The head of one of Australia’s largest non-bank lenders says there is a “revolution going on” in mortgage broking right now and that industry players must adapt and keep pace with change.
Firstmac founder Kim Cannon is one of the few non-bank lenders to have successfully survived the GFC. In recent years, he has been channelling his efforts towards Loans.com.au, the online lender he established in 2011 that today contributes more than 70 per cent of mortgages for the group.
Mr Cannon says reinventing himself and his business has become critical, and urges brokers to do the same.
“There is a whole revolution going on in broking at the moment. Nothing ever stays the same. I’ve been in business for almost 40 years. To stay focused and continue enjoying what you do you almost have to reinvent yourself every seven years,” he said. “Otherwise you become stale.
“There is a reinvention going on in the industry at the moment and that is what a lot of people don’t understand.”
While his foray into the world of online mortgages has been viewed by some as a move away from the third-party channel, Mr Cannon told The Adviser he is confident brokers will be part of the future of mortgages in Australia.
“But in what capacity I don’t know,” he said. “If the banking industry decides it doesn’t want them, that doesn’t mean the non-banks don’t want them.”
Mr Cannon’s comments come after recent reports that CBA and Westpac are looking to reduce their third-party footprint and boost mortgage lending through their branch networks.
Meanwhile, Australia’s non-bank lenders have become increasingly popular among brokers as banks face ongoing macroprudential measures and issues around channel conflict.
Momentum Intelligence’s Third-Party Lending Report: Non-Bank Lenders 2017 found that brokers rated the non-bank lenders more favourably than the big four and non-major lenders across a number of metrics. Non-banks particularly outperformed the bigger banks on service.
Evan Dwyer, managing director of specialist non-bank lender RedZed, explained that in addition to offering choice to customers, brokers also provide a variable cost alternative to lenders.
“When you compare the cost of hiring bank staff in a branch as a fixed cost for a lender, that’s really expensive,” he said. “Mortgage broking is a compelling proposition both from a supplier and a customer perspective.”
[Related: Major banks change third-party strategy]
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.
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