How customer obsession will drive the next phase of broking

Today’s customers are demanding faster, more personalised service, multi-channel interactions and long-term relationships, with a clear shift away from one-off transactions. They also want to be able to trust people and organisations when it comes to financial services.  

In a service-led industry, strong customer relationships built on trust, have always been critical for broking businesses.  In today’s experience world they are more important than ever. Those businesses that do not put the customer first will struggle for relevance in an increasingly competitive market. 

Customer outcomes have also been a central focus of a number of regulatory reviews of our industry, with ASIC’s 2017[1] review of mortgage broker remuneration which highlighted a number of potential areas of conflict the industry could address, and  the Financial Services Royal Commission that proposed a ‘best interest duty’ for mortgage brokers. 

With the consultation period on draft amendments to the NCCP Act recently completed, the addition of a best interest duty is likely to be a game-changer for the industry. 

The proposed reforms will build on the work already done by the Combined Industry Forum (CIF).

Customers will be able to go to a broker and know they are bound by law to act in their best interests – a change we believe will help to build even greater trust in our industry. 

PLAN Australia is celebrating its 20^th anniversary this year and in that time,  we have seen the broking industry transform significantly from an alternate channel for customers to the primary channels for customers and lenders, driving competition and great customer outcomes. 

We expect the pace of change in the next decade to be even more rapid and there are a number of ways we are helping broking businesses to prepare and continue to deliver even better outcomes for customers. 

A customer-centric business plan 

An essential component of every successful broking business is a sound business plan, which should be reviewed regularly to put the customers at the heart of every decision. 

Throughout the year we encouraged brokers to analyse their customer base, process and team and look for ways to make their businesses as frictionless and customer-centric as possible. 

With the right amount of planning, we believe there are always new ways to enhance the customer experience, whether that is diversifying into new areas of lending to meet a wider range of customer needs, or changing a process to speed up turnaround times for customers. 

Detailed conversations 

Another key hallmark of a customer-obsessed business is the ability to understand your customer, respond to their feedback and anticipate their future needs through meaningful conversations. We believe broker businesses that do this well will be the ones that thrive in the future. 

Recent research by ASIC¹ showed many customers find taking out a home loan a complex and overwhelming experience. Today’s customers need advice that goes beyond just price, with in-depth explanations of how to do an application, what information should be supplied, and why different lenders have different lending criteria and service standards. 

As experts in their field, brokers therefore play an essential role in helping customers to navigate the current lending environment. 

Leveraging the latest innovations and keeping it simple

Technology also has a key role to play in any customer-obsessed business. The CRM is an essential component in any broker’s toolkit, not only helping to remove the friction between broker, lender and customer but also providing opportunities to ‘surprise and delight’ the customer by enabling better communication and longer-term relationships. This means using your CRM to its full functionality, including storing all information about your customers, using the insight and reporting your CRM provides and leveraging customer marketing that delights at the right moments of truth.  

The majority of aggregators offer help with understanding the CRM and getting the most out of it, enabling brokers to spend the maximum amount of time in front of customers providing immeasurable guidance and advice. 

Having an established digital presence is also critical for today’s broking businesses as consumers increasingly want to switch seamlessly between physical and digital channels. Recent research by Accenture² found that the ability to deliver a consistent level of service across all channels is an increasingly important differentiator for financial services providers.  

What does this mean in simple terms? 

We recommend brokers take a close look at their digital presence including social media, websites, digital marketing to see if all of these channels communicate and reinforce the broker’s customer proposition.  If you were a new or existing customer would you be interested in your own digital channel and messages?  

For example, for existing websites, are they mobile-friendly?  Are you using social media to keep clients updated on the latest market information, demonstrating the value you deliver for your customers?  

The next horizon of open banking will also drive further opportunities for the broker industry working with customers. We are very early in this journey in Australia however see this as a game changer.  

Ultimately, to stay competitive businesses need to adopt this customer-obsessed thinking. It requires planning, and effective processes but taking the time and effort to put these in place will ultimately result in happier, more loyal customers and a more sustainable broking business into the future. 

1. ASIC Report 516: REP 516 Review of mortgage broker remuneration
2. 2019 Accenture Global Financial Services Consumer Study

[1] ASIC Report 516