Last month’s The Adviser carried all the results of our annual non-major banks ranking, based on feedback from the third-party channel. Here, we give the heads of each lender the right of reply. For some, just recognition for 12 months of hard work; for others, it was a case of ‘more work needed’
10. Getting the message out – Heritage Bank (last year: 8th; area of strength: channel conflict)
Heritage’s offering is not resonating as it should. That said, its head of contact centre and intermediaries, David Ure, says it’s been a fruitful 12 months
Despite a last-place ranking, David Ure has cause for optimism.
He says the bank has enjoyed a good year and adds, “We are looking to grow origination levels in the next financial year and develop deeper relationships with our broker customers.
“Heritage has continuous processes in place to improve all facets of our business to remain a relevant business partner in the broker channel.”
One area of Heritage’s offering that brokers clearly did not like was technology, with the bank ranked last in all but one of the tech categories.
“We have increased our development budget and recruited additional staff to enable us to improve our online and mobile presence,” Mr Ure says of the work it is doing in the tech space.
That need to improve appears to be across the board for Heritage. Mr Ure says brokers should look forward to a suite of changes in coming months. “We are looking to roll out some changes to our product range in October, with a full overhaul to hit the market by early next year,” he reveals.
9. Rankings unfair to smaller lenders – Adelaide Bank (last year: 10th; areas of strength: BDM support, credit assessment staff, turnaround times)
Adelaide Bank’s senior manager of broker distribution, Fons Caminiti, believes this year’s rankings could be unfairly weighted against the smaller players
Fons Caminiti believes this year’s rankings were unfairly weighted against his bank – Adelaide Bank – and he’s happy to convey the message in no uncertain terms.
“We were ranked poorly for areas that are just not applicable to us,” he tells The Adviser. “Take crosssell: that’s not what we do, so those scores have naturally weighed down our average overall.”
A fair point, which The Adviser acknowledges.
Rather, Mr Caminiti would prefer to highlight the positives Adelaide Bank has offered brokers over the past 12 months – the upgrading of its online banking platform, introduction of an ‘e-statement’ functionality option for customers, and an altered free structure that gives clients unlimited free transactions on their 100 per cent offset facility.
Plus, no bank fees for the life of the loan for any variations post-settlement.
“We pride ourselves on our servicing capability both front- and back-end,” Mr Caminiti says. “We believe in our process and we believe in our people, who are the heart and soul of our business. Our BDMs richly deserve the recognition they have received in [The Adviser’s non-major lender ranking],” he says.
8. Right on rates – ME Bank (last year: 9th; areas of strength: pricing, client support, channel conflict)
When it came to rates, ME Bank was arguably the most aggressive lender in the third-party channel over the past year. But as the bank’s national manager for brokers, Stewart Saunders, agrees, great product and price need to be matched by back-end service
The broker channel is hugely important to ME Bank, says Stewart Saunders, who agrees the lender still has some work to do to improve its perception by the third party.
One of those perceptions that it has worked hard to change is that you have to be a member of a union or super fund to access ME Bank’s discounted rates. With this effort, Mr Saunders believes the bank will be on target to double its home loan market share and triple its customer base by 2020.
“It’s pleasing to see brokers starting to recognise some of the changes we’ve made over the past 12 months,” Mr Saunders says. “Brokers are finding ME Bank easier to deal with, based on consistent turnarounds and improvements in overall support.
“Broker sales have subsequently resulted in a 50 per cent increase in ME Bank’s home loan business in the past 12 months.
“ME Bank values continued broker feedback and will continue to listen and introduce changes, supported by a $70 million technology transformation project that will significantly improve the efficiency of the bank’s operations.”
He notes that the bank’s decision to heavily discount rates has seen broker applications and settlement volumes increase by as much as 400 per cent over the past year.
However, he also concedes the lender has been let down by poor back-end and turnaround times in the past, something it is working hard to rectify.
“In the past year, ME Bank has added an additional 50 staff in credit operations and overall support to improve consistent turnaround times and provide a better experience for brokers,” Mr Saunders says.
“Our recruitment strategy in this area also supports our expected future growth in broker sales, which has seen us recruit ahead of the curve. Additional resourcing will also be complemented by our technology transformation project that will introduce functions such as automated processes, resulting in quicker approvals.”
