BROKER’S GUIDE April 2021

Broker’s Guide to Non-Major

WHAT BROKERS TURNAROUND TIMES HOW THE NON-MAJORS WANT IN FOCUS ARE SERVING BROKERS P.12 P.14 P.18

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01616-BRO-TMBL-0421-MPA-Magazine-Ad-190x255-1-2.inddUntitled-1 1 1 11/02/20215/03/2021 12:58:24 3:17:48 PM CONTENTS / EDITOR’S LETTER Contents Editor’s letter April 2021 The changing market

IT’S BEEN just under a year As Momentum Intelligence’s since we released our last surveys show, it’s the speed Broker’s Guide to Non- of decisioning and know-how Major Banks, but given the of non-major banks and their huge amount of change that BDMs that have really given has happened since June non-majors their groove back. 2020, we thought it was On page 14, we asked some of high time to review what the heads of third party at the 06 SHIFTING SANDS has been happening in the banks to outline how they’ve How the segment has lending segment. been making turnarounds, and been faring and what In the following pages, we set consistency of turnaround challenges it faces in out to uncover how quickly the times, a priority. the future sands of the lending market Speaking of the heads of third shift. When reviewing the lay of party, on page 18 we sit down the land for this feature, I was with a roundtable of non-major surprised to see just how many banks to understand what lenders were merging with their they’ve been doing to support non-major counterparts to the broker channel in the past shore their resources and year, and why the channel is take on the . Indeed, important to them. while many lenders have been We hope that this supplement, looking to merge, others have together with the main been less fortunate, exiting magazine, provides brokers the industry altogether. It with a sound understanding goes to show that banking of how lenders have been is not a cheap business, and supporting the market and the regulatory burden has channel during the coronavirus 12 LIGHTNING SPEED been leading many to review pandemic – and will continue to We take a look at why their options. do so into the future. brokers are turning to But while there may be fewer the non-majors brands in the market, the offering that the non-major banks provide is of increasing importance to brokers. Indeed, in less than a year, the flow of broker-originated mortgages accelerated out of the non- majors to the big four, and back again. On page 6, we take a look at the data behind this shift and take a look at how the non-major lending segment, as a whole, has been radically changing. Meanwhile, on page 12, 18 SERVING THE we dig down further into BROKER CHANNEL why brokers are once again The trends that the non- shifting their recommendations Annie Kane majors are experiencing towards the non-major banks. Editor

BROKER’S GUIDE TO NON-MAJOR BANKS 01

P001_Intro_ES.indd 1 9/03/2021 3:33:08 PM SPONSORED CONTENT

to our members and the community. A bank that backs Our sponsorship philosophy focuses on actively serving the interests of the community, not your community marquee sponsorships just for publicity. For example, Heritage’s national Stewart Saunders, head of broker experience at Heritage partnership with leading Bank, shares how Heritage’s position as a mutual bank food rescue organisation supports their genuine passion for helping people and OzHarvest will fund the delivery of 200,000 meals a connecting with communities year to people in need. This approach of good corporate citizenship resonates with our customers and brokers. Last year, Heritage topped the rankings in the JD Power 2020 Bank Brand Authenticity Study, as well as the JD Power 2020 Australia Satisfaction Study, and was also named number one bank in Australia by international business magazine Forbes in their 2020 World’s Best Bank list. Heritage is here to make a positive diˆ erence. We are purpose-driven, not proŠ t-driven. We’re genuine about understanding IF THE past year has experiences, and support experience for customers, and connecting with our taught us anything, it’s the them when they need it most. mortgage brokers and staˆ . members and what matters importance of connection Last year, we moved quickly For over 146 years, to them. Beyond the nuts and authenticity. to adjust to the impacts of Heritage’s “people Š rst” and bolts of our products Aside from competitive the pandemic, introducing philosophy has been at the and services, we are more products and rates, Heritage support measures like foundation of everything we than just a bank. oˆ ers the opportunity to be mortgage relief packages, do – our products, services, a part of something bigger, dedicated phone lines with infrastructure, even the a collective movement that specialist support teams for sponsorships and initiatives puts people Š rst. Unlike the the elderly and frontline we support. As a socially listed banks whose overriding workers, and digital VOI conscious organisation, we’ve goal is to maximise proŠ ts for brokers. Over the next integrated environmental, for shareholders, our focus is 12 months, we’re working social and governance on maximising value for our to introduce a new loans (ESG) principles into our members and giving back to origination platform that everyday operations. In the communities in which will cut the processing time June 2020, we released an we operate. for the average home loan ESG Position Statement that We reinvest the proŠ ts we application by up to 80 per sets out our commitments Stewart Saunders make back into the business cent. This will lead to a faster, to operating sustainably, head of broker experience Heritage Bank to give people great Heritage more seamless and consistent and our commitments

