says Rakhit.

Digital signing also helps to speed up the process and ensures that, following unconditional approval, documents are already on the way to the broker and customer, with a built-in four-hour delay to give brokers time to congratulate their customers.

The Bankwest Simple Home Loan was introduced to meet the needs of customers such as ﬁrst home buyers who are looking for a basic product with fewer fees and less

fuss. It has no application fees, no extra costs to redraw, the ability to make extra repayments at any time, and an optional 100% offset facility.

Buchanan says SFGconnect is a SalesTrekker-based platform with a number of cool features that are directly relatable to the newer generations and their expectations for digital experiences and speed of responses.

“Whilst the age of FHBs has been increasing, the majority are still millennials and Gen Zers who are more inclined to seek responses online, compare themselves and research their provider through online reviews,” he says.

This is where SFGconnect comes in to automate and digitise the experience, giving them comfort and validation around their choice of broker, says Buchanan.

Looking to the future

Over the next 12 to 18 months, McAweeney expects FHBs to continue to be savvy in looking for ways to make their homeownership dream a reality. “Mortgage brokers will continue to act as a trusted guide for FHBs navigating the complex homebuying process. Helia is well positioned to support both FHBs and mortgage brokers.”

Helia provides flexible LMI solutions such as monthly LMI and family assistance.

McAweeney says with rising living costs, some homebuyers can’t pay for the LMI

premium up front. To help, Helia’s Monthly LMI offering allows homebuyers to pay the LMI fee monthly until their loan has been paid down to below the LVR determined by their lender, or until the loan is discharged.

“Monthly LMI helps FHBs enter the market sooner without needing to save the upfront cost of the LMI premium,” says McAweeney.

cohort of people who think homeownership is beyond them when it might not be.

“We encourage brokers to educate and make prospective clients aware of what can be achieved. There is still a large market for brokers to explore, and marketing your service and the great work that brokers do will help break new ground.”

At Bankwest, Rakhit says the focus is on

“At Bankwest, the focus is on certainty and speed of approval and settlement. This will support our brokers in helping first home buyers realise their dream of homeownership”

Ian Rakhit, Bankwest

Helia’s family assistance offers a 15% reduction on LMI when parents or family pay the LMI premium up front at loan settlement.

Looking ahead, Buchanan says he sees more favourable conditions when it comes to interest rates, but he expects home prices to remain high as demand still exceeds supply in many regions. “Our role is to give the tips and tools available to our members for use and to put into practice. There is still a large

certainty and speed of approval and settlement. This will support “our brokers [to] help first home buyers realise their dream of homeownership”.

“We’ve been really clear in our strategy, prioritising investment in the digital and broker channels our customers are increasingly preferring, and we will continue to innovate and work with brokers to deliver solutions as their needs – and those of their customers – evolve.”

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A great leap forward for broking?

Artificial intelligence could revolutionise mortgage broking, but its rollout in Australia has been mixed – even though harnessing the latest technology will clearly save time and money

WHEN A new technology emerges that has the potential for paradigm change, there is a tendency for the initial applications to be bound by concepts and thought processes that dominated the old framework. This is sometimes referred to as the ‘radio with pictures’ problem.

Television shows in the late 1940s treated the new medium much like radio: shows were essentially filmed versions of radio programs with monologues, hosts introducing acts and no visual experimentation. It wasn’t until the 1950s that camera angles, editing, location shooting and special effects showed that TV could more deeply engage audiences through sight, sound and movement.

Today’s paradigm-changing technology that the lending world is yet to leverage to its true potential is, of course, artificial intelligence. Recent technology gives mortgage brokers the power to supercharge their service by harnessing cutting-edge technology.

Less paperwork, faster loan approvals and deeper customer engagement are the rewards for brokers who get the formula right. Be it a chatbot delivering instant policy answers, or AI summarising client calls in minutes, examples exist of win-win results for both brokers and their clients through the new technology. Yet despite the potential, the implementation of such tools remains inconsistent in Australia.

“At this stage the Australian industry has not advanced as much as some like to think,”

says FBAA managing director Peter White. White points out that there are barriers to implementing efficiency-driving technologies in the industry. “It doesn’t greatly enhance the processes right now, which is why the FBAA has been talking to Treasury, who want to make the process digital. The technology exists to drive efficiencies; as an example, we need to transition from wet-ink signatures to digital signatures.”

achieve lodgement speeds more than four times faster than the industry average.”

