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Best in show: The non-major banks

non major banks tplr

non major banks tplr
Annie Kane 13 minute read

Every year, The Adviser commissions Momentum Intelligence to undertake its annual Third-Party Lending Report to understand what brokers think of the lenders they are using. The non-major banks fared particularly well this year, with this segment of the lending market taking centre stage for brokers with their service offering and tech. Annie Kane reveals more.

Following on from last month’s review of how the big four banks have been faring in the eyes of brokers, in this edition of The Adviser we are taking a look at what broker sentiment is like towards the non-major banks.

Now in its 11th year of publication, the Third-Party Lending Report (TPLR) collates the findings of Momentum Intelligence’s annual survey of the lending experiences of mortgage and finance brokers in Australia.

The results of the annual survey paint a holistic picture of the performance of lenders in the third-party lending channel and provide insights to lenders on how they can improve their proposition in the marketplace, all while informing brokers of those lenders outperforming others. 

In this year’s survey, conducted between 24 February and 15 April 2020, 879 mortgage and finance brokers rated the performance of the lenders that they have worked with over the last 12 months (see methodology boxout for more)

The 2020 survey was conducted during the peak of the COVID-19 pandemic in Australia, which has meant that the overall sample size reduced on previous years, as many brokers saw major increases to their workloads while they supported consumers moving to refinance their loans and/or applying for hardship provision.

The survey asked brokers to rate the performance of the residential mortgage lenders (both banks and non-banks) that they had used across 17 attributes covering product, support and technology (you can see all 17 attributes in the sidebar).

This year, brokers were also asked for their perceptions around commercial, business and personal lending. However, the vast majority of respondents were residential brokers relating to residential mortgages (768).

Rules of entry:  The methodology

The Third-Party Lending Report 2020 was conducted online between 24 February and 15 April 2020. The survey encouraged mortgage and finance brokers across Australia to participate in a self-assessed evaluation of lender performance from their experiences over the last 12 months. Participants were invited to complete this survey by email through The Adviser and Mortgage Business. Lenders were also encouraged to invite their affiliated brokers to contribute to the survey.

The survey received a total of 1,258 responses. After an extensive data validation process, including the removal of invalid, duplicate or incomplete responses, the useable sample size for this report was 879 brokers.

This year, Momentum Intelligence expanded the scope of this survey to include brief explorations into the perceptions of brokers in writing commercial, business and personal loans. Therefore, these survey results effectively include 768 residential mortgage brokers, 337 commercial mortgage brokers, 274 business brokers and 225 personal loan brokers.

Good pedigree

Continuing the trend that has been apparent for the past four years, brokers still believe that the non-major banks continue to lead the way when it comes to their offering to the third-party space and their customers. While Momentum Intelligence found that perceptions of lenders had increased across the board this year, this was particularly the case for the non-major banks. In fact, three non-majors (Bankwest, Macquarie Bank, ING) received a total score of 80 per cent and above – the first time such a high score has been achieved in recent years.

In comparison, the highest-rated lender in last year’s report (Bankwest) received a total score of just under 76 per cent. This could partly be attributed to the fact that last year’s survey was conducted when the banking royal commission was fresh in brokers’ minds and therefore sentiment towards lenders as a whole was low.

According to brokers, it is the non-majors’ product range and personnel that are their standouts, as well as their commitment to the channel.

When looking at all authorised deposit-taking institutions (ADIs), including major banks, the non-majors are outperforming their larger counterparts in nearly every attribute, according to brokers. Major banks ranked first for only three of the 17 attributes: upfront valuations (ANZ ranked first), online resources and web presence (CBA ranked first in both). 

Non-majors were particularly well rated for categories that involved personnel: call centre support, business development managers (BDMs) and credit assessment staff, as well as their broker communication.

Where the non-majors are falling behind in relation to the major banks is in web or technological prowess – such as web presence or online resources (with CBA being highest-rated for these two categories this year).

Best in show

This year, the top-rated lender received a total score of 83.19 per cent, the highest score achieved by a lender since 2015 (when Westpac received a score of 84 per cent).

Once again, the leading lender is Bankwest, topping both the non-major segment and all 24 ADIs for the second year in a row – beating out even the major banks (including its parent company, CBA).

It’s no mean feat to achieve consistently high ratings, especially when one considers that across all 17 attributes, Bankwest received an overall score of 80 per cent or more for 16 attributes. Training and education was the only attribute that didn’t breach this score – but still came in first position at a very high 77 per cent.

In fact, Bankwest was ranked first in five of the 17 overall attributes.