02 BROKER’S GUIDE TO NON-MAJOR BANKS

P002_Heritage_SC_ES.indd 2 4/03/2021 12:09:05 PM A bank that backs your community. Bank you very much!

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Untitled-1 1 5/03/2021 3:15:09 PM SPONSORED CONTENT BOQ

the lending journey. As “WE’RE FOCUSED part of this, in December ON ENSURING THE Banking on 2020 we introduced loan PERSONAL, TIMELY maturity noti cations to alert brokers to upcoming SUPPORT THAT OUR customer milestones, BROKERS HAVE BOQ such as the expiry of a ALWAYS RECEIVED xed rate term. These FROM US IS BACKED It’s been a big year for BOQ, as noti cations include the BY FAST AND the group continues its digital loan maturity date, the type of loan and new SIMPLE PROCESSES transformation and increases broker interest rate the customer THAT FACILITATE flows. Kathy Cummings, BOQ’s general is scheduled to roll to, EXCEPTIONAL manager, broker, outlines how they’ve as well as a direct link to HOME LENDING the Secure Broker Portal EXPERIENCES” been focused on the broker channel where the broker can and what brokers can expect in the submit a retention pricing pipeline moving forward request. This is about providing brokers with the the technoloy changes information they need to required to achieve an proactively connect with automated rst decision. customers to understand Beyond this, we’re working What is the company brokers can access BOQ’s how their situation may currently focused on credit policy and easily on delivering an online have changed and what serviceability calculator for brokers? locate the information they’d like to do next. that will save our brokers BOQ is focused on further they need using search time, as well as introducing simplifying the home functionality. In addition, Why should a broker brokers can use the auto-decisioning of pricing lending process with a view look to partner requests submitted through to achieving the fastest portal to order an upfront valuation, submit a with BOQ? the Secure Broker Portal. possible time to decision for When it comes to our For our existing brokers and their customers. pricing request and track a deal from start to nish, third-party proposition, customers, we’re focused From a technoloy BOQ is in the midst of an on improving the switching perspective, we’re working enabling them to keep their customers updated every exciting transformation. and top-up processes to on better integrating the step of the way. We’re focused on ensuring deliver a more seamless application system that our From a support the personal, timely experience. We’re also brokers use with BOQ’s own perspective, our support that our brokers looking at enhancing our internal platforms. experienced team of have always received credit training capabilities. The end goal is that this relationship managers from us is backed by fast As you can see, it’s shaping alignment will enable us is always happy to help. and simple processes up to be a big year! to provide an automated BOQ’s credit managers that facilitate exceptional rst decision within will also contact brokers home lending experiences. minutes of an application directly to discuss aspects We’re looking forward being received. of an application that to continuing this might require clari cation transformation throughout What tools and or amendment, or to 2021 as we work towards support do you offer explain why an application our aspiration to be brokers, and how do will be declined. We the regional bank of brokers access them? believe responsiveness choice for brokers and In August 2020, BOQ and transparency are key their customers. launched its Secure to maintaining long and Broker Portal, which is productive partnerships. What changes can accessible to brokers via We also want to enable we expect from BOQ Kathy Cummings desktop or their mobile brokers to provide support this year? general manager, broker BOQ device. Through the portal, to customers throughout Our rst priority is to make

