CBA reduces accreditation barrier, updates tiers

In 2018, the big four bank restricted its accreditation policy so that only brokers with two or more years’ experience in broking, and only those that held a Diploma in Finance and Mortgage Broking Management, could write CBA residential loans.

Speaking at the time, the bank had said that the decision came down to the quality of loans written, and that the new benchmarks for mortgage brokers were “designed to lift standards and ensure the bank is working with high-quality brokers who are meeting customers’ home lending needs”.

However, the major bank has now confirmed that it is easing this policy so that brokers with one year of experience can become accredited to write regulated residential loans.

Speaking to The Adviser, CBA’s general manager, third-party banking, Adam Croucher, explained that the decision to reduce the barrier came after identifying that the quality of loans written by brokers had improved since 2018.

“The industry has really changed over the last two or three years. There’s much better oversight and much more governance across the board, which really pleases us for the protection of the industry and for our customers.

“We were able to have a look back in the rearview mirror and see that [back then] we were wanting to increase the quality outcomes and we’ve been able to do that with the brokers we’ve got accredited...

“From everything that the data tells us internally, we know brokers with a year’s experience are able to represent the customer and the brand in a stronger, more meaningful way.”

Mr Croucher said that the bank had been “challenging its third-party strategy” to ensure that it was “fit for purpose for 2021 and beyond”.

“Part of that was around our accreditation process. So, as of Monday, 5 July, we changed our accreditation standards so it is now one year, as opposed to two years.

“We’ve also aligned to a CBA-approved ACL list (which we didn’t have before).”

The head of third-party said the bank would continue to require brokers to hold a minimum of a Diploma in Finance and Mortgage Broking Management and be a current member of either the Mortgage & Finance Association of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA). CBA will also enable brokers who are credit licenced to act as a residential mortgage broker, whether as a direct credit representative or employee of the ACL; director of an ACL; or owner of an ACL.

Brokers will also still be required to undertake an accreditation test and have written at least 20 regulated residential loans (with different lenders).

“We understand that there will be a number of brokers who, over the last two or three years, we haven’t engaged, which is why we put on extra resources and invested further in training our people to help bring those brokers on board.

“The exciting news is we’ve got a lot of brokers already taking it up and we’ve already invested in the sales channel, putting on credit resources to help train those newly accredited brokers, more sales staff to help as they come on board to make sure we set them up for success...

“We have an ongoing e-learning modules for all of our brokers, and we’ll continue to make sure that that’s really relevant for wherever we see gaps in the business, or any area of focus, to provide that ongoing training to make sure we keep challenging and uplifting those standards.”

New tiered system

The move comes as part of an overhaul of CBA’s third-party strategy, which also includes an update to its tiered service model for brokers.

The service model now comprises four tiers: Essential; Essential Plus; Elite; and Platinum.

The tiers are scaled based on a balanced scorecard of "quality outcomes" and application volumes.

The higher the tier, the more relationship management support a broker receives, with the highest tier (Platinum) having access to a relationship manager, a relationship assistant, as well as access to a new dedicated credit coach and an expanded "elite deal desk" to discuss specific deals.

When asked whether higher tiered members would benefit from speedier turnaround times, Mr Croucher replied: "Part of the new offering is really about the extra support that we provide and the relationship manager support, as opposed to one group getting better turnaround times than other groups.

"So, for us, our top tier brokers will have extra credit support and a dedicated relationship manager; that's where we provide the differentiation, as opposed to offering a large amount of brokers, as part of a particular club, having anything specific over anyone.

"We want to mainly focus on good-quality customer outcomes, which is what we haven't been able to deliver with our elongated turnaround times. So, giving better service for any particular broker over the other doesn't sit well with us, which is why - in our renewed strategy - it's all about what else we can offer as part of that proposition; whether it's a dedicated relationship manager, or a desk-bound relationship manager, or our call centre, that's where we are differentiating our proposition," he told The Adviser.

Mr Croucher added that the bank has also been investing in technology and resourcing to improve turnaround times, which the bank says have been sitting at between 1-3 days for the past six weeks (depending on loan complexity).

[Related: Association heads question CBA’s new two-year rule]