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Brokers have backed an association’s call for more competition in the market even though there’s division on whether or not it would benefit their businesses.
The Customer Owned Banking Association told the federal government’s Competition Policy Review that there needs to be more competition in the banking sector because the majors have an unfair advantage.
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Loan Market Sydney CBD broker Charles Pillay said greater competition would lead to more innovation, better credit policies and lower rates.
“Price I don’t think is the biggest issue; it’s being able to compete across a range of different areas to provide the best possible options for people,” he told The Adviser.
Mr Pillay said an increase in consumer satisfaction could help the third-party channel because happier customers were more likely to be repeat customers.
Big & Little Home Loans owner Warren Prince also thought borrowers deserved more competition.
He called for the non-banking sector to be given better access to securitisation so they could have a greater pool of funds with which to develop products.
However, he said brokers would be unlikely to benefit from greater competition because it probably wouldn’t increase the number of loans being written.
Murray Brede from The Loans Café said he had positive feelings towards the big banks, but felt it would be good to see more non-majors because they tended to be more supportive of brokers.
He said that more competition would lead to more product choice for borrowers – although it would also mean more work for brokers to stay across all the new products.
No Fuss Mortgage director Laurie Gardner was one broker who was happy with the level of competition in the marketplace, which he said had always been very high.
Mr Gardner told The Adviser that customers were well-served by the level of innovation, the range of products and the pricing on offer.
[Related: Competition forcing banks to cut rates]