04 BROKER’S GUIDE TO NON-MAJOR BANKS

P004_BOQ_SC_ES.indd 4 4/03/2021 12:13:44 PM Untitled-1 1 5/03/2021 3:18:11 PM FEATURE / MARKET OVERVIEW

SHIFTING SANDS The last year has been a strange one for the whole industry, and the non-major banks have been no exception. While strong mortgage demand has led to record volumes being submitted to the non-majors, there’s also been a growing trend towards consolidation. Annie Kane reviews what’s been happening in the non-major banking space

STORY/ ANNIE KANE

06 BROKER’S GUIDE TO NON-MAJOR BANKS

P006_Shifting_Sands_ES.indd 6 8/03/2021 4:28:14 PM LENDERS ACROSS the board have been droves in FY21. While ANZ and CBA had Katherine Long, banking analyst at seeing record volumes being lodged to been the top two lenders used by AFG GlobalData, suggested that the failure of them in recent months. According to brokers in every major state in 4Q20, by Bank was that it “did not prioritise the Australian Bureau of Statistics, both 1Q21, and Macquarie had shot early on trying to create a sustainable major and non-major banks set a record up in broker usage to claim second spot. future with revenue-generating products, for loan volume every month between By 2Q21, brokers in and and it was too late when it finally dawned August and December 2020, closing off NSW were sending the largest proportion that it needed personal loans and wealth the final month of the year with a marked of their loans to a non-major bank services instead”. peak in housing finance. The big four (BankSA and Macquarie, respectively), But even those neobanks with banks committed more than $20 billion with Bankwest, Bank of mortgage offerings, such as 86 400 in loans (in original terms) in December and Macquarie coming in second (which launched its mortgage offering 2020, while the non-majors also saw place in , in 2019), have also been reviewing their record levels of volume, at just over $7 and . options following “capital challenges”. billion that month. More recently, brokers have been Early this year, Volumes continued strongly into turning to non-majors to take advantage (NAB) announced that it had entered into January 2021 for both segments of their service offering and speedy an agreement to buy 86 400 in a bid to of the market. While government decision making (turn to page 12 to accelerate the growth of NAB’s digital incentives such as HomeBuilder and find out more). bank, UBank. Under the $220-million deal, the First Home Loan Deposit Scheme which is expected to complete “mid-year”, had been incentivising borrowers to Bank exits and consolidation the 86 400 brand will disappear, purchase (or build) new property (and But while brokers and their customers subsuming under the UBank name. keep the economy moving), record- have been looking at what options are “Bringing together UBank and 86 400 is low interest rates and a competitive available to them outside of the big four consistent with NAB’s long-term strategy lending environment has also been a banks, the number of non-major bank and growth plans and will enable us to strong attractor. lenders has been falling. develop a leading digital bank that can In fact, competition was so rife last Indeed, analytics and consulting attract and retain customers at scale year that lenders were rushing to market company GlobalData had warned in and pace,” NAB chief operating officer with eye-watering cashback offers. In March last year that one in four ADIs Les Matheson said. early COVID (March-June 2020), the could exit the market within the next five Speaking to The Adviser in