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ISCOVER
Partnered by Mortgage Choice
With the new best interestsduty coming into being from 1 July 2020, now is the time to prepare and ensure you can make the incoming rules work for you, says Susan Mitchell, Mortgage Choice CEO
Gearing up for a new era
The best interestsduty obligations imposed on the mortgage broking sector will have an enormous effect on how brokers operate.
Over the last few years, brokers could be forgiven for feeling like they have spent more time ticking boxes to please lenders and regulators while they are being squeezed of valuable time with their customers.
There’s no question that it’s taking longer to prepare a loan application than it did a few years ago and –with the deadline to comply with best interestsduty looming –brokers may be understandably worried that it’s only going to take longer.
The challenge facing brokers will be the ability to demonstrate how they have complied with the duty, without drowning in paperwork. In this new era, the role of the aggregator in offering compliance and technological support is more important than ever. At Mortgage Choice, we believe that mortgage brokers should not have to shoulder the compliance burden on their own.
We believe that by providing expertise and access to the right systems and technology, our brokers will not only be equipped to forge confidently into the future but continue to build stronger and more sustainable businesses.
Supporting brokers
At Mortgage Choice, our priority has always been to keep our brokers safe and support them in delivering exceptional customer service. Over the last two years, we have made a significant investment in the technology solutions we offer our network and are well underway in transforming our compliance function.
Since the bill passed both houses in February, we have taken the time to reflect on what it means for our network and what changes we will need to make in order to support our brokers. We are refining our business processes to ensure it is aligned to the legislation and ASIC’s draft guidance. Key to this will be continuous communication and effective feedback loops with our network, which are essential to a successful working relationship.
We have learned that having our brokers actively involved in the design and execution of new systems and practices is critical to success and we are adopting this approach again in preparation for 1 July.
Technology
The Mortgage Choice Broker Platform was a game changer for our network and I am confident that it will allow our network to meet its best interestsduty obligations at scale with minimal effort on their behalf.
We built the Broker Platform from the ground up with an agile methodology to ensure that when there are changes in the environment, we can adapt to meet the needs of our brokers and their customers quickly and effectively.
Since we launched the platform in 2018, we have rolled out a number of enhancements that increase broker productivity and usability. Most recently, the Broker Platform has been enhanced to support brokers and ease the onerous task of collating documentation from customers.
Collecting documentation from customers is easier than ever through our MyHub online customer portal. Customers can safely and securely share their documents with ease via the portal and the documents are directly loaded into the loan scenario in the Broker Platform for the broker to view.
We recognise the importance of offering the latest tools to our network but realise that if these aren’t integrated into our core platform, their true benefit wouldn’t be realised. Broker Platform was specifically designed to interact with best-of-breed third-party applications, which are available to our brokers on an opt-in basis. This means that, regardless of the size of the business, brokers can access a range of tools that will allow them to streamline the loan packaging process, whilst meeting their compliance obligations.
Solutions that allow brokers to collect their customers’ bank statements, electronic signatures and consumer credit reports will be available through the Broker Platform and will be even more relevant from 1 July 2020.
Compliance
Aggregators need to have a clear purpose when it comes to compliance in order to drive greater transparency.
Compliance has always been a key pillar of our business offering and we are currently undergoing a comprehensive assessment of our compliance function to ensure that we are prepared to support our network for best interestsduty. We are focused on network engagement and communication to ensure that our brokers are on the journey with us each step of the way.
The role of aggregators in helping mortgage brokers manage their risk will be crucial going forward. Compliance works hand in hand with technology to provide the oversight to maintain a high level of customer satisfaction while, at the same time, ensuring brokers and their businesses are protected.
Not only has Broker Platform dramatically improved the productivity of our network, it also acts as a robust platform to absorb the rapid changes that occur from a regulatory standpoint. The platform already provides many of the features required for a broker to suggest the right solution to their customers and also has safeguards in place to ensure that brokers are easily able to store all the documentation required in making the brokers’ assessment.
Ultimately, when it comes to meeting best interestsduty obligations, our objective is to deliver a seamless experience whilst never losing sight of the duty’s purpose, putting customers first. We are enhancing our approach to risk and controls. As an aggregator, compliance cannot just be about checking boxes, the bar has lifted. It is about using data to identify trends and insights. We’ve started using the systems and technology we have in a more sophisticated way, in order to drill down and look for patterns, flag behaviours and proactively coach and guide our network in best practice. This deeper level of understanding makes the organisation as a whole, stronger together.
Light at the end of the tunnel
We see best interestsduty as a great opportunity for the industry to positively differentiate itself.
The reality is, only brokers have to comply with this new framework, which means that we are in a unique position to be able to demonstrate to Australians that we are finance professionals who can deliver the right solutions for their needs.
The latest broker market share figures from the MFAA revealed that broker market share was 55.3 per cent in the December quarter 2019. This is our opportunity to build on the trust consumers already have in the service we provide and increase market share. Now that the bar has been raised for our industry, and it’s not simply about selecting a product that is not unsuitable for the customer, we need to seize the opportunity to show consumers we have a deep understanding of their financial needs and that we are able to provide recommendations to them based on our expertise.
Of course, as brokers we have always offered customers choice but what will raise the profile of the industry, in this new era, is legislation to formalise the process.
At Mortgage Choice, our priority in the lead-up to the 1 July deadline is ensuring our brokers can provide an enhanced customer experience.
At the end of the day, our desire is that customers walk away from interactions with their broker with a heightened level of confidence from the enhanced transparency that will come from best interestsduty.