7. AMP scores on product – AMP Bank (last year: 6th; areas of strength: commissions, channel conflict)
Brokers liked AMP Bank’s product and commissions, but as the lender’s head of sales and marketing, Glenn Gibson, admits, there’s still work to be done in support and technology
In a year that appears to have seen every lender drop rates to entice customers, AMP Bank has been one of the few lenders reluctant to pull the price lever. Consequently, brokers ranked the bank well for product but less so for rates.
“AMP’s product range is quite broad, which means we can service the needs of most customers,” says Mr Gibson. “While AMP Bank is not always the price leader, we are always competitively priced – especially when you include fees, charges and features.”
But if there was one area that brokers had taken to, it was the bank’s commissions. Mr Gibson agrees commissions are important to the broker channel but says it’s “the total package that brokers are looking for – product, price, service, credit and BDM support”.
Interestingly, brokers weren’t overly enamoured with AMP’s back-end and support, something Mr Gibson acknowledges but puts down to the popularity of its products. “Our ability to process loans in a consistent timeframe has been a challenge for us over the past few years,” he concedes. “We have held market-leading positions on product and price a number of times and that popularity sometimes leads to reduced service levels.
“We have been developing our technology capabilities and are launching the first phases of this initiative in the last quarter of this year. We have taken on board the feedback we receive from brokers and we’re excited about our upcoming abilities to meet the service and support needs of our clients.”
Looking ahead, Mr Gibson says the bank plans to expand its product suite in both residential mortgages and across its financial adviser-originated business.
“In the next 12 months we will be rolling out some initiatives that we have been developing over the past year which will make AMP Bank an even more attractive alternative to both brokers and their customers,” he says.
6. Getting it right with tech – St George Banking Group (last year: 7th; areas of strength: technology platforms, product)
The St George Banking Group scored well for tech, product and price, which the bank’s general manager for mortgage broking, Clive Kirkpatick, attributed to 12 months of hard work
“We have the advantage of three strong local brands responding differently in their own local markets, providing customers with great local banking alternatives,” Mr Kirkpatrick says. “For us, it’s about playing well in the space we’re in with some market-leading niche solutions, be they SMSF, family pledge, common debt reducer, redraw or fixed loans.” And for St George, it is product that has resonated with the third party, earning the lender a fifth place ranking overall, with good scores for policy and cross-sell.
Technology too was another area that the bank ranked well in. “We’ve always prided ourselves on being leaders in the technology space and this past year has been no different,” Mr Kirkpatrick says.
“We were first to market with supporting docs online and brokers are seeing the benefits. We’ve taken the guess-work out of the equation; the system tells brokers what supporting docs they need to provide for the specific application they’re lodging. It just makes the whole the process quick and straightforward.”
However, if brokers marked the bank ‘try harder’, it was regarding turnaround times and support, with St George placing last for BDMs and call centre support.
“We have been speaking to brokers and we understand where the issues are,” Mr Kirkpatrick acknowledges. “We have just gone live with a new settlements partner who will provide end-to-end service delivery ownership, including certification, receipt of signed loan documents, settlement bookings, attendance and registration.”
Commissions too were another area of concern, with brokers ranking them ninth both for commission structure and remuneration. “Late last year, we simplified our commission structure and we believe we now have a strong structure in place,” Mr Kirkpatrick adds. “We pay 0.65 per cent upfront on all settled new residential home loans and increases on existing home loans. The conversion incentive has been discontinued and there will be no change to current arrangements with respect to trailing commission.”
5. Responding to feedback – Citi (last year: 5th; areas of strength: commissions, commitment to channel, broker communication)
Aaron Milburn knows Citi needs to work hard to get its products in front of brokers and their clients, and that’s why he has spent the past three years listening to broker feedback to improve the bank’s proposition
“As I’ve said before, mediocrity is not an option for us,” Mr Milburn says. “We must continue to improve and we’re not arrogant or naive to think that we’ve nailed it. We will continue to get feedback and take that feedback and do something with it.
“I want brokers to know that when they bother to give us feedback, we really do take it on board and 80 per cent, if not more, of our proposition and our service offering is designed by brokers for brokers.
