The head of the broker association has voiced her ‘disappointment’ that channel conflict is ‘rearing its ugly head’ as more banks announce a proprietary-first strategy.
Anja Pannek, CEO of the Mortgage & Finance Association of Australia (MFAA), has written an open letter criticising major banks’ plans to increase focus on proprietary lending channels, including digital and branches.
The letter comes as all four major banks strategically focus on driving home lending growth through the proprietary/direct channels. Last week, both Westpac and National Australia Bank (NAB) flagged that they would be focusing on driving home loan growth through their proprietary channels, after similar moves by ANZ and CBA.
Pannek cited a record-high mortgage broker market share of 77.6 per cent of all new residential loans in the June 2025 quarter, stating that Australian borrowers are choosing the broker channel in “record numbers”.
The MFAA CEO identified channel conflict as a current issue, reporting that members have detailed instances of “under-the-counter” branch pricing and loan applications being declined by a broker, but subsequently approved in-branch.
She stated that these practices raise concerns regarding potential lender bias in credit assessment, noting that they “undermine the foundation of our industry – trust”.
Pannek asserted that the high market share, which has accelerated since 2020, is evidence that borrowers value the broker model, which is based on choice, trust, and expertise.
The open letter reads: “It remains unclear to me how lenders could deliver the personal connection and guidance that thousands of small broking businesses provide every day. The challenge of supporting borrowers navigating their financing needs is even more acute across regional and rural Australia, where lenders have progressively closed their branches, providing no physical means of support to these communities.
“Australia has one of the most consolidated banking systems in the developed world. Without brokers, Australian borrowers would be worse off, with fewer choices and more expensive mortgages. That’s an outcome no government, regulator or consumer advocate would welcome.
“Brokers don’t compete with banks, despite what we are reading in the media. Banks compete with each other. Every pricing decision made by a lender positions them against other lenders and is driven by their own growth targets.”
The letter said that without brokers, Australian borrowers would face fewer choices and more expensive mortgages within Australia’s highly consolidated banking system. Pannek stated this outcome would not be welcomed by “government, regulator or consumer advocate”.
Pannek also emphasised the value brokers deliver to lenders, noting that brokers connect lenders with thousands of customers they would otherwise not reach. By preparing, educating, and qualifying borrowers, brokers enable lenders to operate efficiently without rebuilding costly branch networks. Furthermore, new and smaller lenders rely on brokers to achieve scale and compete with large incumbents.
Pannek concluded that a home loan is not an “add-to-basket” transaction due to its emotional, complex, and personal nature, and that the industry’s direction will be determined by the choices Australians make, which currently favour the broker channel.
She concluded: “Allowing channel conflict to persist undermines the trust and respect we should always have for one another. It wastes effort, it perversely destroys lender margin (especially when price undercutting and cashbacks come into play) and often results in a very poor customer experience.
“A home loan is also not, let’s be clear, an ‘add-to-basket’ transaction. It’s the largest financial decision most Australians will ever take. It’s emotional, complex, and deeply personal. It’s about an individual’s future, their family and their home. Australians deserve support to understand their options, and the right to choose, not to be channelled towards one lender, a single product or a black box solution.
“The direction of our industry won’t be determined by short-term corporate strategy aimed at ‘owning’ the customer. It will be determined by Australians and the choices they make.
“Every day more borrowers choose brokers, not because they have to, but because they want to. They value real choice, trust and expertise. And that is why I’m confident in what lies ahead for our industry.”
You can read the full open letter here.
[Related: Beyond the spin: The real price banks pay to replace brokers]
