Loan Market executive chairman Sam White has commended brokers for adopting digital home loan processes quickly during COVID-19, and said these trends are here to stay.
Speaking to The Adviser’s In Focus podcast, Mr White said the coronavirus pandemic led to the accelerated digitisation of the home loan process and virtual communication.
While the sector was already moving towards these trends, social distancing measures introduced by federal and state governments in Australia necessitated that brokers find solutions overnight.
“That will be the big legacy of COVID-19,” Mr White told The Adviser.
“Some of the trends that we were seeing emerge anyway [were] really being condensed out of necessity,” he said, noting that this was particularly the case in order to “continue to deliver solutions to customers if we could not see them”.
Mr White lauded brokers for quickly adapting to more digitised processes and avenues of communication.
“I think the way brokers have reacted, the way they’ve responded and the way they’ve adapted has been phenomenal, as so many other industries have,” Mr White said.
“But I think brokers are chief amongst them.”
Mr White also commended lenders for moving quickly to adapt to the circumstances. Various lenders have announced changes to verification of identification processes and have allowed virtual communication like video conferencing to meet the social distancing requirements.
“I think this opens up a whole range of opportunities for brokers moving forwards that we may not have seen happen for some time,” he said.
“It’s going to enable lenders to become more efficient, and for brokers to be able to deliver to lenders a more compliant, more seamless process,” Mr White said.
“I think from a customer point of view, from a broker point of view and from a lender point of view, there’s so much upside in getting this right and making this shift. I can’t see that changing.
“What might change is the speed. Look at what’s happened in eight weeks, how much we’ve changed in eight weeks. Play that over the next 52 [weeks] and it’s exciting to see what the potential could be.”
Role of broker in a digitised world
Mr White noted that in the last two or three years, brokers have had to undertake more paperwork for their customers.
However, he said he believes the value of a broker is to be the trusted adviser, and technology and digitisation would enable the broker to spend more time with customers and less time doing paperwork.
“I think that’s the trend that I think will stay because the more time a broker spends with a customer, the more value they’re going to be able to add, and I’ve got no doubt that this trend will change,” Mr White said.
One of the concerns Loan Market has been hearing from brokers is whether digitisation and technology will displace the role of brokers, but Mr White sought to assuage these concerns.
“It will reinforce the position of the broker. It won’t replace the broker. I think it augments the broker,” he said.
Mixed feelings on BID delay
Noting that the Australian Securities and Investments Commission (ASIC) recently announced it would delay the implementation of the best interests duty (BID) from July 2020 to January 2021 in light of the coronavirus pandemic, Mr White said he had mixed feelings about the announcement.
Mr White revealed that Loan Market was due to start a six-week rollout of BID training to prepare for the 1 July implementation date, which it had been busy preparing for.
“It was a very condensed period. The concern we had was we weren’t going to have a lot of time to really educate brokers on the changes that we sought, that we were going to implement,” he said.
“But we were also ready to go. And we were all trained up, ready to roll this out. At the same time, we know how busy brokers had been.”
“So, it was a mixed feeling,” the executive chairman said, but emphasised that the brokerage was still rolling out its training to brokers.
Mr White said the brokerage is aiming to be fully operational on BID by the end of September.
To hear the full In Focus podcast with Sam White, click below.