“I think that resonates with the third-party channel,” he says – and as evidence of that, Citi was ranked third in the “commitment to broker channel” area.
Brokers also responded well to the bank’s commission structures, ranking Citi third both for structure and remuneration. “Our commissions have never wavered,” Mr Milburn says. “We never reduced commissions during the GFC – we’ve always held firm – and that’s why we’ve never had to pull them back up again.”
Citi also appears to be one of the leading lenders when it comes to supporting brokers, with turnaround times and BDM support all getting a tick.
“In the past 12 months, we sat down with some key writers and asked them to ‘blue sky’ what great service [from] our credit operations team would like,” says Mr Milburn.
“We took that on board and we’ve rolled that out over the past 12 months. Direct access to a credit model is fantastic. Our BDM level of education and engagement is paramount – and always has been – at Citi.
“We really looked at how we performed [in The Adviser’s nonmajor rankings] last year. We went out and we found out what was broken and we put the action into place and it looks like we’re moving in the right direction,” Mr Milburn says.
4. Suncorp shines with product – Suncorp Bank (last year: 3rd; areas of strength: product, technology, turnaround times, BDMs, credit assessment staff training)
As head of intermediaries, Steven Degetto says Suncorp Bank assigns great importance to the third-party channel. And brokers have responded, giving the lender’s product range and back-end support the thumbs up
Whatever Suncorp Bank is doing, brokers clearly like it. And Steven Degetto believes it’s for two reasons. One, the broker channel is an integral part of the bank’s strategy; and two, over the past 12 months “we have invested in the channel significantly with people and our service proposition to brokers”.
Mr Degetto cites Suncorp Bank’s 48-hour service guarantee launched 12 months ago as its commitment to brokers and their customers.
“Over the last 12 months, we have focused on driving sustainable, profitable growth through brokers,” he says. “We have grown our lower LVR business over this time and a larger number of brokers now think of us for this type of lending. To play in this space you need competitive pricing, which we consistently offer, as well as a flexible product and experienced business specialists.”
Brokers also liked Suncorp’s tech offerings and Mr Degetto believes these platforms are becoming increasingly important in the lender/broker/client relationship. “Technology, and the further integration of this into ours and brokers’ businesses, will be a major consideration for the industry over the next 10 years,” he says.
“Customers expect banks to be technology leaders and to make it simple for them to access banking services.”
However, if there was one area in which brokers were not a fan of Suncorp, it was commissions – here, the lender ranked sixth overall. Mr Degetto believes that, nevertheless, good brokers will always put good product over good commissions.
Another area of concern was channel conflict, with the bank ranked seventh overall. But as one of the few non-majors with a branch network, isn’t that to be expected?
“Many of our top performing brokers have great relationships with their local branch and we respect a customer’s choice to use a variety of ways to solve their financial needs, be it directly or via a broker,” Mr Degetto concluded.
3. Ear to the broker channel – Bankwest (last year: 4th; areas of strength: product range, price, policy, cross-sell)
As a lender that always punches above its weight with brokers, Bankwest’s head of brokers, Ian Rakhit, explains that much of how Bankwest operates comes from listening to the third party
Bankwest quizzes the broker channel about its own performance in quarterly surveys and, as Ian Rakhit says, there’s recurring feedback around responsiveness.
“Recently, we deployed a new operating model,” Mr Rakhit says of just one of the bank’s initiatives stemming from third-party feedback. “[It] enables more desk-based support at a local level while enabling our BDMs greater opportunity to engage with their brokers through face-to-face appointments.”
According to the report, brokers particularly liked Bankwest’s product, ranking the lender second for range, crosssell, pricing and policy.
“The ability to corner the market with niche products and policy is at the heart of what we do at Bankwest and recently we announced the reintroduction of trail commissions in year one for sub-75 per cent LVR business,” says Mr Rakhit.
Bankwest does well at getting brokers to cross-sell – so is that down to training of brokers, incentivising or a bit of both? “We have a dedicated team to support cross-sell initiatives and implementation of these products at conditional approval stage via phone,” Mr Rakhit says. “Furthermore, we offer brokers the ability to engage with our store network at a local level.”
