A leading market analyst has questioned how relevant the third-party channel will be in five years if customers flock to digital channels for their home loan needs.
Speaking at the launch of the JP Morgan Australian Mortgage Industry report last week, Digital Finance Analytics (DFA) principal Martin North said that while mortgage customers are currently receiving a greater experience through brokers, the digital channel remains a significant threat.
“There is no doubt in my mind that brokers have the opportunity to increase their share going forward,” Mr North said.
“The feedback from consumers is that the experience they get from brokers in terms of customer service is more positive than the banks. But we have to take into account digital.”
Mr North highlighted that the rise of mobile devices, online banking portals and a general migration towards digital channels by consumers is an important factor for the Australian mortgage market.
“The question is, in five years’ time, will mortgages be sold via a broker or will they be sold via robo-advice systems? That’s an open question,” he said, adding that regulators have recently revealed their thoughts on the matter.
On 21 March, ASIC released a consultation paper and a draft regulatory guide on regulating digital financial product advice, commonly known as robo-advice.
ASIC commissioner John Price said the regulator is keen to see a healthy and vibrant digital advice sector.
“We see digital advice as having the potential to offer Australian consumers access to good quality, low-cost, financial advice,” Mr Price said.
Mr North said his own research suggests consumers have a “huge appetite” to use digital channels for financial services.
“That includes shopping for a mortgage. There is a huge opportunity for players to think about the digital distribution of mortgages and how brokers play into that is a really interesting question.”
[Related: Google mortgage play threatens brokers]