Online lender identifies next growth opportunity for brokers

“The broker has a choice – they can either complete the RateEstimate form online on behalf of the customer, or they can send the customer a link to a unique co-branded website for the customer to complete the form,” RateSetter CEO Daniel Foggo told The Adviser.

“Thereafter, the broker shouldn't actually need to do anything. We work directly with the customer to complete an application. We notify the broker when the loan has been approved and also when it has been drawn.”

Mr Foggo said the online platform will help enhance the broker/client relationship.

“We are giving brokers a new solution for their customers,” he said. “By offering a personal loan, the broker remains relevant to the customer in another area of their life – it’s not just their mortgage. This also means the customer is not stepping away to another channel where the broker might lose their relationship with the customer,” he said.

“More importantly, the broker can show they are delivering value to their customer – the customer knows they are getting a better rate than they would get from anywhere else, so that reflects well on the broker.”

The move by RateSetter comes after PricewaterhouseCoopers said the use of algorithms to personal loan structures could reshape the Australian personal lending market.

Last week, PwC venture lead Katherine Maree Pace noted credit-rating algorithms leverage personal data and behavioural economics to deliver a more sophisticated segmentation of a traditionally ‘blanketed’ middle market.

“This is a fantastic plus for Australians seeking personal loans as algorithm intelligence moves us towards a future of personalised interest rates, specific to a person’s unique profile," Ms Maree Pace said.