Two areas for which brokers marked Bankwest ‘try harder’ were turnaround times and channel conflict. On turnaround, Mr Rakhit said the bank’s goal over the past year was to have 80 per cent of all deals unconditional within five days.
“Our ability to approve LMI deals in-house has increased and is shortening the service chain dramatically, while our Premium Club brokers enjoy 24-hour turnaround times with the ability to order up-front valuations,” he says.
When it came to channel conflict, Mr Rakhit was surprised by the result and believes the cases are isolated. “We are very clear on expectations to our colleagues and the value of the broker-introduced relationships to be upheld,” he concludes.
2. The genuine contender – Macquarie Bank (last year: 2nd; areas of strength: commissions, BDMs, turnaround times, credit assessment staff, valuation ordering online)
With a book worth $24.5 billion and brokers scoring the lendertop marks, it’s clear Macquarie’s strategy is hitting the spot. Head of mortgage sales Doug Lee explains the bank’s success
If there's one non-major that can take the fight to the big four it has to be Macquarie Bank. The often cagey lender clearly has set itself the target of taking a far bigger slice of the mortgage lending pie. And its strategy – being one of the industry’s best payers of commission, coupled with ramped up back-end support – is clearly winning over plenty of brokers.
“We put brokers at the centre of our business and focus on building and strengthening broker relationships, seeking and acting on feedback, and providing quality products and services for brokers and borrowers,” says Doug Lee.
“This past year, we didn’t make significant changes to our offering but instead looked at smaller enhancements aimed at getting the basics right. We established a national broker advisory board which looks at what we’re doing well for our brokers, as well as where further work might be required to enhance our offering.”
As in 2013, Macquarie’s commissions were ranked top both for structure and remuneration. However, Mr Lee downplays their importance, saying it’s less about remuneration but rather “the simplicity, consistency and transparency” that brokers have warmed to.
Another area that was well received was Macquarie’s backend support and turnaround time, something Mr Lee attributed to the bank’s burgeoning team of BDMs.
“We also established a new product engagement team that provides training on Macquarie products and services for brokers – and particularly their back office staff – and, importantly, encourages feedback on the same thing,” Mr Lee says.
“Another core aspect of our service proposition is the access we give brokers to Macquarie’s credit team. Brokers interact directly with them, as well as hear from our credit specialists who contact them regarding applications.”
With the bank now vying with ING Direct for best non-major tech platform, Mr Lee notes Macquarie’s technology is “highly functional, efficient and user-friendly”.
1. Three's a treat for ING Direct – ING Direct (last year: 1st; areas of strength: ING Direct was ranked first in the 16 of 23 categories in this year's ranking and placed in the top four for each of the remaining seven)
Mr Woolnough characterises ING Direct’s third consecutive triumph in The Adviser’s non-major lender ranking as both pleasing and humbling
“Why I say that is [because] the broker community is a large community and it exists in order to give consumers a choice of lenders and it certainly does its part to engender competition,” Mr Woolnough says. “For ING Direct, being a branchless banking model, the broker community is extremely important to our ability to provide mortgage solutions to the consumer.
“We often say to brokers that they’re essentially our face-to-face branch network and 90 per cent of our mortgages now come through the third-party channel.
“You often see a lender hold a position for a time and then the rest of the market catches up, so for us to win this ranking for three years in a row is testimony to our commitment to the channel.”
Brokers clearly like ING Direct’s product and price, ranking the lender first for overall product, and in first spot for range, pricing, policy and cross-sell. Mr Woolnough attributes this to the work of the bank’s BDMs and support staff.
“We have an extremely strong and dedicated sales [staff] and sales distribution, which is very well supported through our credit staff, and we pride ourselves on our engagement model,” he says.
“That sees us represented at industry events, aggregator conferences, PD days, and we also run our own training and professional development days where our annual roadshow is very highly regarded across the industry.
“It’s all about having multiple touch-points and multiple reasons to identify our broker partners around ING Direct as an institution for their customers. We have extended to beyond just being a residential mortgage partner.
“Our strategy this year has been to be the primary bank for our customers, and we can help our customers get ahead financially inall aspects of their lives.”
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