Brokers who have not lodged a loan with CBA recently are set to be disaccredited by the major bank, as it moves to prioritise relationships with established broker partners.
The Commonwealth Bank of Australia (CBA) is moving to disaccredit inactive brokers, as it focuses its broker relationships with established broker partners/frequent CBA loan writers.
On Thursday (18 June), the major bank wrote a note to brokers saying it would be moving to remove broker accreditations for those who have been "inactive" for 12 months (not lodged a loan with CBA), or had broken the broker code of conduct.
It is believed that the move – which will take effect from Friday (19 June) – could impact thousands of brokers.
Indeed, while the major bank has frequently conducted disaccreditations, it is believed that it has not conducted such a widespread move in years.
The decision comes as it moves to concentrate broker relationships on existing broker supporters/those who ‘know’ CBA policy and provide them with a better service by prioritising spending to this cohort.
The disaccreditation will be a blow to many brokers who utilise CBA’s tools, such as its valuation tool or support tools, but who do not send business to the major bank.
The cull comes 12 months after CBA adjusted its broker tiers, which are scaled based on a balanced scorecard and include “quality outcomes” and application volumes. The higher the tier, the more relationship management support a broker receives (for example, brokers on the highest tiers have access to relationship managers, relationship assistants, and dedicated credit coaches to quickly discuss and lodge deals).
In a statement provided to The Adviser, CBA's general manager third-party banking, Baber Zaka, commented: “Brokers play a critical role in helping Australians achieve property ownership. As the third-party channel grows, we are focused on deepening relationships with those who actively work with us to deliver a consistent, high-quality experience for customers.
"We regularly review broker accreditation as part of our governance and quality assurance, to ensure brokers are up to date with our products, policies and processes. This supports broker capability, smoother applications, more consistent service, and better customer outcomes.
"We are continuing to invest in the broker experience, including through enhancements to CommBroker and targeted support for Platinum brokers," he continued.
"For Platinum brokers, this includes increased credit assessment support, one-day service level agreements and fully assessed pre-approvals, alongside continued investment in our relationship managers and operations teams."
Falling broker market share at CBA
CBA’s volume of broker business has been falling in recent years, as it increasingly sees its mortgage volumes come from its proprietary channel. Just a third of its overall mortgage flows now come from the third-party channel.
Indeed, the bank is increasingly focusing spending on its digital and AI tools and recently hired its first AI scientist.
Other major banks have also recently moved to prioritise a smaller cohort of brokers, with National Australia Bank (NAB) having recently said it was moving to a “targeted” approach by “deepening relationships with valued brokers to drive growth in priority segments”.
While details of this new broker strategy have not yet been disclosed, when asked by The Adviser earlier this year why NAB was moving to a “targeted” broker strategy, the NAB CEO said: “What we want to do is to focus on a smaller cohort of brokers that we have good relationships with, that we can, essentially, more effectively service.
“We’ll be focusing on those brokers where we believe that we’ll get flows that are closer to our appetite in terms of above-cost-of-capital lending. We really don’t want to be doing business where the returns are below our cost of capital. So that’s where we’re pulling away from, slowly and purposefully.”
The NAB CEO said the bank wanted to be “the partner of choice for target brokers”.
[Related: CBA proprietary home lending hits two-third mark]
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