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The non-major bank has said it is “sticking with a 3 per cent buffer” on its loans as it considers it to be “very risky” to ignore APRA’s serviceability expectations.
As more lenders look to make exceptions to their credit policies to enable more borrowers to refinance, AMP Bank has revealed that it has been having internal discussions around its serviceability buffers but won't be moving just yet.
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Hosting its first credit webinar for 2023 this week, AMP Bank’s head of intermediary Paul Herbert, its head of credit Shane Scott, and its head of lending operations & client assist Melissa Christy, detailed how the lender had been overhauling its lending operations and broker experience in recent months.
During the Q&A section of the broker webinar, the bank was asked whether it was reviewing its cashback offers or serviceability buffers, as other lenders have been.
In response, Mr Scott said: “It is something we are looking at and we’ve had discussions internally on it. Our position, at the moment, is it would be very risky to ignore APRA’s mandated 3 per cent [buffer].
“So we’re sticking with 3 per cent at the moment, but are looking at other concessions that we can make in terms of assessment of income loan terms, etc to help those customers that are facing difficulty in repayments because of the significant rise in interest rates we’ve seen over the last 12 months.”
Similarly, Mr Herbert highlighted to brokers that lower serviceability buffers had been brought in by some lenders as “exceptions” and were only for “certain types of customers and certain very distinct scenarios”.
The head of intermediary added: “It’s something we’re still going to talk about … But at no point in time right now have we made a plan to change our current stance.”
On cashbacks, Mr Herbert said that the bank had withdrawn some of its cashback offers for its products in March (for example, with its Essentials loan) and flagged that its current cashback promotional campaign was due to expire on 30 June.
“We’re currently going through a review process about that at the moment, so as we get close to that date, we’ll be able to inform you and the rest of the broker community what our position is with cashbacks. But, at this stage, the current promotion is due to finish on 30 June,” Mr Herbert told brokers.
AMP Bank accelerating turnarounds through tech
During the webinar, the non-major lender revealed that it has been accelerating its turnaround times and creating an “easier, faster, and smoother” experience as its focuses on improving its broker offering.
According to AMP Bank, it has improved refinance settlement times by 70 per cent and overall turnarounds by 30 per cent, as it rolls out new technology to the broker channel.
Ms Christy outlined that the bank had reduced its turnaround times for refinances by more than 70 per cent, having gone from an average of 13 days to settle a refinance loan to three days.
According to AMP Bank’s head of lending operations & client assist, the time saving comes after the bank adopted FASTRefi in February of this year and has enabled the bank to settle a refinance deal within a few days once customers’ documents have been returned.
Moreover, Ms Christy said that the bank improved its overall turnarounds by 30 per cent in the past year, which followed on from a 30 per cent improvement the year before.
Speaking to The Adviser, Ms Christy said that the bank had been focusing on a ‘First Touch Formal’ process, enabling AMP team members to approve the deal the first time they receive it, without needing to request more information.
According to the bank, this has been made possible following a range of enhancements to the broker experience, including a “significant transformation in working towards first point resolution” by reconstructing the contact centre and providing brokers with access to broker experience specialists as well as business development managers.
Approximately 80 per cent of broker queries are now being resolved through this channel, which has resulted in an uptick in the proportion of loans being approved at first touch, the lender heads said.
Ms Christy said: “There’s a number of enhancements we put in last year to help the broker improve the quality of their submission.
“Things like integrating Access Seeker, so they know what the liabilities are upfront, and they can do that comparison. But also, our BDMS are really working with brokers to help them from prior submissions so we can improve the quality of those submissions. And we’ve also got a focus on education with our credit team, so that they’re picking up the phone and, if there’s outstandings, they’re resolved on the spot and move the file straight to approval.
“The feedback we’re getting from brokers is that our experience has greatly improved, due to all the enhancements we’ve made,” she said, adding that AMP wants to “focus on getting that smooth experience” to make it “as attractive a lender as possible to brokers.”
Ms Christy told The Adviser that the bank would continue to update its broker offering, highlighting that AMP Bank will roll out the second phase of its top-up process from July to further accelerate that process and has “a huge focus on improving [AMP’s] decisioning rules to help things move through quicker” as well as challenging all of its existing processes and tightening up its settlement experience.
“FASTRefi is great for refinances, but we want to make sure the experience we give for settlements is great for everyone,” she said.
[Related: AMP rolls out fast refinancing solution for brokers]
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