February, majors all came out to market with offers years (either via mergers or acquisitions), the CEO of 86 400, Robert Bell, of up to $4,000 for those refinancing their as unemployment levels rise and credit commented: “At the moment, the only loan to them, leading to a surge in traffic appetite dissipates. While Australia’s thing that’s really constraining us – to to ANZ, CBA, NAB and . unemployment rates were softened by some extent – is that the bigger your Broker customers also flocked to government support such as JobSeeker mortgage book becomes, the more the majors, with the Australian Finance and JobKeeper, cushioning the blow, the capital you need. Group’s (AFG) mortgage and competition industry has bid farewell to several non- “Merging with UBank means that the index – which involves an ongoing majors in the past year. capital challenge effectively disappears, quarterly survey of the aggregator’s Late last year, neo-lender Xinja Bank and we will be able to do more of what network of 3,000 brokers – showing that made the shock announcement that it we’re currently doing. That’s certainly major market share surpassed 66 per would hand back its banking licence and the plan,” he said, suggesting that the cent in the fourth quarter of FY20 (ending cease offering banking products. deal would enable it to bring to market June 2020), a record high. Speaking at the time, Xinja said the more innovate products and broaden its But as more volume was sent to the move came “after a year marked by risk appetite. majors, so did turnarounds expand. COVID-19 and an increasingly difficult It’s not just new players that have been ANZ, in particular, has been impacted capital-raising environment”. facing challenges. Super fund-owned by slow processing times, taking around “Following a review of the market in lender ME Bank has reportedly been one month to pick up a file, according to Australia, Xinja has decided to withdraw looking for a buyer for several years to broker feedback. the and Stash (savings) help it achieve more scale and deliver Given this, it is perhaps unsurprising account and cease being a bank. more competition. that the AFG index shows that non- This was an incredibly hard decision,” (BOQ) announced in February that it had major banks have been claiming back Xinja said. entered into an agreement to acquire 100 market share since the majors have The non-major bank made history per cent of Members Equity Bank Ltd for been experiencing blowouts. While the by becoming the first Australian bank $1.325 billion. AFG index shows that non-majors saw to undertake a return of deposits to Unlike 86 400, the deal would see a record-low share in the final quarter customers, with many commentators the ME Bank brand continue in market. of the 2020 financial year (at 33.22 per stating that part of Xinja’s downfall This would mean that BOQ Group would cent), this rebounded back to its usual was the delay in launching a consist of three brands: BOQ, ME Bank level of 41 per cent in the first quarter mortgage product. and Virgin Money. of FY21, holding at 41.16 per cent in the GlobalData warned that challenger If approved, the transaction would second quarter. banks could face a similar fate if they represent the largest merger of two local Moreover, the AFG stats show that didn’t diversify their revenue streams to banks for more than a decade. With 1 brokers operating under the group more lucrative products rather than just million customers between them, the started turning to non-majors in their offering deposits. expanded BOQ Group would become the

