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There is nothing for brokers to fear about the current fintech surge shading the mortgage landscape, according to a respected industry leader, but this may not always be the case.
This is because mortgage brokers in Australia have in spades the very qualities fintechs lack the most; consumer awareness, trust and scale, said MoneyQuest managing director, Michael Russell.
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By nature, he said, fintechs are disruptive to the status quo.
“Over the past decade, almost all new fintechs have failed,” Mr Russell added.
“Not because of a technology shortcoming, but because of their inability to generate scalable consumer awareness,” he said.
But Mr Russell is quick to warn that fintechs operate on a ‘significantly’ lower cost structure than traditional bank and non-bank mortgage providers – and this is the concern in the longer term.
“With market share at around 52% for all new loans, mortgage brokers must not get complacent.
“Instead, we need to continue to capitalise on our competitive advantage by improving customer experience,” Mr Russell said.
He said right now brokers have an ‘open door’ opportunity to prepare for the fintech onslaught: “Today’s home buyers are discerning and well researched. They are yet to be tempted to act alone in acquiring a mortgage.”
Fintechs, also known as marketplace lenders or peer-to-peer (P2P) lenders, offer mortgage, commercial and personal loans direct to consumers via very sophisticated software.
On the fintech onslaught, Graham Mirabito, chief executive at Australia’s largest data provider CoreLogic, told The Adviser he felt the online market is primed for significant fintech disruption.
He said that while it is still in its infancy in Australia the sector is ‘about to explode’.
Mr Mirabito named Click Loans, an online home loan provider, as being one of the best examples of this new trend in Australia – “just as good, if not better, than Quicken in the US.”
Australian Credit and Finance launched Click Loans last year, inspired by recent disruptors like Uber and Airbnb.
[Related: Disruptive mortgage platforms ‘about to explode’: CoreLogic]