This improvement in efficiency has farreaching benefits for both brokers and clients. Other industries are already seeing significant bottom-line improvements, with a recent global study by Deloitte showing improved efficiency and productivity in 34% of enterprises that introduced AI initiatives.

Lendi Group has been able to create a time

“[AI] technology makes our brokers and associates more efficient and unlocks greater capability to provide accurate and express responses to customers”

Travis Tyler, Lendi Group

A good role model

These new tools can speed up the lending process and help reshape the nature of brokerclient relationships, saving time and money.

One firm converting new tech into tangible benefits is Lendi Group.

“Aussie and Lendi brokers around the country are leveraging our technology to great effect,” says Travis Tyler, Lendi Group’s chief product officer. “Industry data indicates that the average loan takes more than 20 hours of broker input. Our technology platform unlocks efficiencies that are seeing our brokers

dividend for brokers by simplifying its processes. Automated document verification, instant credit checks and AI-driven risk assessments are dramatically reducing turnaround times.

“[Our platform] benefits brokers by adding capacity and time they can spend directly interacting with customers and focusing on revenue-generating activity, while customers benefit by getting into their new home sooner,” says Tyler.

A recent innovation exemplifies this trend: “One of our more recent tech developments

is the Aussie mobile app, which launched earlier this year. This app has put our brokers in the palms of their customers and facilitated ease of engagement like never before. Our brokers have embraced the app with enthusiasm, and sentiment from the network has been very positive.”

The response to these innovations has been positive, extending beyond brokers to end users. “Reviews on the Apple and Android platforms have also been very positive, which indicates customers are receptive to the new value we’re delivering,” says Tyler.

In short, businesses that get it right are using technology to convert more time into money for themselves and for customers.

What’s holding progress back?

The reasons for the slow adoption by other players in the industry are complex and multifaceted. White suggests that some financial institutions may be resistant to change due to potential impacts on their business models.

“The banks have been reluctant in many ways to embrace this because they have entire retention teams who want to steal business from brokers, and new technology will make this more difficult. So at this stage the first step has not been taken.”

But he also warns of the potential pitfalls of rushed adoption, particularly when it comes to AI. “Brokers are starting to use it, but it’s a little dangerous if they don’t know how to use it for optimal outcomes or if they rely too much on it at this stage. It’s in the infancy growth phase,” he says.

Personal branding, the human touch

Even so, there are companies with a focus on tech that are increasing their competitiveness by leveraging new tools to boost their personal branding, for example.

“For smaller brokers, it’s more about your personal branding than the company branding. Brokers who can leverage different social channels to promote themselves and share their story can do well competing with the bigger players, which is a game changer,” says

Bill Tsouvalas, founder and managing director of tech-focused asset finance broker Savvy.

Understanding platform-specific strategies is also essential, he says. “One mistake we see repeating itself is people using the exact same content and approach for each platform ... It’s better to make platform-specific content and really focus on one or two channels exclusively.”

Keeping the human element in broking is also crucial. “We pride ourselves on our human-led, tech-superpowered approach to mortgage broking, where our technology enhances, rather than replaces, human connection,” says Tyler. “Our technology gives our customers greater choice around how they engage with their broker; [it] facilitates speed and efficiency for our brokers and ultimately leads to faster and more desirable outcomes for brokers and customers alike.”

Tsouvalas agrees that AI will not replace the human element. “At the end of the day,” he says, “mortgage broking is all about the customer relationship ... I don’t see AI replacing this any time soon, if at all.”

The integration of technology into a brokerage is also about inclusivity. Tyler explains how Lendi’s approach helps serve a diverse customer base: “Lendi Group is home to two brands, over 1,300 brokers and 220 retail stores. Our proprietary technology platform is the nerve centre of our broker solution, allowing us to deliver our services in a truly omnichannel way.”

The AI revolution present and future

The stakes are high for getting the implementation of technology right, and challenges are rife. Data security concerns loom large, as evidenced by the rising incidence of financial crimes involving digital payments. According to a recent LexisNexis Risk Solutions study, 46% of organisations reported an 11–20% increase in such crimes over the past year, while a further 19% reported more than a 20% increase.

Mitigating these risks requires a multifaceted approach. Robust cybersecurity measures, regular staff training, and adherence to

TOP BENEFITS ACHIEVED THROUGH GENERATIVE AI INITIATIVES

SECTOR FOCUS: BROKING TECHNOLOGY

LEADING DATA THREAT ACTORS

stringent data protection protocols are crucial. The 2024 Thales Data Threat Report indicates that external attackers and human error remain the top data threat actors, underscoring the need for both technological and human-centric solutions.