BROKER’S GUIDE TO NON-MAJOR BANKS 07

P006_Shifting_Sands_ES.indd 7 9/03/2021 3:35:51 PM FEATURE / MARKET OVERVIEW

Similarly, IMB Bank completed its merger with Newcastle-based lender Hunter United Employees’ in May last year, enabling the merged group to “better meet the challenges of increased competition in the banking sector” and the “increasing costs of operating and responding to regulatory change”. Indeed, there have been predictions that smaller players in the mutual bank sector would need to continue to consolidate to survive. In an unusual speech delivered to the Customer Owned Banking Association (COBA) 2020 Convention in December, the deputy chair of the Australian Prudential Regulation Authority (APRA), John Lonsdale, suggested that it would be “prudent” for smaller banks to “consider the preparatory steps required for a merger or transfer of business” should they face a severe financial stress. In his speech, Mr Lonsdale outlined that 2020 had been “a very challenging year for everyone, confronting the Australian community with firstly a health crisis and then testing the financial system with a resulting economic crisis”. He warned that a large number of the small banks – and not only mutuals – have “business models that are challenged”, which could be exacerbated by the fact sixth largest bank in Australia in terms In January 2021, Victorian-based Pulse that consumers increasingly expect of total customers, according to Roy Credit Union Ltd and Teachers Mutual a strong digital banking offering (with Morgan, behind only the big four and Bank Ltd (TMBL) announced that they had relevant cyber security), which might Bendigo Bank. signed a memorandum of understanding be hard for cash-constrained mutuals The transaction could also broaden to enter merger discussions and begin to provide. BOQ’s reach across the country. While due diligence. “Therefore, it is prudent that such both banks have a significant footprint According to the credit union, the ADIs consider the preparatory steps in NSW, BOQ’s strength is in Queensland merger comes following “growing required for a merger or transfer of and Western Australia, while more than a challenges” in the banking arena. business, including criteria to identify third of ME Bank’s customers are from its Pulse Credit Union chief executive potential partners at an early stage rather home base of Victoria. Stuart Neave said: “In the past 12 than wait for a deterioration in financial Combined, the group will have pro months, the mutual banking industry position,” he told the COBA conference. forma total assets over $88 billion, with has faced growing challenges in an era “Hopefully, recovery plans never need total deposits of more than $56 billion. of digital disruption, reducing margins, to be enacted, but it is important for all BOQ’s managing director and increasing regulatory change and APRA-regulated entities, even smaller CEO, George Frazis, said that as challenges from the COVID-19 pandemic. ones, to ensure they have an effective well as helping the group deliver The strategy driven by our board has plan in place if needed – and it is APRA’s “material scale”, “broadly double the been to search for opportunities to role to supervise that.” retail bank” and provide “geographic achieve the size and scale that will While brokers and customers may diversification”, it would also help the support outstanding and sustainable be increasingly turning to the non-major banking group accelerate its growth service for our members.” banks for competition, the number of and its digital strategy towards “a The move is the latest in a string of non-majors that will be in market to cloud-based common digital retail bank acquisitions and mergers undertaken by provide this to them is diminishing, as the technology platform”. TMBL in the recent past. In August 2020, cost and burden of banking increases. Firefighters Credit Co-operative Ltd It goes to show that the need for non- Mergers at the mutuals signed a memorandum of understanding majors to challenge the big four and The mutual banking sector has also seen to merge with TMBL – which already provide more borrowers with access to a huge amount of change in the past year, comprises Teachers Mutual Bank, finance is strong, but the ability to do so with several credit unions and member- UniBank, Health Professionals Bank and is increasingly difficult – leaving only the owned banks merging. Firefighters Mutual Bank. largest players able to contend.

08 BROKER’S GUIDE TO NON-MAJOR BANKS

P006_Shifting_Sands_ES.indd 8 9/03/2021 3:36:05 PM Supporting Brokers who support West Australians

As a customer-owned bank and based in WA, P&N cares about the relationships we have with our local WA brokers. We understand the important role that you play in providing West Australians choice and competition in our industry. So our aim is to make your life and in-turn the lives of your customers easier. We believe in the power of the collective, and by partnering together we can give more West Australians access to greater choice when it comes to finding the right home loan.

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Untitled-1 1 5/03/2021 3:16:41 PM SPONSORED CONTENT BEYOND BANK

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10 BROKER’S GUIDE TO NON-MAJOR BANKS

P010_Beyond_Bank_SC_ES.indd 10 4/03/2021 12:20:12 PM 3 3 3

Untitled-1 1 5/03/2021 3:14:41 PM FEATURE / WHAT BROKERS WANT Lightning speed As part of our mission to understand the challenges and opportunities that brokers are facing, The Adviser commissions our research arm, Momentum Intelligence, to survey brokers about their lending experiences. We take a look at what the research shows us regarding how the non-majors are performing in the eyes of brokers

