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For only the second time on record, a larger proportion of brokers used the major banks compared to non-major banks in July as the latter’s popularity tumbled, new data has revealed.
The latest monthly Broker Pulse survey from Momentum Media found that in July 2022, 80 per cent of broker respondents chose to recommend a major bank to their clients, up from 70 per cent in June.
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At the same time, the proportion of brokers using non-major banks fell from 88 per cent in June to 77 per cent in July.
This represents only the second time since the inception of Broker Pulse surveys in September 2019 that the major banks attracted a larger share of broker flows than non-major banks (the first time was in May 2020 when 81 per cent of brokers used major banks and 80 per cent used non-major banks).
The survey of 249 brokers conducted between 1 and 15 August to gauge broker experiences when submitting applications with lenders throughout the month of July also showed that all four major banks ranked in the top five among lenders most commonly used by brokers.
ANZ dethroned the Commonwealth Bank of Australia (CBA) to clinch the top spot as the proportion of brokers using it jumped from 32 per cent in June to 46 per cent in July.
CBA ranked second, with 40 per cent of brokers submitting applications with the lender in July, while Westpac ranked fourth with 27 per cent of broker respondents submitting applications with it (up from 24 per cent in June).
NAB climbed from seventh spot to fifth and rounded out the top five positions after it received 25 per cent of brokers’ applications in July, up marginally from 24 per cent in June.
Commenting on the trends, Momentum Intelligence director Michael Johnson said: “The big four major banks are fighting hard to grab market share at the moment.
“In particular, now that ANZ’s turnaround times are more in line with the rest of the market, many brokers have started to work with them again.”
The growth in the usage of major banks by brokers mirrored the results of the 2022 Third-Party Lending Report, which found that there was an uptick in scores across all the major banks.
While scores and satisfaction in the big four had been plunging in 2021, the 2022 report painted a different picture.
This could perhaps be attributed to the major banks’ focus on enhancing the third-party channel experiences in the last 12 months, including rapid digitisation plans to improve their mortgage proposition and speed up their turnaround times.
The only non-major bank that was ranked in the top five was Macquarie Bank (at number three), but the proportion of brokers using it fell from 34 per cent in June to 31 per cent in July.
Client circumstances drive brokers to big four
The primary reason brokers used the major banks in July was client circumstances, with more brokers being spurred by this compared to June (up from 63 per cent to 66 per cent).
Brokers continued to prioritise the price of bank loans after the Reserve Bank of Australia (RBA) hit Australian borrowers with a fourth consecutive rate hike in August (now at 1.85 per cent), and the major banks subsequently announced they would pass on the rate hikes.
A larger proportion of brokers cited product pricing as a driver to use major banks (up from 41 per cent in June to 44 per cent in July).
Three-quarters of broker respondents cited product pricing as their primary reason for using non-major banks in July (up slightly from 73 per cent in June).
More brokers choose non-majors for turnarounds
There was a sharp rise in the proportion of brokers citing turnaround times as a primary reason for using non-major banks (up from 38 per cent in June to 47 per cent in July).
On the other hand, turnaround times were less of a concern when using the major banks, with only 27 per cent of brokers citing this as a reason, compared to 33 per cent in June.
This has followed stabilisation in the initial time taken to reach credit decisions across most of the major banks, with CBA and NAB taking three and four business days respectively in July to reach a decision.
While ANZ’s turnaround times have improved in the recent past after blowing out to 27 days in July 2020 and remaining in double digits until April 2022, it is still at seven days, the Broker Pulse data showed.
Conversely, slower turnaround times continued to be a hindrance for Westpac, increasing to 12 days in July, and double the number of days taken to reach a decision in May (six days).
To find out more about the Broker Pulse survey and participate in future surveys, visit the Broker Pulse survey website.
[Related: Large bank turnarounds fastest on record: Broker Pulse]
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