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With banks tightening some of their lending policies, we expect to see a shift in market share towards non-bank lenders as demand from consumers to fund investments is unlikely to recede in the short term, writes La Trobe Financial vice-president and chief lending officer Cory Bannister.
Interest rates are at an all-time low and some have forecast it will remain so for the next decade, with conditions remaining favourable for consumers looking to borrower. The combination of supply and demand conditions is likely to drive increasing activity towards specialist lenders over the coming years.
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The evolution
We expect both the bank and non-bank sectors to change and evolve significantly over the coming years, particularly with the continuing evolution and advancement of technology which we expect will hit the non-bank industry faster, as non-banks are likely to be more agile in adopting new initiatives as they happen.
It’s an exciting time to be in the industry and the non-bank space in particular.
Opportunities off the back of challenges
The historical challenge for non-banks has been to overcome people’s insistence on using a major bank. However, we are quite confident this is beginning to change and will continue to do so as future generations choose performance over historical allegiance.
Finance brokers will need to diversify and develop their business into more holistic financial service operations. This will help them generate a wider variety of clientele and we believe non-bank lenders are best-placed to provide future generations of brokers with the solutions required to service their customers.
Crucially, for brokers partnering with a non-bank lender, channel conflicts are better managed, and brokers can focus on shifting from mono-line operations to full service operations, helping them grow their business and also retain their clients.
