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Jessica Darnbrough
Australia's lenders have dismissed concerns that the online space poses a threat to the ongoing success of the third party distribution channel.
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According to Genworth’s Home Grown: Mortgage Industry Perspectives report, just seven per cent of the lenders surveyed believe the online channel will hurt the broker network.
Brokers however, were more concerned about the threat that online poses to their business over the next 12 months, with 33 per cent of brokers saying the third party channel would suffer as a result of online growth.
In the report, one lender noted that although online channels are increasingly being used to search for information, other stages of the borrowing process are yet to be assimilated into the online channel.
While an increasing online presence is consistent with changing consumer behaviour, many lenders argued that offline channels, specifically those that offer face-to-face communication, are preferred by consumers during the buying stage.
“One lender highlighted the fact that consumers often visit an online channel, such as a website, numerous times and often partially complete an application before making further enquiries at the branch. As mortgages are a complex product, this suggests that although online channels offer a vast amount of information and convenience, consumers may seek face-to-face communication through more personalised channels to ensure they are not basing their decision on incomplete or incorrect knowledge,” the report said.
These comments are in stark contrast to mortgage broker Darren Moffatt's claims, who believes the online space poses a very big threat to the third party distribution channel.
Earlier this week, Mr Moffatt said the market share of bank online proprietary channels could rise as high as 25 per cent within the next few years.
“There’s a perfect storm approaching for brokers, and not many people are ready,” Mr Moffatt said.
“The internet has already disrupted lots of industries, and it’s now coming to the mortgage industry. You only have to look at newspapers and music to see what happens to those who are unprepared.
“To predict the future, smart business people watch capital flows, and right now the banks are investing huge dollars in direct, online channels. Just look at the success of UBank – there wouldn’t be a broker in the country who hasn’t lost a deal to them at some point.”
