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86 400 launches direct offering

by Annie Kane13 minute read
86 400 launches direct offering

The neobank has launched its inaugural direct-to-consumer offering, making its Neat and Own home loans available to consumers via their phone, tablet or computer, as well as via brokers.

In its first major move after being acquired by NAB (for its direct-to-consumer brand UBank), the digital lender has announced that it is making its digital mortgage product available to borrowers directly, as of today (1 June).

The fintech lender, which has been offering its mortgage product exclusively via the broker channel since November 2019, is today enabling customers to apply to refinance to its Neat or Own home loan direct from their smartphone, tablet or desktop. A direct offering for new purchases is expected in due course.

While the lender is branching into the direct channel for the first time, it said that mortgage brokers will “continue to be [its] primary channel”.


Noting the success of its broker offering, the digital lender highlighted that direct borrowers could now access “one of the fastest and fully automated digital application forms” via its new direct digital offering, which electronically pulls verified income and expenses information, automated valuations (powered by CoreLogic) and auto populates loan documentation for existing 86 400 customers.

According to the lender, the process could take 15 minutes, with approvals in a few hours.

Speaking of the move, Robert Bell, CEO of 86 400, commented: “I’m incredibly proud of the work the team has done over the last few years to simplify and streamline what is often a stressful and time-consuming process. 

“Following such a great response from the broker community, and with $600 million in loans now settled or awaiting settlement, we wanted to create a smart approach to home loans for those that prefer to apply direct.”

He added: “While mortgage brokers will continue to be our primary channel, particularly providing expertise to help the customers through more unique and complex situations, launching a direct-to-consumer channel is our next stage of growth as we continue to live out our mission of helping all Australians take control of their money.”

The digital lender has said that it aims to be working with every major aggregator across the country by the end of 2022.

Direct offering best for 'vanilla' deals

Similarly, Melissa Christy, lending product lead at 86 400, stated: “By streamlining the traditional process of applying direct, we’ve created a smarter, simpler, digital alternative, which our pilot customers have loved. 

“Our fast applications and approvals promise to put more Australians on the financial fast track to property ownership or a better rate on their existing mortgage.” 

Speaking to The Adviser, she continued: "Our proposition is the same for broker and direct. That 'fastest time to yes' is one of the core parts of our proposition. Our strategy doesn't change because we've got another channel. it just means we can help customers through different channels and they can choose the channel that suits them. Both direct and broker deals will still go into the same queue and the assessment team will pick them up as they come in, so there is no difference between broker or direct.

"We think direct appeals to those really vanilla, simple deals - perhaps where customers have refinanced before and are comfortable with what's involved and think they want to just apply online and do it that way. This caters for those deals where there's one security property, a maximum of two splits (variable and fixed), and very simple vanilla deals.

"But we also have a team of lending specialists who they can call or they can message and talk to if they need it, and if their preference is to go speak to a broker, then we'd recommend the broker in their area."

She concluded: "We went to the broker channel first [with our home loans] because we thought that was our bigger market and we still think that. We offer faster turnaround times and a fully digital experience, no supporting docs etc. and we think everyone can benefit from that, both in a broker and customer experience.

"We want to keep growing broker. Brokers are very important to us. We know that brokers can help customers where their scenario is a bit unusual or more complicated. And we understand that a broker is the best person to work out which lender is most appropriate for that customer," she told The Adviser.

The move to offer direct-to-consumer mortgages comes after the neobank was officially acquired by NAB earlier this month. After the Federal Court approved the acquisition on 12 May 2021, and implementation officially occurred on 19 May.

While NAB has said that 86 400 and UBank will continue to operate as separate businesses in the short term (with no immediate changes expected for customers of either business), the neobank has now begun expanding its reach to more people as it takes its approach to banking mainstream.

Speaking to The Adviser earlier this year, Mr Bell said that brokers would continue to be “a big focus” for the neobank, including when it subsumes under the UBank brand.

Mr Bell said: “The future for us will continue to be a big focus on mortgage brokers. One of the things that is attractive to UBank about 86 400 is that we’ve built the technology and we’ve demonstrated what can be done in the broker channel.

“So, this actually means that, eventually, this will be a new distribution channel for UBank, which will sit alongside their direct piece. 

“We’re not pulling away at all from brokers in this move. In fact, what we’re actually doing is accelerating through brokers,” he said at the time.

The CEO concluded by saying that both direct and third-party offerings could operate “side by side” and that the group would “always make sure that brokers get access to the same rates as direct customers”. 

The digital lender is the second broker-only mortgage player to target the direct channel in recent weeks, with major brokerage Aussie having launched its first online direct-to-consumer digital lending product, run in partnership with Tic:Toc, in April.

The first product under the offering, Aussie Edge, is funded by Bendigo and Adelaide Bank (which has a 28 per cent stake in the fintech) and targets “digitally savvy” purchasers, refinancers, owner-occupiers and investors; with fixed rate, variable rate and an optional offset account.

As such, consumers can now access Aussie both via broker and direct.

[Related: 86 400 confirms broker commitment]


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