The third-party channel will play an intrinsic role in AMP Bank’s repositioning, as it looks to build its loan book via brokers and enhanced digital capabilities, its new MD has revealed.
AMP has been rapidly transforming over the past three years, having shed its life insurance and vertically integrated wealth management offerings and now focusing on building its banking arm and mortgage book.
While the bank’s residential mortgage book was $20.6 billion as at 1H21, it had grown to reach $21.3 billion by the third quarter of 2021 – which it suggests has been driven by its modernised core system that had helped deliver a 70 per cent increase in home loan origination capacity.
At its investor strategy day last week (30 November), the group outlined its future “path [to the] new AMP”, in which it said it would “invest to grow AMP Bank”, with a key driver influencing its strategic direction being “customers’ increasing reliance on brokers’” as well as an increasing reliance on digital capabilities and digital channels.
Speaking to The Adviser about the mortgage push, AMP Bank’s new managing director, Sean O'Malley, confirmed that the broker channel was “really important” to the bank as it was its “predominant channel and will be [AMP’s] predominant channel for a long time to come”.
The new bank MD said: “We certainly note the importance brokers have to Australians as well; the latest results show 66 per cent of flows come through the broker channel. So it is a really important channel.
“For us, we’re centered on improving the service that we deliver to brokers and therefore enable for clients.”
According to Mr O'Malley, AMP Bank is particularly focused on three key service areas for the broker channel next year.
“When we think of service to brokers, we really think about it in a [few] ways. Firstly, turnaround time/time-to-yes is a critical focus. Our time-to-yes this year has been solid – and feedback from the [Broker Pulse] survey has shown that it’s solid – but, our aspiration is to improve time-to-yes significantly next year,” Mr O'Malley said.
“Beyond time-to-yes, we also think that ease of doing business with us is really important. Our ‘how’ on both of those things is all about further leveraging technology.
“AMP Bank, over the last few years, has done a lot of heavy duty technology work: renovating our core system, investing in auto credit decisioning, and we’re investing more in digitisation...
“For next year, what brokers should expect is that we’ll continue to invest in technologies that make it easier for a broker to do business with us [and] how we can remove waste in the timeframe to get a loan approved. That’s largely centered on technology, but it’s also simplification. So we’re doing work around continuing to simplify our offerings, and also simplifying our application process itself.”
According to bank MD, new improvements for the broker channel coming in 2022 will include:
He told The Adviser: “Really pleasingly, we’ve moved from about 20 per cent auto approved loans to around 60 per cent auto approved mortgages this year. And we’ve done that by being able to move more towards a data-driven assessment. We’re able to feed more information into our engine and as a result of that, we’re able to make it easier for brokers, with less requests for information, for example.
“We think there’s more opportunity to continue to look at how we use data, including how we will leverage open banking to be able to take other forms of data, ingest those into the engine and therefore make more decisions faster.
“Today, about 60 per cent of our loans are auto credit decisioned. I’d see that rising probably another 15-20 percentage point uplift next year.
“So all these enhancements will make it easier for brokers and easier for customers to do business with us.
“What we are saying to our brokers is very much about the service proposition. We’re aiming to not just deliver fast turnaround times, but consistent, predictable results, which means that a broker can – with confidence – recommend AMP Bank to their customers.”
The bank has been building its broker support team in the past year to help prepare for this push in the channel, having recently recruited Paul Herbert as its new head of intermediary distribution and governance, who has been tasked with driving mortgage growth and strengthening the bank’s service offering for brokers and advisers.
AMP will also next year welcome Felicia Trewin, currently AustralianSuper’s group executive for technology services, as its new chief technology officer (CTO) and member of the group executive committee.
Ms Trewin will start in the role in March 2022, reporting to AMP chief executive Alexis George and will be responsible for leading the group’s technology strategy and accelerating the adoption of digital and data technology across the wealth and banking business.
Speaking of Ms Trewin’s appointment earlier this month, Ms George stated: “Digital and data is a key enabler of our strategy and we are pleased to have secured a technology leader of Felicia’s capability to drive our agenda forward.
“She will bring energy and a fresh perspective, but also her extensive experience in the wealth and banking industries. Through her career, Felicia has [worked] on the full spectrum of technology from development of new tech through to large program delivery and optimisation. We look forward to welcoming her to AMP.”
The bank is also currently on a recruitment drive in Victoria, looking to strengthen its state team and expand its presence outside of its Sydney stronghold.
[Related: AMP hires intermediary head]
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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