Ian Rakhit, Bankwest’s general manager, third party, commented that this is particularly welcome as the bank’s “vision is to deliver brilliant customer experiences every day, and we aim to offer simple, friendly service, security and value for Australians from coast to coast”.

He said: “With 80 per cent of our home loan customers choosing Bankwest through their broker, the

importance and respect we place on that relationship is clear.

“Brokers are so important to Bankwest that they occupy one of our three key priorities, and we continue to make significant investment in the channel.

“Our ambition is to be the best broker bank in Australia, and we can only achieve that by working closely with brokers and adapting to their needs, and the [ranking] suggests we’re on the right path.”

Mr Rakhit added that the bank takes pride in its “collaborative relationship” with brokers, particularly noting that it works to ensure it takes the time to not only understand what really matters to them, but to “co-design solutions alongside them”.

“The wellbeing of our customers, colleagues and the community remains our top priority, and we’ll continue to invest in tools to help brokers deliver the best possible service to customers,” he said.

“We have an end-to-end digital home-buying experience for all parts of the process we control, and the next 12 months should see further improvements as industry-wide benefits are realised.”

After Bankwest came Macquarie, which ranked first of all banks for eight attributes, including commitment to the broker channel (followed closely by ING).

Meanwhile, ING topped the ratings for its product pricing. Speed of service was also highly valued by brokers in the non-major bank space, including turnaround times.

Indeed, turnaround times were the key point of difference for brokers this year across all lender segments.

Looking at all 17 attributes that brokers rate, the TPLR 2020 shows that the most important factors that brokers consider when making a recommendation to a client are:

  1. Product policy
  2. Upfront valuations
  3. Turnaround times
  4. Product pricing
  5. Credit assessment staff

While the majority of these are the usual deciding factors for brokers, “commitment to the broker channel” dropped off the top four influencing factors this year (placing 8th out of the 17 attributes that brokers consider).

However, its high influence in last year’s survey was most likely due to the fact that the threat of the royal commission made brokers particularly loyal to those lenders who backed them in 2018.

As commitment to the broker channel fell in priority, turnaround times increased in importance – with the research showing that it was the third most important factor brokers considered when choosing a lender in the past year – up from fifth place in 2019’s report.

With the non-majors excelling in many of these influencing factors, it is perhaps unsurprising that they continue to fare very highly in the eyes of brokers – providing quick answers to queries, supporting and workshopping scenarios and delivering consistency in service. Combined, it’s a winning formula for getting a loan approved hassle-free, which is – at the end of the day – what brokers want for their clients.

Want to know more?

The Adviser will be publishing further analysis and the top-rated lenders of the other competitive sets (such as non-banks) in upcoming features of The Adviser magazine.

The full comprehensive results of the Third-Party Lending Report 2020 are available for purchase through Momentum Intelligence. This interactive report is designed to be a detailed competitive analysis tool for lenders to view, compare and contrast their performance against the market.

For more information, please contact This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Standing out from the crowd

This year, turnaround times were the main broker bugbear – but brokers did call out several non-majors for their BDM staff and knowledge.

“Happy with Bankwest. Nancy, our BDM, and Lisa, her offsider, are excellent with their communication and support to us.”

“Firstmac and Bankwest have the best BDMs.”

“Macquarie are the best for everything lending related. Awesome BDMs, credit turnarounds and just great to deal with in general.”

“BOQ BDM in SA is awesome. Needs back-end support.”

“I would like to see more policy on websites for some lenders like Resimac, Suncorp, Firstmac, ME. I often work at night when no one is available to take calls. I also like to find the info myself and only call the banks or BDMs after looking for the info first.”

“Turnaround times are critical. Communication during the loan process also needs to improve. There needs to be a drive towards electronic documentation so we reduce amount of documents/paper we send clients, namely, brochures. Need an electronic solution to help save the planet and stop wasting resources. Clients never read brochures, so there needs to be more emphasis/reference to these brochures on websites rather than provided in physical form.

“Lenders should put more resources to improve their turnaround times for approvals to enhance customer experience and get the credit managers to contact the brokers directly for small questions, which can be solved with a phone call and the file can keep moving.”

“No lender can consistently give fast approvals. Technology has not made these lenders any more efficient. In the mid to late 90s, loans were all routinely approved in 48 hours. You could get one-day approvals in urgent cases. There [are appalling] processes and inefficiency in lending practices (multiple people handing files back and forth).”

 

Best in show: The non-major banks
non major banks tplr
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non major banks tplr

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Annie Kane

Annie Kane

Annie Kane is the editor of The Adviser and Mortgage Business.

As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts. 

Email Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

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