What innovation could the mortgage market most benefit from?

The need to create and innovate has been of paramount importance as the mortgage market continues to boom, making brokers busier than ever. While the partners of our Broker’s Guide to Innovation have been dedicated to helping provide innovative tools, products and tech to brokers already – we wanted to know what else they think could help shake up the mortgage market.

Here’s what they had to say...

More insurance protection

“Not surprisingly, the innovation I would like to see is that all mortgage brokers embrace the opportunity to discuss life event risk and financial protection. Brokers will recall with great delight the life impact they had on a client when they arranged the finance for their client’s first home or upgrade to a family home… so [it’s] bewildering that the same brokers do not take the opportunity to protect that lifestyle. An independent survey recently found that 98 per cent of ALI customers thought it was reasonable that their broker discussed life risks and offered My Protection Plan to them.” - Huy Truong, chief executive, ALI Group

Anything that gets finance out faster

“In today’s market, any innovation that gets customers access to finance faster is king. But if we zoom out from the here and now, the biggest innovation in the mortgage market is already happening. The vast amount of data our major banking institutions have on each and every one of us will start to be used to create more and more tailored financial products with lightning fast approval times. 

“The best thing for a healthy market would be to level the playing field between independent brokers and direct lenders when it comes to offering these products and services. That way, we all stand to benefit, including the customer.” - Arun Maharaj, CEO, Hashching

Smart contracts on the blockchain

“One of the biggest issues facing the lending industry is how to capture the attention of the Millennial generation who have taken over Baby Boomers as the largest segment of audience. They are a completely different market. They want faster turnaround times, transparency and ease of digital access.

“Innovation for brokers needs to be centred around digitalisation to automate processes and reduce workloads. The use of AI and machine learning will play a critical role for data collection, visualising, analysing, interpreting and actioning. Smart contracts on the blockchain [are] also in early exploration stages, which has the potential to further disrupt and streamline the home loan process (for both consumer and broker).

“These types of innovations will provide massive advantages for brokers; as it frees their time from tedious paperwork and face-to-face meetings which make it hard for them to scale their business. Speed, usability and simplicity will no longer be competitive advantages, but rather hygiene factors all brokers will need to offer.

“Joust is utilising and exploring all these innovations to provide a better experience for both broker, consumer and the Australian home loan marketplace.” - Carl Hammerschmidt, CEO, Joust

A shift in mindset

“The greatest innovation that the mortgage market would benefit from is to fundamentally shift the mindset from being a ‘mortgage broker’ to a ‘finance broker,’ and actively adopt a ‘whole of wallet’ philosophy. We also urge brokers to include commercial finance in their offering, view clients holistically, and ‘couple’ products. For instance, if an SME is seeking a business loan, consider whether they may also benefit from invoice finance or a line of credit facility.

“This is where Lend’s disruptive commercial finance marketplace comes into play. The platform does the ‘heavy lifting’ by using sophisticated product-lender matching technology to deliver the most aligned products, in real-time. This increases the probability of the lender writing the deal, the broker converting the deal, and the business obtaining the right type of funding. It also saves a substantial amount of time and removes the need to be across ever-changing lender policy frameworks, as well as manual processing.” - Donelle Brooks, head of third party, Lend

Better and faster technology

“The market will benefit most from technology that speeds up processing time and simplifies processes and sales interactions for brokers. Additionally, tech that streamlines lead generation and fully integrates with a broker’s CRM will revolutionise broker procedures. 

“For many years, brokers at PD Days have been told to diversify their business into commercial lending, asset finance and personal loans. Brokers want to secure a greater market share and provide end-to-end holistic solutions for their clients. However, until now, the industry has lacked the tools brokers need to diversify with ease. 

“Tools like LoanQ enable brokers to compete with fintech companies and larger competitors, acquiring clients at a lower cost with fast implementation. Instead of building their own tech solutions, brokers will be able to reinvest back into marketing, growing their staff, and closing deals. With LoanQ, brokers can focus on what they do best while we do the same.” - Scott Juda, head of distribution, LoanQ

Insights and technology

“Brokers play a critical role in the mortgage industry, supporting borrowers [in] every step of the home loan journey. We believe any innovation that supports brokers in delivering exceptional client experiences will largely benefit the mortgage industry.

“We’ve done this by employing different techniques that put the broker and client at the centre of everything we do. Using Agile methodologies and Human Centred Design [allows] us to fully understand the broker and client experience throughout the home loan journey. Because we work in Agile, we make changes quickly and efficiently because we plan and prioritise at speed. 

“When you overlay this with a significant investment in technology over the years, it’s allowed us to transform our approval process, giving brokers and clients both transparency and confidence when working together. 

“We believe this powerful combination of insights and technology will benefit the mortgage industry, but also any business wanting to deliver the best outcomes for their clients.” - Wendy Brown, head of broker sales, Macquarie Banking and Financial Services Group

Investment in loan processing tech

“That one is easy… innovation investment from lenders in their processing of loan applications to avoid service level blowouts.” - Michael Russell, managing director, MoneyQuest

Innovation through simple + digital

“As house prices continue to rise borrowers are looking for quicker bank decisions. Customers, particularly in a hot market, want things to be easy, fast and certain.

“The COVID-19 environment has accelerated digital technologies and the bar has been raised in terms of customer expectations. In the last 12 to 18 months, we’ve really started to solve some of those problems at scale for our customers, with a strong focus on digital and simplification.

“To support this, NAB has implemented policy, process and tactical changes plus boosted technology investment to streamline processes and draw on more data to give borrowers quicker answers. We are also overhauling our origination system and simplifying our product offering, so that brokers can experience best-in-class turnaround times. Simple and digital is at top of our agenda, right across the bank.” - Phil Waugh, executive, broker distribution, NAB

Single-click refinancing

“No doubt: single click refinancing. Right now, it’s difficult to refinance clients from one lender to another, and there’s so much paperwork and processing that has to take place. 

“The mortgage market would also benefit from deeper data insights into customers. The power of data is unbelievable, but we need to make sure brokers have the right technology and tools that are adding value to that data – that’s going to be one of the most amazing things to reshape the broking industry moving forward. On its own, data isn’t valuable, but data that has analytics or value added to it that gives you insights into your customer is where the true power of data sits. And that gets a thousand times more exciting when you power the insights and analytics with Artificial Intelligence.” - Adam Grocke, founder and CEO, Sherlok