This is all the more important given that the AI innovations implemented so far at brokerages are just tentative first forays.

“Regarding tech in smaller broking firms, AI is having and will continue to have a bigger impact on the way smaller mortgage brokers operate,” says Tsouvalas. “Many people are testing the waters to see what it’s good for and what areas it is lacking.”

Despite the current state of technology adoption, White remains optimistic about the future of tech in mortgage broking.

“As technology advances, competition will increase, but we are not there yet,” he says. “In the USA a loan can be approved in minutes, so why can’t this happen here? Why can’t data be entered by voice? Finance and mortgage brokers need to be on the front foot, and the FBAA is leading this push. I believe there are exciting times ahead.”

Tyler shares this optimism for more radical change ahead. He says, “AI is clearly the hottest topic when it comes to tech and dayto-day operations. At Lendi Group we’re

focused on a human-led AI copilot framework that helps brokers be better at what they do.”

Lendi recently launched an AI-powered broker assistant bot integrated into Slack and Microsoft Teams that fast-tracks brokers’ policy-related queries.

“This technology makes our brokers and associates more efficient and unlocks greater

Cultivating a tech-savvy

workforce

To harness the full potential of these tech advancements, brokerages must invest in their human capital.

“What AI will be better at is streamlining back-end tasks, meaning brokers will be able to operate more efficiently, which will have a positive impact on the bottom line,” says Tsouvalas.

Forward-thinking organisations are implementing comprehensive training programs to keep their brokers abreast of the latest technological tools and trends – but also to foster a culture of innovation and continuous learning.

White believes ongoing education is vital.

“The FBAA runs regular professional development days, and we cover topics like AI and technology presented by specialist speakers,” he says. “We also produce video content to ensure our members stay updated.”

Because tech continually advances, the tools can never be fully mastered – capabilities are always a few steps ahead of implementation. This means adopting new technologies is as much a cultural challenge as a technical one.

White stresses the importance of adaptability. “We must be prepared to be adaptive

“As technology advances, competition will increase, but we are not there yet. In the USA a loan can be approved in minutes, so why can’t this happen here? Why can’t data be entered by voice?”

Peter White, FBAA

capability to provide accurate and express responses to customers,” says Tyler.

Another recent rollout involves an AI tool called Voxi that generates concise call summaries to help identify actionable next steps directly within the CRM system. “The result is a dramatic reduction in the time required to complete post-call tasks, from 60 minutes to just one to two minutes per call.”

and not be resistant to change. Organisations need to have a culture where they are prepared to continually adapt and look for new ways to operate. The FBAA is always considering how we can do things better.”

The winners in this new chapter will be those who can navigate a changing digital landscape while maintaining the human touch that clients still value.

Source: 2024ThalesDataThreatReport

How to feel energised and be effective

Renowned business psychologist Simi Rayat has devised five questions that professionals can ask themselves each day – a five-minute task that can maximise productivity and success

DO YOU feel like no matter how much you do, there is always more to tackle? You’re not alone.

A staggering 82% of professionals report feeling stressed, overwhelmed and at risk of burnout, according to the 2024 Global Talent Trends report published by Mercer. The constant juggle of trying to do it all –manage work, home and everything else in between – can make it challenging to stay focused, make clear decisions, innovate and maintain a joyful presence at work and in life.

This state of feeling overwhelmed can lead to procrastination, diminished productivity and a decline in wellbeing, satisfaction, engagement and output. For Australian organisations, this can translate to a loss of up to $60 billion annually. More importantly, it robs you, and those around you, of daily joy.

For leaders, feeling consistently overstretched and overwhelmed makes it even harder to stay calm, composed and proactive. Instead, reactivity often takes over, hindering strategic growth and the development of strong relationships and highperforming, engaged cultures.

Get primed to act

But what if you could start your day in a

way that helps you be effective and feel energised for the whole day?

Imagine investing just five minutes of your time at the start of your day that would enable you to prime your mindset to be

Each question is designed to prime your emotions, focus your attention, prioritise your tasks, and set the tone for how you show up each day.

Think of the questions as a compass that

Instead of reaching for your phone and getting lost in social media, you can take control, be intentional and be the architect of your day ahead

intentional, focused and impactful for the rest of the day.

Your brain is the most malleable in the morning, making it the ideal time to prime it. Instead of reaching for your phone and getting lost in social media, you can take control, be intentional and be the architect of your day ahead.

