Aggregator profile: FAST

As a major aggregator, FAST has been ahead of the pack in its support for brokers writing SME finance. What’s your latest offering for brokers in this space?

Last year we launched FAST Xpress, a new product funded by Westpac. This is the first white-label asset finance product available to mortgage brokers and backed by a major bank. I think that's a significant milestone. We have also invested heavily in Podium and specifically around continuing the journey beyond mortgages. We will soon launch simple small business funding and asset finance by Podium to lenders just like they do with home loans.

Is it true that over 60 per cent of FAST brokers now write some form of non-residential loan?

Absolutely. We're proudly a market leader in this space but we're also proud of the fact that our competitors are hopping into this opportunity as well. I think it's a really good thing for the industry and for brokers. This is an opportunity that's not new, but we've created awareness and the industry is picking up on it. It's good for broker clients and particularly the small-to-medium enterprise clients who have felt the strain of the economy. They now have a genuine robust opportunity to finally get access to finance through all sorts of lenders using a finance broker — that's a really good outcome. We're proud of having led that.

Banks have traditionally been keen to hold onto their proprietary business banking channels. Are they increasingly opening their SME finance offerings to third-party channels?

They are. It has come out of everything that has happened with mortgages through third party and that continues to grow. There's even greater momentum for small-to-medium enterprise. The SME clients want options for funding their businesses but they often need access to someone that can give them advice. Brokers provide a genuine alternative. The banks are loving that. They all want to be number one in SME [finance]. An SME is looking for support; a broker that can deliver on that.

The interesting thing is that it's more than just the mortgage brokers wanting to get into the business lending space. Sure, there is an opportunity for the mortgage brokers who want to do it. But there is also a solid commercial broking market that's been around for a long time, 30 or 40 years. What they're doing now is meeting home loan needs.

The other thing that's playing out is the traditional asset finance — brokers are acknowledging this and moving into commercial lending and home loans. You're going to see consolidation, particularly in the asset finance broking industry. That's already starting to play out.

We’ve also seen the emergence of alternative lenders. Online, non-bank players that offer business finance through brokers. What do they offer?

Those funders offer short-term cash flow funding needs, which is a genuine need. A good finance broker can embrace that as an opportunity for a customer who is a small business client, having a broader conversation and understanding their client strategy. That conversation can then progress towards what the SME client’s funding needs are for their long-term goals. That might be where more traditional finance comes into play. There's a great opportunity for brokers and banks who can get in there and really understand what small businesses are trying to achieve in the short and the long term.

We are also seeing online brokers entering the market. Platforms that offer a digital solution. Some brokers may see this as a threat. What are your thoughts?

It's an opportunity that creates competition. It's disruption in a positive way because it forces the incumbent players to think: “What is my value proposition to these markets and how will I execute it in the long term?” By having these businesses mixing it up a little bit, it focuses incumbents — and FAST is one of those — on thinking about how we do business. We embrace and applaud that type of innovation and disruption. I think it's a good thing. We are aware that this is going to continue. We don't want to talk about politics but the US election is an example of how things can play out that people don't necessarily expect. You need to be in a position to adapt and survive through those types of things. That's just the environment we will always operate in. It will always be complex and ambiguous and that's a good thing.

How important is the role of an aggregator when communicating industry news, such as ASIC’s review into broker commissions, to their brokers?

The aggregators are critical when it comes to keeping the broker informed about what's going on. In terms of the ASIC review, it just acknowledges the maturity and the impact in a positive way that this industry has had, and to reflect on whether the consumer is getting an appropriate outcome. The industry has created competition. It has created an opportunity for all lenders to get access to consumers and business owners to deliver to their needs. If we didn't have the broking industry that we have in Australia, it would be a real battle, for example, for consumers to get access to us. The responsibility for aggregators is to participate and share the insights on a regular basis with brokers and keep them informed.