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Jessica Darnbrough
Australia’s non-bank lenders are critical to the ongoing success of the third party distribution channel as competition amongst lenders continues to dwindle.
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Speaking at a non-bank luncheon in Sydney last week, Provident Capital’s managing director Michael O’Sullivan said non-banks inject much needed competition into the mortgage market and without them, the broker proposition would not be as strong.
“Non-banks play a critical role in this industry. We are critical to competition, but we are also critical to the ongoing success of the broker channel. We were the first ones to truly support the channel and we need to show brokers that we continue to actively support them today,” he said.
But while it is clear that Australia’s non-banks play an integral part in the industry, their share of the mortgage market is dwindling.
According to data from the Australian Bureau of Statistics, non-banks have just 2 per cent share of the mortgage market – significantly down on the 10 per cent plus recorded in the heydays before the GFC.
But while non-banks are down, National Mortgage Company’s chief executive Angelo Malizis said they are certainly not out of the game.
According to Mr Malizis, non-banks have the potential to grow their market share once more if they can successfully highlight to the broker market their point of differentiation.
“Non-banks always talk about service – but what is that?” he said.
“We need to show brokers exactly what our service proposition is, so that they feel comfortable sending us business. We cannot compete on price with the majors all of the time, but we can certainly beat them on service.
“To do so however, it is critical for us to define what service means. Customers are fickle. Customers are chasing rate, so we need to really push the service proposition. We need to show them that they can have deals approved within 48 hours and their customers can receive the best post settlement service there is.”
