CBA head reveals plans for the broker channel

The third-party channel has always been very important to CBA and that hasn’t stopped; our emphasis is just as strong, if not growing, from what it has been in the past. To brokers, we have a very compelling offering. Our technology, our innovation, our focus on efficiencies, our security of the balance sheet, and the fact that we are always there, through the good times and the bad times – as brokers know through the GFC – shows CBA’s dedication and commitment to this channel.

You’ve been getting out to CBA PD days and meeting with brokers. Is it true they’re typically not backwards in coming forward with advice?

It’s always delightful to meet brokers. And from what I’ve seen, what a fantastic set of businesses and business people I have had the pleasure to meet. One thing brokers do is give you instant feedback about the quality of your service, products, our BDM network. ‘The path of least resistance’ are the words I keep hearing from the broker channel, and we’re working very hard to ensure we have the processes and services such that it is the path of least resistance when you deal with CBA.

For brokers who don’t know about it, tell us about CBA’s Kaizen program.

We have a team of people who go out and meet brokers and help with their productivity and their efficiencies. It’s good for us, it’s good for the brokers, and it means we can get great throughput of mortgages into the system in any period of time; so it has great flow-on effects for our customers too.

In the May issue, The Adviser published its major banks ranking. A glaring issue to come out of it was that solo brokers, who perhaps don’t write a tonne of business, felt quite unloved by the big four…

We offer the same pricing to every broker, be it a diamond, gold or bronze broking group. Sure, we do segment those brokers, and there’s no doubt that brokers who are greater advocates of ours will get a better service offering from us over time. So we do encourage brokers to be accredited with us and to bring as much volume to us as possible.

And getting CBA accreditation now takes just two days?

If you sit an online exam and you pass that exam, you can be accredited to the CBA to provide loans for us within 48 hours. That process used to be 30 days and we consider that to be a great improvement in efficiency and productivity, and we actively encourage brokers who aren’t already accredited to go through with the process.

The third-party channel has certainly become more professional in recent times; how do you see it evolving further in coming years?

It’s clear to us there is a big section of the public that prefers to deal with brokers. So any broker who provides a very professional and high quality service is always going to do well. And hopefully, by CBA providing a very high quality service to the brokers, we’ll be able to attract those customers into the bank. There are a number of commentators out there who think that broker volumes could soon hit 50 per cent of the market compared to where they are now. That means there is going to be a big demand for professional, high-quality and very efficient brokers to win in this market and, if your business does not meet the ever-increasing bar that’s being set in this industry, then you may not compete.

Looking ahead over the next 12 to 18 months, what headwinds do you foresee for the industry?

In relation to the housing market, we’ve certainly seen some incredible price increases and I don’t think we’ll see the same increases or the same rampant credit growth. I think it [the housing market] will tend to slow down, and the evidence that has started to come out over the past couple of quarters is showing that. I think the economy is in a pretty good position. That said, we’ve just had a fairly tough Budget and we do have a deficit problem in this country, but there’s still great momentum in the economy. I’m expecting interest rates to stay at this level for another four to six months, depending on what happens with unemployment. I think rates will start to slowly ratchet up, but there’s still a lot of scope for the property market – for first home buyers, for investors, refinanced customers; I still think there’s a lot of opportunity to invest.

Lastly, it would be wrong not to ask about CBA commissions to brokers. I hear there’s some good news to report?

Yes, we are investing a considerable sum of money in our commission structure and that will enable us later on this year to provide much more flexible commission structures to brokers, some of whom might want to be paid more upfront or less upfront, or more in a trail – it will enable us to be much more granular in the offerings that we have and I think that will be very attractive to our broker network.