IN THE August 2020 edition of The that are their standouts – as well as their According to the latest surveys, a large Adviser, we delved into the findings of our commitment to the channel. part of this comes down to the speed third annual Third-Party Lending Report, This trend has continued for the past six and consistency of turnaround times and which paints a holistic picture of the months, too. Since the Third-Party Lending credit decisioning. performance of lenders in the third-party Report was released, we’ve been tracking The need for a fast time to yes (or even lending channel and provides insights broker sentiment on a month-by-month a fast time to no) is key for brokers in the to lenders on how they can improve basis through the Broker Pulse survey. heat of the mortgage market – as a flood their proposition in the marketplace, all The community-driven knowledge base of borrowers look to get ahead of rising while informing brokers of those lenders aggregates the experiences of Australian house prices and properties are selling like outperforming others. mortgage and finance brokers on a hot cakes. Particularly in the markets of The report utilised findings of a monthly basis to quantify how lenders are and Melbourne, where more than survey that was conducted between performing in the third-party channel in a quarter of properties are selling before 24 February and 15 April 2020, which a bid to help keep brokers abreast with even getting to market, having finance in saw 879 mortgage and finance brokers the latest changes in performance, as place quickly is of increasing importance rate the performance of the lenders that experienced by their peers. to borrowers. Given that brokers want they have worked with over the previous Like the annual Third-Party Lending to assist their clients achieve their goals 12 months. Report, the overall aim of the survey is to (and are now legally held to work in their The 2020 survey found that the trend give brokers the chance to understand best interests), this is also increasingly that had been manifesting for the past how their peers think the market is faring, important to brokers. four years – of an increasing satisfaction and provide the opportunity to outline The February 2021 survey, which with non-major banks – had continued. what is important to them when it comes asked brokers about their experiences Indeed, the survey found that brokers to working with a lender in the hopes using lenders over January 2021, found believed that the non-major banks of creating more lasting and mutually that brokers believed many of Australia’s continue to lead the way when it comes beneficial partnerships. largest banks were struggling to keep up to their offering to the third-party space with demand from the increased demand and their customers. In fact, three non- The strengths of the non-majors for home loan finance. majors (Bankwest, Macquarie Bank, ING) Building on their successes during the All four major banks saw their average received a total score of more than 80 peak of the coronavirus pandemic, the time to initial credit decision expand out per cent – the first time such a high score latest surveys show us that non-majors over January 2021, according to Broker has been achieved in recent years. continue to consistently outperform most Pulse, while many of the non-majors either According to brokers, it is the non- of the major banks when it comes to “ease held their fast turnarounds where they majors’ product range and personnel of use” and net promoter scores. were or improved them.

