Most loans to be sourced digitally ‘within 10 years’, says fintech

Vincent Turner highlighted research undertaken by financial services firm Deloitte in 2016 for the Mortgage and Finance Association of Australia, which found that 27 per cent of broker customers and 34 per cent of direct-to-lender customers would consider making digital mortgage applications, as testament to this potential.

He commented: “Busy professionals love this high-touch digital service. They don't have time for the traditional methods. Higher availability of service teamed with quality advice isn't being provided anywhere else and is an expectation from consumers in a digital economy. And the chances are, that if consumers are not using a digital service to find a mortgage, then they’re probably paying too much.”

Last month, Mr Turner told The Adviser that every year the industry gets closer to a point “where technology can make the entire lending decision”, but noted that artificial intelligence would not spell the end of brokers in the next decade.

He said at the time: “Each year, we get closer to where technology can make the entire lending decision. As long as you give it all the data and the documents, and you can assume that any documents you give it, it'll be smart enough to pull the data off those documents, populate it into a data file, then the lenders who can make decisions just based on uploading all of the documents you need for a particular person, they will win.

“And, if there's still the concept for brokers, it'll be a platform that has access to all of those lending algorithms.”

However, Mr Turner said last week that mortgage professionals were at the heart of the platform’s value proposition to customers.

He said: “Our biggest learning in our first 12 months is that we need to continually educate customers that a digital mortgage service does not equal self-service.

“Our 90-hour-a-week service levels, provided by advisers with five to 10 years of mortgage experience, is at the centre of our value proposition to customer.”

He added that he thought this availability “is higher than what [customers] are experiencing via their traditional bank or broker relationship”.

Consumers moving away from majors

The digital brokerage also released new data last week that suggested the majority of its customers (74 per cent) were choosing to borrow from non-major lenders.

The findings back those released by MyState Bank recently, which found that 46 per cent of brokers said there was a “marked increase” in the number of clients saying they did not want a mortgage from a big four or major bank.

Despite this, in the broader market, major banks possessed 82.7 per cent of the market share.

Mr Turner commented: “This analysis tells us that when consumers are given the opportunity to search and rank on criteria that is important to them, they show a strong preference for non-major lenders, contrary to the overall market share of the big four banks.”

[Related: Uno. boss reveals his vision of the future of mortgage lending]