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Jessica Darnbrough
While new data shows the non-majors’ market share is growing, one aggregation head has claimed a lack of innovation is ultimately stopping the sector from nabbing a greater slice of the pie.
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Speaking at a CEO roundtable hosted by Citibank in Sydney yesterday, Aussie’s James Symond said brokers were and are keen to support the non-majors, but these lenders are simply not offering anything different to the major lenders.
“Brokers want to put business with the non-majors, which is why we are seeing a slight increase in their market share of late,” he said.
“Of course, that increase could be a lot greater if the non-majors were to be a little more innovative with their product and distribution strategy.
“Over the last three of four years, the lenders have just been trying to hold on and ride through the storm. As such, innovation has gone out the window.
“Normally there is money pumped into innovation, but over the last couple of years this hasn’t happened. Since the GFC, the non-majors have focussed on keeping their head above water and their ship on course.
“Five or six years ago, there was innovation everywhere. There was a big drive online and new opportunities in distribution opened up. Today, more of the products are stock standard as they probably should be in this market place.
“That said, if the non-majors are serious about growing their market share they need to differentiate themselves from the big four through innovation in product, distribution and service.”
Vow Financial’s chief executive Tim Brown agreed and said if the non-majors could differentiate themselves from the big banks, they would ultimately reap a lot more business.
“There is a lot of distrust out there towards the majors at the moment. Non-majors can capitalise on this by offering good service and products that are slightly different, and packaged well.”
Over the last couple of months, the non-majors have started to challenge the big banks, growing their market share from 19.6 per cent to 24.3 per cent over the last 12 months, according to AFG.
In addition, the non-majors have also taken the front foot when its comes to the pricing of fixed rates. Just yesterday, Citibank announced it would trim 20 basis points from its five year fixed rate, taking it to 5.59 per cent.
