A recent report has revealed that a vast majority of lenders expect to see more mortgages written via online and mobile devices over the next five years.
While only half of lenders surveyed in the 2013 Genworth Home Grown Report believe the number of mortgages written by brokers will grow, 90 per cent predict the number of loans written via the online channel will grow over the next five years.
Seventy-four per cent of lenders also believe mortgages sold via mobile devices will increase but were less optimistic about the growth in loans written by mobile lenders, with only 43 per cent of lenders tipping this channel to grow its volumes. Interestingly, only 10 per cent of lenders and eight per cent of brokers believe branches will see any growth.
But while only a slight majority of lenders (52 per cent) believe brokers will grow their volumes in the next five years, brokers on the other hand proved to be an optimistic bunch, with 86 per cent backing themselves as growing their market share.
Speaking with The Adviser, head of third party distribution at ING Direct Mark Woolnough said it was up to the broker to remain relevant as the online channel grew in popularity.
“Broker market share will be determined by the value that customers see in the broker proposition,” he said.
“As we’re starting to see more of the customers looking for a holistic relationship with their broker, you’ll find that brokers can continue to grow their businesses across multiple products.”
While online channels such as UBank have had some success in Australia, they mainly compete on price rather than on service.
According to founder and director at Connective Glenn Lees, it’s this weakness that brokers are exploiting. “This year we've moved our systems from being a tool used between broker and aggregator to one that is used between the broker and the customer,” he said
“It’s really about appealing to what the consumer is looking for, and attracting them through the channel that best suits them.”
While half of lenders feel the broker channel will shrink or remain as it is, NAB’s executive general manager, growth partnerships, Anthony Waldron claimed that brokers would flourish in coming years.
“We think it’s going to continue to grow, we think customers are going to continue to go to mortgage brokers and it will not be long before it’s 50 per cent of the market,” he said.