Brokers writing 90% of mortgages for online platform

“When we launched LoanDolphin in February this year, we decided to work in partnership with mortgage brokers as we believe they have insights which are valuable to consumers,” Mr Mendis said.

“Mortgage brokers have a deep understanding of the credit policies of various lending institutions and risk profiles that help customers get a better rate,” he said.

“Automated systems are an essential part of our banking system, but human knowledge and expertise is still important.”

Currently 90 per cent of LoanDolphin’s deals are written by mortgage brokers – a clear indicator of how much value they bring to the mortgage process, Mr Mendis says.

“They play a crucial role in helping our users save an average of $5,000 per annum on a 30-year home loan, which equates to $130,000 on a $500,000 [loan] over that period.”

Brokers from across Australia are starting to see the business benefits of partnering with fintech platforms like LoanDolphin, which can be a lucrative lead generation pipeline.

However, Mr Mendis said the company has a strict process when it signs up brokers: “We interview them to gain an understanding of their experience in the industry and their reasons for being a mortgage broker. We also verify their licensing via the MFAA, FBAA and ASIC for their ACLs,” he said.

“For the consumer we have a public rating system whereby customers can review their experience (the mortgage broker receives a rating). This also helps brokers build their businesses by providing quality service.”

The digital distribution of home loans is still in its infancy in Australia. Some start-ups are clearly looking to compete with both brokers and bank branch networks. But not all of them.

Like LoanDolphin, Sydney-based fintech LoanFlare decided to partner with brokers after seeing how dominant the third-party channel had become in Australian mortgage distribution.

LoanFlare provides dynamic home loan rates for consumers to enquire about, empowers clients to enter their application details and provides instant serviceability calculations — all through an engaging website. On the broker side, it also automates workflows and data entry, provides actionable intelligence and minimises fraud through a comprehensive audit trail.

Meanwhile, online portal HashChing built its business around brokers and has seen over $2 billion worth of home loans flow through its platform in just 12 months in business.

“Nearly 4,000 customers to date have used HashChing to negotiate home loans with interest rates that are well below the banks’ standard advertised variable rates,” HashChing’s Atul Narang said.

“Being able to access mortgage brokers directly is something that previously hasn’t been possible, and it’s saving our customers tens of thousands of dollars over the life of their home loans,” he said.

Smart use of technology is central to the group’s offering. HashChing is using proprietary technologies and algorithms developed in-house to scale up the business as it attracts more users.

“We have combined the latest in artificial intelligence and machine learning to match Australian home buyers with award-winning mortgage brokers in their area,” Mr Atul said.

Adelaide Bank general manager Damian Percy recently spoke out about the emergence of new online mortgage platforms. He believes brokers are more likely to disrupt than be disrupted and that the use of technology will continue to be an important feature in the evolution of mortgage broking in Australia.

“Brokers have long been at the forefront of applying technology to improve their proposition,” he said.

[Related: Big four bank invests $16.5 million in fintech]