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Non-major bank survey

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Emma Ryan 9 minute read

Who is leading the pack outside the big four? In case you missed it, here’s a recap of The Adviser’s Third-Party Banking Report – Non-Major Lenders…

Each year The Adviser’s Third-Party Banking Report –Non-Major Lenders showcases the best of the best and this year is no different.

1,017 brokers were surveyed on 10 non-majors and asked which impressed them the most across four main categories – products, support, technology and commissions.

ING Direct was the clear frontrunner, retaining its first place victory over the other nine lenders. It was followed by Macquarie Bank at second place, St. George Group at third, Suncorp Bank at fourth and Bankwest at fifth.

The lower half of the ladder saw AMP Bank in sixth place, followed by Citibank at seventh, Adelaide Bank at eighth, ME Bank at ninth and Heritage Bank rounding out the list at tenth.

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Join us in this wrap-up of the results and see what the non-majors had to say about their scores and what they aim to achieve in the next 12 months ahead.

10 - Heritage Bank 2014 rank: 10

Despite the bank branding this year’s results “disappointing”, it has prompted it to lift its game.

“The bottom line is that we will increase the amount of loans we write via mortgage brokers by providing the products and the experience that [broker’s] home loan customers value,” Heritage Bank head of third-party channels, David Ure, says.

Overall, Heritage Bank increased its 2014 ranking in the commission and support categories but decreased in the technology and product spaces.

“We believe we offer a great package,” Mr Ure says. “It’s more a case that we need to get that message out more widely and encourage brokers to experience the improvements we have made.”

Earlier in the year, Heritage Bank announced the recruitment of an additional four BDMs to better service its broker partners, while committing to enhance its electronic lodgement and website capabilities.

09 - ME. 2014 rank: 8

Moving down a peg this year, ME appears to have some work to do. Although the lender improved in the product and commission categories, it lacked execution in the technology and support categories.

Lino Pelaccia, general manager of broker sales at ME, is hopeful the lender’s recently upgraded technology platform will help change this perception.

“The completion of our technology transformation in July enabled ME to launch its first basic home loan product, and more recently we introduced new discounted variable rates on our standard home loan member package, for the first time,” he says.

ME also has plans to continue improve its commission proposition to broker partners. Since entering the broker channel in November 2011, ME has increased its upfront commissions from 0.60 per cent to 0.65 per cent.

08 - Adelaide Bank. 2014 rank: 9

It's been a fairly successful 12 months for Adelaide Bank.

Brokers up-ranked its performance in the commission, support and product categories. However the same couldn’t be said about technology, where the bank dropped back one place.

To further improve its offering to third-party introducers Fons Caminiti, Adelaide Bank head of mortgage broking, says the lender’s main priority is replacing its origination systems.

“It’ll make a real difference, not only to us and our partners, but to customers who will have greater transparency, and control, of the process,” he explains.

“We’re also continuing to broaden our third-party exclusive product offerings around non-lending products.”

Given ARPA’s crackdown on investor lending this year, Mr Caminiti believes “we can expect a fair degree of craziness in the owner-occupier space, at least until the major banks push up rates as a consequence of the additional capital they are required to hold by June next year”.

“A cynic might think they are filling their boots with an expectation of repricing the portfolio at a later date,” Mr Caminiti adds.

07. Citibank. 2014 rank: 5

It's been a tough year for Citibank with the lender falling two places from 2014’s ranking.

Brokers appeared to change their tune about Citi’s commission offering and decreased its ranking in this category from three last year to seven this year – a four-peg slide over 12 months.

The international lender also fell in the support and technology categories, but improved by three places in the product category, indicating where its attention has been over the year.

“Our focus continues to remain on our product offering and striving to deliver exceptional customer service,” Citi’s managing director of sales and distribution, Janine Copelin, says.

Looking ahead, Citi aims to concentrate on delivering good customer service – including to its investor customers.

“Of course, further improvements to our digital strategy over the next 12 months will help us achieve that focus,” Ms Copelin says.

“We regularly review our lending practices and will act in line with market conditions. We will continue to make available investment loans to our customers.”

06. AMP Bank. 2014 rank: 7

AMP Bank's ranking bumped up a notch this year with brokers impressed by its support, technology and commission offerings.

The lender did however shuffle down in the product category, which head of sales and marketing Glenn Gibson attributes to the “challenging environment” of late.

“Our focus is on making sure we have the right products that are competitive in the market. Our recent product and pricing changes show our commitment to do this,” Mr Gibson says.

In the next 12 months, AMP Bank plans to deliver an enhanced mortgage origination platform to its broker partners.

“AMP Bank has always had competitive and attractive products. Our dedication to delivering service that matches these products is paramount to our future success,” Mr Gibson explains.

