This month we ask: Does channel conflict still exist?
Four ways to beat it
It’s inevitable because branch staff are remunerated by lending volumes. It would be a rare branch manager who would turn back a potential customer. We can take more ownership of this issue. One, build the relationship with the client. Two, develop white-label products with attractive rates and features. Three, establish relationships with branch managers. Four, establish ourselves as the “owner” of the client relationship. It’s time to step up.
John Tindall, Choice Home Loans
Need to sell yourself
Wherever there is competition for a sale, there will be potential for conflict. Customers are quite fickle and will shop around for low interest rates as though they are chasing cheap fuel. Our job is to ensure that we educate our customers that we are a service provider and that we will always keep them abreast of any opportunities to better their overall position. If we give them any reason to contact a branch directly then of course the branch will try to make a sale. After all, we are in sales – not finance.
Karen Hambleton-O’Grady, Simply Mentoring
Conflict is reducing
With low rates and rising house prices, the competition between lenders and brokers is apparent. I believe channel conflict has reduced in recent years, but it will always be there to some degree as branches are incentivised – or it is part of their KPIs – to find clients and grow their book. I have had little exposure to channel conflict in my career. Brokers develop a closer relationship with their clients and banks can’t compete with the added personal service.
Kerrie Watkins, Wealthie
Banks poaching clients
It should be an even playing ground between the broker and the branch. Recently, I had a few situations where clients were coming back to me with offers from branches that I couldn’t get matched. Clients have gone into a branch to take out money and the teller will ask them about their loan or if they’ve been thinking about buying a house. From there the loan has been rewritten by the bank. Why is the branch even bringing that up with the client when it should say that they’re a broker client?
Nathan Taddeo, Credo Financial Group
Lenders under pressure
Channel conflict has always existed in the third-party space. Lenders and their branches are under extreme pressure to perform to set sales targets and excel quarter on quarter. I would say channel conflict is less evident now, especially when lenders are trying to build a strong long-term relationship with the third-party channel. More open discussion within the industry about channel conflict would encourage better co-operation between lenders and the third-party channel.
Vishal Gupta, Unique Finance Services
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