Futurist, author and start-up founder Brett King has suggested that mortgage brokers would need to broaden their offering to survive an increasingly digital lending environment.
Speaking after AMP’s Amplify Festival in Sydney on Wednesday (13 June), the CEO of banking technology provider Moven said that as lending and finance becomes increasingly digitised and easier to access, brokers will have to change their proposition to customers.
In this future vision, Mr King said that voice commands, platforms, phone apps or augmented reality systems could become the platform for mortgages in the next 10 to 15 years, making mortgage product choices more accessible and with fewer touch points.
As such, the Moven CEO added to increasing suggestions from futurists and technology providers that brokers would naturally have to change their offering.
Mr King said: “The value that we have traditionally as a mortgage broker was advice and access... But once that advice on the product becomes ubiquitous or the ability to get access to finance is much much lower-friction, then the choice of a mortgage product is no longer the key piece of advice; it is really about the home buying experience that becomes critical.”
He continued: “I think the first phase is really supplementing the existing architectures we have for advice, but ultimately if you think about a mortgage, your ultimate objective is to buy a home. So, the advice will centre more on what sort of home you should buy, when you should buy it, how you can buy it... That advice becomes far more critical in terms of connecting with the customer with the delivery of, ultimately, a mortgage product than the features of the product itself.”
Mr King therefore suggested that brokers start expanding beyond offering product advice.
He said: “If you look at the experience around the mortgage, start extending beyond just the mortgage product, and start thinking about the experience of buying a home and where you can get that experience based on the technologies that are emerging. That is really key, and that really comes back to partnership. The partnership between the mortgage broker and the mortgage provider from a platform perspective, with other players in that ecosystem that represents buying a home and becoming more open and accessible to that.”
In response, AMP Bank group executive Sally Bruce highlighted what previous commentators have suggested that 40 per cent of S&P 500 businesses will disappear in the next 10 years, adding: “The broker is the frictionless path now. They do the research, they manage the paperwork and manage the process. So, it is what is the intermediary — is it an individual or a platform, and what is the pathway to that?
“[T]he challenges facing all of us, whether you are a financial adviser, a broker, an S&P 500 or a bank, is actually to participate in this conversation so you evolve. And you evolve in a way that is relevant and has utility.
“I don’t think it is a message to take away that these [technological disruptive] things are going to be king-hit. It’s a message of these markets are all going to be disrupted and you have to participate in the conversation and the thinking to evolve appropriately.”
Ms Bruce continued: “All industries, including financial services, will evolve as technology continues to drive change. It is both smart and necessary to be actively working to anticipate these changes.
“No one is immune to the changing landscape and mortgage brokers and advisers have an incredibly important role in this evolution given the valuable service they provide in supporting more than 50 per cent of all Australians seeking a home loan.
“At AMP Bank, we look forward to working closely with our partners to anticipate consumers’ changing expectations and to be best placed to meet them.”