The

five questions to start your day

Helping leaders and other busy professionals shift from a state of survival to thriving inspired the development of the 5Qs Formula, a proven, unique, sciencebacked system of five key questions you ask yourself each morning.

guides you through the vast sea of daily life. By starting your day with these questions, you take stock of your emotional state (question one); acknowledge the winds of gratitude (question two); assess your current position and trajectory (question three); plot your course with specific goals (question four); and finally set sail with intention and purpose (question five).

This ensures you’re steered towards your desired direction for the day ahead.

The five questions are:

Question 1: What is your emotional temperature, and what are you feeling today?

Question 2, parts A and B: What experiences, things or people in your life are you grateful for because they inspire you to be a better version of yourself? Think of a time you have received gratitude and appreciation from someone – how did it make you feel?

Question 3: What is working well for you right now, and what could be working better for you?

Question 4: What three things do you want to achieve today?

Question 5: How will you show up today?

Tips for cultivating a morning routine

Spending ﬁve minutes each morning answering these questions will help you set yourself up for a day of e ectiveness, energy and positive impact.

Consider how you could include these ﬁve questions in your morning routine. For example, could you complete them while having your morning co ee, before you get dressed for the day, or just after you’ve done the school drop-o ?

Keep these questions easily accessible, such as on a sticky note on your laptop screen, on your bathroom mirror, saved on your phone, or in your daily calendar, so you remember to go through them.

Use a journal to write down your responses whenever possible, as this helps your brain

connect with each question and reinforces your commitment. Reviewing your answers at the end of the week can reveal patterns or trends, o ering deeper self-insight and opportunities for change.

If you miss a day or your schedule goes o track, don’t be discouraged; simply pick up where you left o the next day, and continue applying the system. Making a habit of investing ﬁve minutes in yourself at the start of the day will help you achieve more of what matters and with more joy.

Simi Rayat is a business psychologist, keynote speaker, executive coach and the author of ProductivityJoy:FeelEnergisedand BeE ectivein5MinutesaDay . To nd out more, go to www.simirayat.com.

FRIDAY 18 OCTOBER 2024

THE STAR EVENT CENTRE, SYDNEY

EVENT PARTNER

We’re thrilled to announce a record-breaking 800 guests will be attending the Australian Mortgage Awards on 18 October 2024 at The Star Event Centre, Sydney!

It’s going to be an unforgettable night of celebration, recognition, and industry excellence. We can’t wait to gather with the brightest minds in the mortgage industry and make history together!

Stay tuned for the big reveal of the winners as we honour the top performers of the year.

Diversity of services fuels business growth

MPA Top 100 broker Thaer Burbar initially planned to pursue a career in financial planning but was drawn to mortgage broking. He set up Greenline Home Loans and later branched out into real estate, accounting and legal services

THAER BURBAR knows what it takes to achieve success in the highly competitive world of mortgage broking. The founder and director of Sydney’s Greenline Home Loans, a brokerage he set up in 2015, has appeared in the MPA Top 100 Brokers list for the past four years, including achieving a top 10 spot last year, in ninth place.

doing, and that’s where we can show our clients the most benefit. So, within a year we stopped doing financial planning and focused on home loans.”

As well as being a brokerage, Greenline holds an Australian credit licence and has a mortgage management agreement with Origin Mortgage Management Services. It

“I have a good team behind me in home loans who assist with the process – that’s what allows me to work and add value to the other businesses”

Burbar’s approach to broking is holistic. Not only does Greenline offer customers diverse lending services across residential, commercial, asset and SMSF finance but there are three associated businesses –providing real estate, accounting and legal services.

The award-winning broker started his career in financial services in 2011, working as a financial planner.

“Initially, I wanted to go out on my own and set up a financial planning firm, hence the company name is Greenline Financial Services Group,” says Burbar.

“I did a bit of mortgage broking on the side just to be able to help my clients that we were doing some financial planning for.

“I decided that broking is what I enjoy

offers white label loan products for homes, investments, construction, SMSF, the selfemployed, PAYG, display homes, NDIS and

more. “We have one of the most flexible products on the market,” Burbar says.

There are a growing number of external brokers accredited with Greenline who use its white label products.

“We’re getting to know more and more brokers as time goes on – they’re relying on us mainly for their SMSF applications.”

Burbar says the brokerage has embraced asset finance and has also learned to embrace commercial lending, even though it’s very different from residential.

“It’s very important to diversify. All the brokers do a bit of everything, but we do have a broker that’s dedicated to asset finance. I also mentor my brokers on the commercial loans.”

