Almost one third of brokers believe in the next five years the biggest impact on the mortgage industry will come from supermarkets.
Genworth's fourth Home Grown report, which surveyed brokers and lenders alike, found that 31 per cent of brokers believe supermarkets are a looming threat.
Out of Australia’s two big players, Coles/Wesfarmers is certainly more dominant in the financial services industry since the group already offers insurance through multiple platforms.
Several senior executives from Coles come from UK supermarket chain Tesco, which has operated in the financial services space since 1997 through Tesco Bank.
Tesco not only offers insurance but savings accounts, personal loans and even fixed and variable rate mortgages.
“I’m afraid we cannot confirm or deny the speculation that we will be offering home loans," a spokesperson for Coles said.
“I can say that we have a small number of financial services products already and the customer response to these is encouraging. We have more than 200,000 Coles insurance policies and a strong customer base on our Coles MasterCard.
“We will continue to look at ways to offer more value and convenience to customers in financial services.”
While Woolworths were not able to respond by press time, it would seem that mortgage lending is the next logical step for big supermarket chains, according to top broker and CEO of My Mortgage Freedom Anthony Alabakov.
“It’d be Wesfarmers who would be looking at providing something like [mortgages], and I couldn’t see any reason why they wouldn’t do it – but I don’t know if it’s going to be a threat,” he said.
But Mr Alabakov believes any supermarket that enters the mortgage space wouldn’t need brokers anyway.
“They have extensive databases with consumers' details and buying habits; they’re in a perfect position to market themselves to the masses. I don’t think they’ll see any need to accredit brokers,” he said.
Speaking at the launch of the Genworth research paper, executive chairman of Aussie John Symond said he wasn't worried.
“It's just distribution evolving,” he said.
Wesfarmers applied for a banking licence from the Australian Prudential Regulation Authority in September. However, the application may take up to 12 months to be approved.
In addition to supermarkets, 24 per cent of lenders and brokers also believed that superannuation funds were another new entrant worth keeping an eye on, and telcos and utility companies are also expected to enter the fold.
Challenger bank AMP has announced that it will be increasing v...
REIWA president Hayden Groves says claims of unilateral credit...
Top 25 mortgage brokerage 1st Street Financial has announced t...