ING looks to brokers to help it take share

The non-major bank is currently the seventh-largest mortgage lender in Australia, behind Bendigo and Adelaide Bank, Macquarie Bank, ANZ, NAB, Westpac, and the Commonwealth Bank of Australia.

It had a total loan book of around $60.5 billion at the end of July 2024 (according to figures provided to the prudential regulator), with $50.2 billion of this being for owner-occupiers.

However, Bendigo’s book is only marginally larger than ING’s, mainly due to it having a larger investor book. ING is now looking to close this gap, with ING Australia’s head of mortgages George Thompson recently telling The Adviser that it will be looking to “ultimately expand into different segments and service more needs of more clients, particularly in the investor space and self-employed” over the next year.

Melanie Evans, ING Australia CEO, said that brokers have been a key part of its success since it launched into the market 25 years ago, telling The Adviser that they will continue to form the backbone of its lending growth.

Evans said: “As we look forward to the next 25, we’re clear that mortgage brokers will continue to be crucial to ING’s success.

“Not surprisingly, we’re committed to investing in technology and data to make it even easier for brokers, and their customers, to do business with us. Brokers make things simple and easy for customers, while offering choice.

“We know that’s even more important in the current cost of living environment and it is why ING recognise the important role brokers continue to play in the industry.”

The ING Australia CEO flagged to The Adviser that multiple industry reviews and reports had shown the valuable role brokers play in making the mortgage market more competitive.

“We are supporters of competition at ING because of the clear customer benefits – after all a mortgage is one of the most significant financial commitments Australians can make,” she said.

According to the July edition of the Broker Pulse: Residential Lending Survey, broker usage has been increasing at the non-major bank recently.

On a six-month moving average, 26 per cent of broker respondents submitted mortgage applications to ING – the highest level in a 12-month period.

Nearly three-quarters of brokers said they used ING because of their interest rates, three times higher than any other reason (for example, client circumstances and client preference). Indeed, pricing is becoming increasingly important for brokers when recommending lenders to their clients.

ING is particularly well rated by brokers for its turnaround times (around three days) and for having a team that is “good at sorting things out”.

One broker respondent told Broker Pulse that ING was “fast and easy”, but added that its assessment team was “a bit hit and miss”.

ING Australia said it continually engages with brokers to provide feedback on how it can “help shape a smoother and more efficient home loan application journey, ensuring [ING can] continue to support [their] business effectively.”

Speaking to The Adviser at its recent non-major bank roundtable, Thompson said: “ING was one of Australia’s first fintechs. We came out here 25 years ago to disrupt savings in Australia, and bring it online. While our business and product offering has evolved, we’ve remained an online business and so it makes sense that brokers have, and always will be, front and centre of our mortgage strategy.

“Today over 90 per cent of the deals originate through the channel. We’re working hard to automate processes further so that we do even more volumes with brokers well into the future.”

While ING is working to ramp up its broker strategy, other lenders have been focusing on growing their direct channel lending. The Commonwealth Bank of Australia (CBA) recently released its full-year results for the financial year ending June 2024, revealing that the major bank continues to grow its proprietary home loan mix.

While nearly three-quarters of borrowers use a mortgage broker to access home loans, the major bank has continued to buck market trends by pushing business through its direct channels and launching new digital home loan offerings online only (a move met with frustration by the broker channel).

In its FY24 results, the major bank revealed that it had grown the group’s mortgage book by $12 billion between June 2023 and June 2024 (up 2 per cent), but that this was partly due to “strong growth” in its proprietary channel and its new digital-only offerings.

Indeed, the FY24 results showed that the proprietary channel is writing two-thirds of its new mortgage flows as broker flows continue to shrink.

Its CEO Matt Comyn has also angered the broker channel recently by suggesting that broker remuneration may be riskier than banker remuneration.

He said: “To make the comparison – and I’m certainly not alleging that this is a problem per se in the mortgage broking industry – we have 1,800 home lenders, and there are approximately 20,000 mortgage brokers.

“Since 1995 mortgage brokers have grown very successfully to become about 72 per cent of mortgage origination. There is, as a matter of fact, no balanced scorecard. There is no fixed pay. They are entirely remunerated based on the number of loans they sell. I’m sure this has been extensively reviewed. They have their own regulatory obligations and things that have come in from a best-interest duty perspective...

“We are talking about a few hundred lenders versus the 20,000 mortgage brokers that don’t have any of the controls that we’re talking about in this regard. So I certainly acknowledge these concerns, but they must, at the same point, be dwarfed by concerns in other aspects of the industry.”

To find out more about the Broker Pulse survey and participate in future surveys, visit the Broker Pulse survey website.

[Related: Non-major bank roundtable: HOW THE CHALLENGERS ARE CHANGING]