Market ‘noise’ pushes non-major to strengthen communication

He said that lenders’ obligation to grow balance sheets in a measured fashion has seen more lenders in the space.

He added: "What that does is it creates a lot of noise in the front-end distribution, which in our space is the brokers. The brokers have so much information about offers that it must be very, very difficult ... for them to distil that and then to go that one step further and communicate that effectively to the customer.

“To get the cut through that we require ... means that I'm relying very much on my team being very clear with their broker relationships in the communication. That's probably the most challenging aspect.”

However, he added that he was comfortable with the clarity of policy at Auswide Bank.

“I'm very comfortable that a large percentage of brokers that use us understand what works for us and what we're actually looking for. I'm not actually seeing a lot of incoming loans that are problematic from a policy or appetite perspective.”

Industry noise could also be affecting consumers, he said, noting that a “large group” of young adult and upgrader customers are “still paying a premium for their finance” because they haven’t considered switching lenders.

Borrowers put in a lot of thought at the moment of transaction, he observed, but “by nature of how busy we all are, once we lock that in then we put up some barriers in terms of saying, 'Okay, well we want to be comfortable where we're at [so] we'll put up some barriers ... [to stop] other information coming in'”.

He concluded: “I think that's just the way that people react and this takes some time and strong messaging to eventually get through those barriers and give people a reason and a rationale to activate and become active in terms of looking for an alternative.”

[Related: ‘Overwhelming shift’ in consumers wanting alternatives: Homeloans]