‘Give us a chance’: ANZ group head of retail asks brokers

ANZ has publicly acknowledged its turnaround shortcomings on several occasions and has introduced changes to its assessment process to address ongoing lags, which have included the onboarding and relocation of staff, and recently overhauled its third-party leadership team.

Speaking to The Adviser about the changes, Mr Hand suggested that the bank had been able to make inroads in reducing its turnarounds by “streamlining policies”, changing the way that it reviews documents, digitising certain documents, automating processes, and adding capacity to the system. 

He acknowledged that while many of the changes were made some time ago, they have only just begun to bear fruit. 

“We are a pretty manual shop – as many banks were – and I think that from a technology point of view, we were behind the other banks in digitising the documents that come in. The problem is when you don’t digitise the documents, it’s hard to [show] that you reviewed, understood and validated that document. So, often, the next person in the process that might pick up the deal would end up redoing a piece of work that was done earlier because the system wasn’t able to validate that that document had been validated. So some of the work we’ve done around automating has been around effectively digitising documents, improving workflow so [the] documents flow through to the next part of the process more quickly and more effectively, but also improving the requirements, reducing the requirements,” Mr Hand said.

Touching on the increase in credit assessment staff, Mr Hand continued: “It sounds simple to add people to the assessment process, but in reality, if you’ve got to hire someone that’s not from that background (and all the banks have been out hiring so you can’t just pinch from other banks) you have to go and train people to do these jobs.

“To teach them to do a loan takes time, to understand our systems. Then you’ve got to get them doing simple deals and… do[ing] a decent number of simple deals to be able to get themselves to get a level of competence and then you have to accelerate them through the more complex deals.

“At the moment, we’re finding that we’ve actually got capacity for simple deals, so we’ve got some more people that we’re training up to move into the more complex space.

“We’ve made significant progress in that space. If you talk to the broker community, they’ll be able to tell you the numbers and the sorts of turnaround times that they see from us now are significantly improved from where they were. 

“I was looking at last night’s numbers and it was sub-three [business] days for simple deals from brokers, and it’s down around eight days for the complex deals.”

ANZ’s group executive for Australia retail and corporate banking told The Adviser that the bank had been reviewing its broker processes as a whole to “get much more automated and improve [its] capacity so that we don’t face those issues again”. 

“So, we’re confident that this time, we’re not only fixing the system, but we’re doing it in a much more sustainable way than we’ve done in the past. Because it’s not just about fixing the problem we’ve got, it’s about building for the future so that the capacity we’re building far exceeds what we think we need to grow like the rest of our peers have grown,” Mr Hand said.

“We’re coping very well, our backlogs are down to under two days worth of work and [as of] yesterday, there is not a single customer in our system that’s over 14 days in system. 

“I think that shows how we’re getting on top of the problem.”

When asked what he would say to brokers who feel hesitant to send clients to ANZ given its recent performance, Mr Hand responded: “Firstly, we’re doing more than just trying to fix our turnaround times. We’re simplifying our offering. We will have specials in the market from time to time, which will be good offerings for their customers.

“But, I would just say that we’re not claiming that the job’s done. We’re saying that we’ve made good progress. We’ve got more work to do. We’ve heard the messages and we will continue to fix our processes and be firmly in market in a sustainable way. 

“So I would just say [to brokers]: ‘Give us a chance, try us, and let our actions speak for it.’ Don’t just take our promises that we make as certainty, test us out and see if we can maintain those turnaround times.”

Background to ANZ’s turnaround issue

The big four bank has been suffering from extended delays for mortgages submitted through the third-party channel ever since the COVID-19 pandemic hit in 2020, with the CEO Shayne Elliott having previously suggested that blowouts impacting the channel were a symptom of the combining forces of COVID-19, responsible lending checks, and strong flows.

Indeed, according to Momentum Intelligence’s monthly survey of brokers, Broker Pulse, the major bank reached a peak of 26 business days to reach an initial credit decision in June 2020 (on average), and has been consistently been among the slowest lenders to turn broker loans around ever since.

Some media reports had highlighted cases where borrowers were waiting nearly two months for loans to be approved, and brokers had been experiencing long backlogs in processing files that were in the pipeline, too.

The delays have been impacting the major bank’s broker flows and profitability. Broker flows made up less than half of its mortgage flows in 1H20, but recovered to 57 per cent in 1H21 before closing the year at 56 per cent. 

Figures released at the group’s annual general meeting in December revealed that home loans dropped by $3 billion to $278 billion in the second half of the financial year.

Recent data released by APRA also noted that ANZ’s owner-occupied home loan book slipped $200 million between November and December – the only loss in owner-occupied loans reported by a major bank over this period.

[Related: Major bank appoints new GM of broker]