12 BROKER’S GUIDE TO NON-MAJOR BANKS

P012_What_brokers_want_ES.indd 12 9/03/2021 3:38:47 PM another agreeing, stating: “Smaller lenders are far more proactive to reach a result.” Overall, as a segment, BDMs at the non-major lenders far outperform their counterparts at the majors, the Broker Pulse shows. BDMs at Bank, AMP Bank, Bankwest, Macquarie and ME Bank were rated as being most helpful in the January 2021 survey, with more than three-quarters of the brokers using those lenders that month saying so. One respondent offered the following advice to the Broker Pulse community: “Ensure you have a good BDM to assist with inefficiencies in the assessment process, and talk to Credit Scenario Teams pre-lodging, wherever possible, if anything is slightly abnormal with a proposed application.” Another said: “Engage with smaller and non-bank BDMs as their guidance is very valuable. The same cannot be said for the majors who seem unwilling to offer anything but rudimentary assistance in most cases.” One broker particularly noted that Teachers Mutual Bank, Suncorp and ING had “excellent BDMs who support brokers and really help you out when you are unsure of their policies and processes. They all make you really comfortable and bat for you so your clients can have Looking at Broker Pulse, it’s perhaps largely due to its competitive rates. amazing experiences”, they said. unsurprising that brokers are increasingly However, St.George’s broker experience Overall, brokers told Momentum sending their clients to non-major banks. varied, with only 29 per cent of brokers Intelligence that their decisions of which If you consider that ANZ and Westpac stating their experience was “easy” or lenders to use come down to what makes (and its subsidiary St.George) both “extremely easy” and many lamenting the experience best for their clients, not continued to experience the longest its ever-growing turnaround times as its just the rate. For brokers, the consistency turnarounds (more than 20 days to popularity increases. of service, “common sense approach” initial credit decision, according to But it’s not just the ability to turn to living expenses, the ability to “see Broker Pulse), while Macquarie and ING around credit decisions quickly that a deal” and write a loan quickly – with continued to hold firm with decisions brokers value. The Broker Pulse research good communication – are the factors in under five days, it’s easy to see why shows that there is also a correlation that inform a broker’s choice. It seems, brokers are turning to non-majors in their between satisfaction and consistency for now, the non-majors are able to droves (see page 6 for more). of service. The lenders whose credit deliver these to brokers better than their The speed of service is also a key assessment staff were perceived to major counterparts. part of broker’s perceived levels of apply policies consistently were among satisfaction with the lenders they’re the highest-rated (and most-used) using. The Broker Pulse survey shows lenders in January 2021, and – again – that the highest-performing lenders non-majors were taking the lead. Get involved! (based on net promoter score) were Broker respondents urged their If you would like to save time and non-majors. Macquarie consistently Broker Pulse counterparts to choose energy in understanding lender comes up on top, with its NPS for the lenders carefully, based on the levels performance, and gain access to past six months a whopping 74.4, with of consistency. the Broker Pulse’s knowledge base ING also rated very highly by brokers, One broker told Momentum Intelligence: from the first-hand experiences of with an average NPS score of just over “The amount of shuffling between different brokers, you can sign up to be part 50. Newcastle Permanent, Bankwest, levels of credit divisions is the cause of of the monthly survey at: , and BOQ all have positive these delays, not volume or training new www.momentumintelligence.com. NPS scores, too. staff as they would believe. Each division au/broker-pulse-referral Rate does also play a key part has a new delay, which just keeps pushing in decisioning, and non-major bank out the times.” For more information about St.George was the most commonly used Another said: “I just find the smaller Broker Pulse, please contact info@ lender by Broker Pulse participants banks give better service and post- momentumintelligence.com.au in January for residential mortgages, settlement the same for the clients”, with

BROKER’S GUIDE TO NON-MAJOR BANKS 13

P012_What_brokers_want_ES.indd 13 9/03/2021 3:38:56 PM FEATURE / TURNAROUND TIMES Changing times Brokers rely on lenders to be able to service loans quickly, even during periods of high demand. While brokers can help reduce delays by ensuring all documentation outlined in their checklists is complete and provided at submission, we wanted to know how the lenders were working to ensure that turnarounds are consistently fast for broker-introduced loans. Here’s what they had to say

Hiring more staff Review on submission Offering strong BDM “With the unexpected “Heritage has introduced support level of applications due a number of changes “We work closely with our to the strong market and in our broker mortgage broker partners as we’re government initiatives, process to improve aware that turnaround our service levels last year blew out consistency in turnaround time, and can mean the difference between slightly higher than we desired. Over the broker and customer experience. These purchase success and a buyer missing last three months, we have made some changes focus on service improvements out. Our time to pick up by a credit changes to our internal processes and and scalable service levels to support assessor is among the best in industry. hired more staff in our broker support higher volumes of applications while I strongly encourage they speak to area to ensure our service levels meet delivering quick turnaround times. our broker help desk or business our SLA targets. Our aim is to provide Heritage reviews each application upon development managers about scenarios a full assessed conditional approval in submission to ensure the minimum or for support with completing five business days. New initiatives such required credit-critical documents applications. We have great BDMs who as a new broker website and improved are provided.” are well recognised for their capability, broker-ordered valuation service availability and responsiveness, which will also assist brokers in quicker - Stewart Saunders aids turnaround times.” head of broker experience, Heritage Bank turnaround times.” - Cole Kirkby - Darren McLeod head of broker, Newcastle Permanent head of third party, Beyond Bank

