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A mutual bank has begun distributing loans through the third-party channel for the first time.
Mutual lender RACQ (Royal Automobile Club of Queensland) Bank has begun working with brokers for the first time since the bank launched in 2017.
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The Queensland-based bank, which provides home loans, car loans, personal loans, and banking services, has started a pilot with three individual brokers but expects to announce two aggregator partnerships imminently.
Brokers will be serviced by business development manager (BDM) Kevin Seeley, who reports to the bank’s head of third party, Claire Farquhar.
Speaking to The Adviser, RACQ Bank general executive, Michelle Winzer, explained that approximately 69 per cent of home loan borrowers in Queensland choose a broker and that RACQ therefore “recognised that there is a whole lot of people out there that RACQ Bank could be helping, but because [it wasn’t] working with the broker channel, [it wasn’t] actually getting the opportunity to.
“So, we worked hard over this last year to get the change in our strategy and actually expand into the broker channel,” she said.
The bank has reportedly been working on its service offering to prepare for its launch into the broker channel and had improved its turnaround times to seven days for unconditional approval for mortgages and three days for unconditional processing of personal loans.
The mutual bank’s general executive said that the bank would be initially focusing on servicing brokers in its aggregator partner groups, rolling out its home loan products (which include a 40-year term product, its Fair Dinkum Home Loan, and a green home loan product) as well as car loans and personal loans.
The Eight Mile Plain-based lender will be primarily focused on Queensland borrowers but expects that the broker network will also expand the customer base to some interstate borrowers, too.
“I am so proud about the service offering that we have here at RACQ Bank,” Ms Winzer continued.
“We’re really excited to have the opportunity to help people and we know that we’ve got offerings in RACQ Bank that really make a difference to people.”
RACQ Bank’s move into the broker channel comes as a growing number of direct-to-consumer lenders recognise the power and pull of mortgage advisers.
In the past few months, several direct lenders have expanded into third-party distribution, with Mortgage Choice and Athena Home Loans announcing a white label partnership last month and Connective Home Loans (CHL) having partnered with Digital Mortgage Solutions — the technology provider to Nano Home Loans.
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