“We have seen increased competition in the owner-occupier space for a few months now and I don’t expect to see that diminishing in the near future.

“A more competitive environment in the owner-occupier space will flow through to customers with lower rates, fees and other benefits.”

05. Bankwest. 2014 rank: 3

Even though Bankwest fell two spots in this year’s overall rankings, the lender has more determination than ever to meet the needs of its broker partners.

“This year’s survey has come at a time of significant change in the lending landscape and Bankwest’s response to these changes may have affected some of the results,” the lender’s general manager of broker sales, retail, Stewart Saunders, says.

“We certainly have some areas we need to focus on in order to meet brokers’ expectations, let alone surpass their expectations.”

Mr Saunders says Bankwest has a number of initiatives that will be rolled out to brokers over the next year.

“We will be launching a new upfront valuation portal; we will be refining our application processing; and working to build a better on-boarding experience for our brokers’ customers,” he explains.

“The 2014-15 financial year saw close to three-quarters of Bankwest home loans originate through brokers. In the year ahead, we see this remaining stable or growing marginally with overall growth in volumes.”

04. Suncorp Bank. 2014 rank: 4

Suncorp Bank has firmly cemented its status in the non-major sector. The lender either improved or remained consistent with its rankings across all categories.

Brokers were particularly impressed with the bank’s commission strategy and product offerings, up-scoring it in both categories by two points.

“Over the past 12 months, we have grown our intermediaries’ business year-on-year by 41.78 per cent and we have continued to deliver a consistently good service to our broker partners and customers,” head of intermediaries Steve Degetto says.

The next 12 months will see the bank expand its offerings to third-party loan introducers by replacing its core banking platform.

“We believe this, combined with our investment in enhancing our digital proposition for brokers, will see our position lift over the next 12 months.” Mr Degetto adds that Suncorp is committed to working with more brokers over 2015-16.

“One thing we’re focusing on into the future is how we can work with brokers to keep the customers they bring to us and grow those customers’ products with us.”

03. St, George/Bank of Melbourne/Bank SA. 2014 rank. 6

The St. George Group made a substantial turnaround in this year’s report, increasing its rankings across most categories.

The biggest jump came from the support and commission categories, with both being up-ranked by brokers a massive six places.

Technology also excited brokers, with this category scoring a two-place increase from last year. However product was the only category where the bank saw a decrease in broker satisfaction, moving slightly down the ladder by one rung.

“St. George has undertaken a number of initiatives to strengthen and improve our processes and procedures, and importantly deliver an exceptional customer experience and a faster time to ‘yes’,” general manager of mortgage broking Clive Kirkpatrick says.

“It’s fantastic to see that our efforts are beginning to make a difference for our brokers.”

Mr Kirkpatrick says competition will continue to provide customer focused campaigns to ensure St. George remains competitive.

02. Macquarie Bank. 2014 rank. 2

Despite decreasing slightly in the commission, technology and product categories, Macquarie Bank’s results reflect a consistent approach over the last 12 months.

“It’s been more about maintaining and refining what we have been recognised as doing well,” Macquarie’s head of sales and distribution – intermediaries, Doug Lee, says.

Next year will see the launch of Macquarie’s core banking and digital platforms, which Mr Lee says will be an advantage to the bank’s broker partners and their customers. “They are a significant channel for us, which is why it’s important that we continue to provide solutions and support that really make a difference to brokers and their clients,” he says.

Given the significant modifications in investor lending over recent months, Mr Lee says competition is bound to pick up in the third-party channel.

“We are already seeing increased competition for owner-occupier loans, particularly around rates, and we expect this to continue,” he notes. “Commercial lending is also a growing area of interest and there may be an increased number of lenders offering commercial loans in the broker space.”

01. ING Direct. 2014 rank: 1

ING Direct has retained its title as best non-major bank in this year’s report, receiving a number one ranking across all four categories.

“This is a huge achievement and a testament to the true partnership we have with our broker partners,” head of third-party distribution, Mark Woolnough, says.

Over 90 per cent of the bank’s loans in the past 12 months were introduced by brokers – something it aims to continue over the next year.

“We, of course, ensure we are priced competitively, but pricing is just one of many factors that make up a compelling offer,” Mr Woolnough says.

“We have also been focused on expanding our commercial team, to better support our broker partners to grow their businesses through adopting new revenue streams.” ING Direct is currently investing in a new mortgage origination system, with the aim of reducing turnaround times, removing manual processes and improving the overall broker experience.

“Each of our teams has a Service Level Agreement (SLA) which they endeavour to meet,” Mr Woolnough adds.“We monitor our SLAs every day to ensure the broker’s expectations are met, making their experience with us as seamless as possible.”

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