The banks and brokers “of the future” will deliver a “whole home” experience for customers, from mortgages to the products and services they need to move into that home, the founder of Volt Bank has said.
The neobank, which was granted a full banking licence in January of this year and is expected to officially launch later this year, has said that banks and brokers will increasingly need to focus on customer service as a holistic proposition rather than being tied to a particular product.
Speaking to The Adviser, Volt’s co-founder and CEO Steve Weston elaborated: “I think that the future of the mortgage space – both for brokers and particularly for us, as a lender – will be that the focus will be on not just giving someone a home loan, but helping them buy the homes or the things to go with getting into your house.
“Some brokers may be already providing these services. It’s about the whole home experience; once customers have a home loan, how do you help them with budgeting to pay that home loan off more quickly?”
He continued: “For hundreds of years, banks have done the same thing. Someone needs a loan, they give it to them and leave them to their own devices to pay it.
“The banks and brokers of the future will understand what you are trying to achieve in your life and they will help bring all the solutions and bank products that you need to achieve that outcome. It’s not just about the mortgage or the savings account, but teaching you how to save and budget, show you where to get better deals on your financial and non-financial services products like utilities, insurances, etc.
“It’s not just getting someone a home loan, but helping them get into a home and pay the thing off.”
Mr Weston added that he believes that the evolution of the finance space will therefore have a “much greater focus on things that are outside of just providing a deposit or a loan product”.
Mortgages and broker remuneration
The former CEO of mortgages and managing director of retail lending at Barclays (UK) and a former general manager for broker platforms at NAB said that Volt Bank is currently working with borrowers and brokers through Volt Labs to develop its product and service offering and is expected to launch deposits in the second half of this year, followed by mortgages at the end of this year or early 2020.
Mr Weston said: “What we are doing now is taking a very similar approach to what has worked well for neobanks overseas. You don’t just go and build a product and put it into market, but rather, you go and find out who your most passionate future customers will be, ask them what they need from you as a bank, and go and co-design it with them.”
He revealed that the testing phase so far has revealed that the key concerns for both consumers and brokers are “speed, clarity and certainty”.
“Whether it be clarity around pricing or certainty around the underwriting guidelines and whether or not a loan is going to be approved, all users want lenders to be very transparent around what they will and won’t do. And they want to know those answers very quickly rather than waiting days to find out they don’t fit [the bank’s risk appetite].”
The Volt Bank CEO noted that the broking industry was going through a period of uncertainty around remuneration, adding that Volt recognised that “as a new lender, we are going to need to be competitive in pricing and are going to need to pay brokers fairly as well”.
“Whether the government is re-elected or whether there is going to be a change in government, it is going to dictate the course of history for what broker commissions are,” Mr Weston told The Adviser.
“But, I think trail plays a really important role in brokers looking after their customers. They are incentivised to keep their customers happy, not just at the point of sale but on an ongoing basis. Plus, trail enables a broker to put value in their business, something that can sell in the future,” he said.
Mr Weston concluded: “We’ll do what we are told [by government to do] but I, for one, would like to see the continuation of trail.”
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.
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