Non-bank lenders may be the smaller option, but they’ve been able to use their malleable size to capitalise on one major area: serviceability
Loan seekers can be wary about entering into the non-banking sector. Because the non-banks are smaller, some customers see them as the ‘unknown’, less secure choice.
But non-bank lenders have been using their size to get ahead on the banks’ weaker points. By personalising their services and providing a list of unique products, the non-banks are proving to be a competitive choice for any broker.
Adaptability to a fast changing world
Being accessible is a major draw card for brokers. Having a smaller client base means that non-bank lenders are readily available to talk to clients whenever they need.
Experts say this is especially important in today’s world because for many of us, our futures are less than clear. We live in a world where all aspects of our lives, including jobs, relationships, and asset accumulation can change from one day to the next.
Australian First Mortgage managing director Iain Forbes says this is where accessibility can play a key role in client satisfaction.
“Customers and brokers have direct access to the decision makers across the spectrum, from client services to credit and including directors as well,” says Mr Forbes. “For brokers this kind of accessibility means having the ability to meet their customers’ expectations.
“And access like this allows non-banks to be nimble and make quick decisions,” Mr Forbes says.
“In addition, brokers tell us that there is nothing more frustrating than telling a customer they will get an answer quickly, without knowing how long it will take.”
But accessibility is only one aspect of the process. With our lifestyles becoming ever harder to define, it is more difficult to simply place borrowers into set categories.
According to Better Mortgage Management director Murray Cowan, this means that lenders sometimes have to look ‘outside the square’, something that he says the majors are not typically set up to do.
“Consumers now recognise that larger institutions like banks have lost the ability to mitigate individual risks,” he says, before adding that banking assessments today have become automated and computerised. On the
other hand, by running a smaller office, non-bank lenders can take more time and care analysing a client’s individual circumstances.
“Every loan application is personally assessed, compared to loan applications being assessed by computers or via scorecard,” Mr Cowan says. This, he adds, means that non-bank lenders are able to specialise in applications that might normally fall outside ‘big bank guidelines’.
According to Mr Cowan, personalised service also means having a more diverse range of products to suit every client. One example is Better Mortgage Management’s Flexi Ultimate Alt Doc, which gives more options to self-employed customers, such as lower rates and more funding.
Mr Cowan adds that the banks can unfairly lump the self-employed in with other, more distressed borrowers.
“There are many reasons why businesses don’t have their most recent financials finalised, but this doesn’t mean that they aren’t strong, legitimate businesses,” Mr Cowan says.
Staying ahead of the game in technology
According to Mr Forbes, technology is another area that non-bank lenders can really take the lead in. The banks may have the funding to compete with technology driven services, but there isn’t always the drive to do so.
Mr Forbes says that making the most of new technologies enables the non-bank lender to maintain better client interaction.
“In today’s technologically driven business world it is very important for non-banks to utilise technology to stay ahead of the competition,” says Mr Forbes.
“Australian First Mortgage’s technology platforms encourage new brokers and borrowers to not only find us online, but also empower them to transact with us,” says Mr Forbes. “Clients can make enquiries, download forms and complete and submit loan applications as well.”
And he adds that brokers are also able to track and manage their loan applications through live accounts.
“We’ve also developed a sales directory which provides direct access to all of the things a broker or customer would need to facilitate doing business with us,” Mr Forbes says.
Australian Capital Home Loans managing director Barry Parker says that digital technology is also being used by non-bank lenders to keep clients better informed about the market.
“Within our website there are significant resources that allow people to satisfy their curiosity,” says Mr Parker. “There are articles, videos and educational modules for them to read and generally learn more about money and finance.”
But he adds that an advantage non-banks will always have is that clients aren’t pushed to use the technology if they don’t wish to.
“They can always come into the office and talk to us. It’s their choice,” he says.
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