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Challenger bank to reach 75% of broker market

by Francesca Krakue4 minute read

The CEO of Bank of Queensland has emphasised that growing the broker channel is one of the challenger bank’s main priorities for 2017 in order to “strengthen the quality” of its book and “attract a more diverse customer base”.

Following its trading update to the ASX yesterday, the managing director and chief executive officer of the Bank of Queensland (BOQ), Jon Sutton, highlighted that BOQ currently has more than 4,000 mortgage brokers accredited across its products, a number that the bank hopes to build on in 2017.

“Further expansion of our broker channels, combined with our ongoing network productivity, will strengthen the quality of our book by attracting a more diverse customer base,” Mr Sutton explained.

In particular, the CEO pointed to growth plans for the bank’s Virgin Money brand, which he said currently has 800 accredited mortgage brokers from two aggregators.

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“This is about to be expanded with the signing of two large aggregator groups,” he said, without elaborating on which groups these would be.

“Combining this with BOQ’s existing broker channels, this will increase BOQ’s overall access to 75 per cent of the broker market,” he said.

Mr Sutton also emphasised that the bank has been focusing on improving its processes and systems for the third-party channel to deliver faster results to clients.

“During the year, we rolled out a new commercial lending platform and made good progress on the next stage of our retail lending system,” he said.

“Both platforms will automate previous manual, paper-based processes and will deliver a quicker ‘time to yes’ for our customers.

“We have to make sure that we’ve got the right sort of products, we’ve got the right sort of processes to service the brokers – [so] we’re doing a lot of work on that,” he added.

Noting that, prior to 2013 the bank was “zero” with brokers, Mr Sutton said that the non-major is now starting to see between 15 and 19 per cent of its home loan volumes coming through the third-party channel.

“We’ve certainly seen increased activity levels over and above where we were in the second half, particularly with our spring campaign, and I would expect that over the coming years we’ll continue to see growth through the broker channel,” he concluded.

[Related: Brokers the channel of choice for Branson’s mortgage play]

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