Greenline’s most common commercial deals are commercial real estate loans for business owners buying a warehouse or office,

PROVIDING FULL VALUE TO GREENLINE CUSTOMERS

“I am the main broker at Greenline Home Loans, and I have featured in the MPA Top 100 for the last four years, most recently at No. 9, which is a very proud achievement for me. Greenline Home Loans holds its own ACL and two separate mortgage management agreements. This allows us to offer a wide range of options and solutions for our clients; our products have many niches that allow us to find a solution for our clients when the mainstream lenders don’t want to [provide funding]. The niches include but are not limited to SMSF loans, low-doc loans and commercial loans. To add more value for our clients, Greenline Home Loans is part of the Greenline Group of Companies, which includes Greenline Realty, Greenline Legal and Greenline Accounting. Working with all these professionals under the same roof helps speed up the process and make it easier for our clients.” – Thaer Burbar, director, Greenline Home Loans

“I think the more services you can add, the happier your clients are going to be and the easier it’s going to be for them”

or construction loans and cash ﬂow funding.

Greenline’s other businesses are Greenline Realty, which assists clients in ﬁnding real estate investment properties; Greenline Legal Services and Greenline Accounting.

Burbar is the owner of Greenline Home Loans and has 50% equity with his partners in the other businesses. He says highly skilled professionals lead each business while he focuses on the ﬁnance side. There are about 20 sta in total across the four businesses.

“It’s a big team but a great one, and our clients love it. Everyone communicates in-house and makes it easier for the customers.”

Burbar looks after a big clientele and says his self-employed and small business customers are continuing to perform well in

the current economic environment. There also plenty of referrals coming in.

“I have a good team behind me in home loans who assist with the process – that’s what allows me to work and add value to the other businesses.”

Burbar says having four businesses facilitates the referral of clients between services.

Given that Greenline Home Loans is the oldest, most well-established of the four, he says initially brokerage clients fed into the other businesses, but now it’s moving in all directions.

“Recently we got a couple of real estate leads that came from accounting – there’s a beautiful web happening.”

The company has a strong online presence in Sydney’s Hills District. Burbar says Google

GREENLINE HOME LOANS AT A GLANCE

Owner: Thaer Burbar

Location: Bella Vista, Sydney

Services: Home loans, commercial loans, asset ﬁnance, mortgage management, private lending

Number of team members: Three employees and six brokers

leads and reviews, as well as coverage in publications such as MPA, contribute about 10% of referrals to the brokerage, while the realty business probably drives another 20–30%.

While’s there’s a growing trend of mortgage brokerages o ering diversiﬁed services, such as commercial and SMSF lending, only a few like Greenline provide accounting, real estate and accounting services.

“I think the more services you can add, the happier your clients are going to be and the easier it’s going to be for them,” Burbar says.

However, he emphasises that it’s not easy to have ancillary businesses such as accounting, and there’s a risk involved if you hire the wrong people.

“Your accounting arm needs to be a registered tax agent. It’s highly unlikely you can hire someone to be your registered tax agent … if they leave you, there is no accounting business to fall back on.

“You need to make sure you have the right people invested in the business.”

Greenline Legal is registered with the Law Society of New South Wales, meaning it can practise in all areas of law, not just conveyancing. Burbar says o ering legal services means you need to have a good solicitor who is invested for the long term.

Expanding into real estate, legal and accounting services is about changing your mindset from operating a brokerage to running a business, Burbar says. “If you can run a business, then you can branch out.”

“ I find fishing to be both relaxing and exciting, a perfect escape from the hustle of everyday life ”

HOOKED ON FISHING AND BUSINESS

Mohammed Zahr ﬁnds peace and connection through ﬁshing, blending business relationships with his favourite pastime

MORTGAGE BROKER

Mohammed Zahr, founder of Zahr Financial, discovered his love for ﬁshing a decade ago.

“I started ﬁshing around 10 years ago, initially just out of curiosity, but it quickly turned into a passion,” he recalls.

His ﬁrst catch – a whiting – ignited his enthusiasm for the sport. Now, Zahr enjoys saltwater ﬁshing in Botany Bay, especially during the warmer months.

“Fishing is not just about catching ﬁsh; it’s about the tranquillity of nature and the joy of sharing that experience with others,” he says.

While ﬁshing is often a solitary escape for Zahr, he also uses it to connect with referral partners.

“These outings not only provide a great environment for building relationships but also add a social element to my ﬁshing trips,” he says.

Zahr’s biggest catch so far? A 1.5kg whiting. Over the years, he’s caught around 15 di erent ﬁsh species.

2014

Year Mohammed Zahr fell in love with shing