Active monitoring Harnessing Rebalancing resources of volumes automation “Like other lenders, our “BOQ actively monitors “We are making changes SLAs have increased application volumes internally to give more recently, and we are doing and regularly assesses capacity to process loans everything we can to end-to-end resourcing to ensure we’re more quickly, including utilising data address it. We have rebalanced our teams equipped to provide the level of service and technology to automate processes. to insert or redeploy staff into parts of the our brokers and customers expect We’re also investing in growth and process that will help push the business and deserve. We also facilitate direct invested more resources into our through as quickly as possible. To ensure contact between brokers and credit operations teams late last year. We also their applications are processed quickly, managers so they can discuss aspects have work underway to communicate we encourage our brokers to provide of an application that might require up-to-date turnaround times more detailed notes with their applications. clarification or amendment.” clearly to brokers and help them deliver Excellent notes are critical for our for their clients.” assessors to understand the broader - Kathy Cummings picture of the application.” general manager, broker, BOQ - Troy Fedder head of broker partnerships, - Mark Middleton head of third party distribution, Teachers Mutual Bank

14 BROKER’S GUIDE TO NON-MAJOR BANKS

P014_Changing_times_ES.indd 14 9/03/2021 3:40:02 PM Bank of the Year, after year, after year. And we couldn’t have done it without our broker partners. Thank you for your ongoing support.

Find out more at businesspartners.suncorp.com.au

Banking products are issued by Suncorp-Metway Ltd ABN 66 010 831 722 (“Suncorp Bank”).

SGS3915-00_Suncorp_BOTY_Broker-Print-Adapt_FBAA-Broker-Magazine_190x255mm_FPC_FA.inddUntitled-1 1 1 5/03/202118/1/21 3:17:16 1:09 PM pm SPONSORED CONTENT ADELAIDE BANK

we have made huge strides in our broker Adelaide Bank: o ering, increasing our BDM team from six to 17 nationally. Our Australian- domiciled processing A broker-only bank team has also seen growth of more than 200 roles, creating new jobs As one of the few broker-only banks in the market, Adelaide in Adelaide, Melbourne Bank has been focused on delivering a stellar experience for and Sydney, and we have brokers. Raj Kapoor, Adelaide Bank’s acting head of broker also launched a variety of policy and processing distribution, reveals more initiatives to further improve e€ ciency. This year, our focus is to continue simplifying our processes. We have developed a digital document process, which we plan to accelerate, and we’ll commence our use of CCR data this month. There are also a multitude of process improvements in the pipeline. Our aim over the coming few years is to continue improving our value proposition by further promoting our fantastic BDMs, as well as continuing to simplify our processes while retaining the personal service our Your most recent We have invested in our strate‡y is to build broker partners value. financial results have people to ensure that we strong relationships and shown significant now have a greater presence continue to strengthen growth in the Adelaide in the market as well as a these relationships by Bank third-party more consistent experience being there for our space. What do you with our assessment teams. partners when they In addition, we have a need us. think has been driving fantastic product set, a great We are looking to this growth? BDM presence, alongside partner with brokers From a third-party competitive rates and who are aligned with perspective, Adelaide turnaround times. our values of teamwork, Bank’s success has been excellence, passion, driven by our strate‡y over performance, engagement the last 18 months, which What do you most and leadership. has consisted of three value in broker key elements: partners? Strengthening our broker As a broker-only bank, What can brokers Raj Kapoor relationships we are extremely keen and expect from Adelaide acting head of broker Telling our story better pro‹ cient in supporting Bank this year? distribution Adelaide Bank Simplifying processes the broker market. Our Over the last 18 months,

16 BROKER’S GUIDE TO NON-MAJOR BANKS

P016_Adelaide_bank_SC_ES2.indd 16 4/03/2021 12:16:46 PM Seeing is believing.

When we say 100% offset, we mean 100% Get in touch with us today of the time. on 1300 791 679 or visit Not only on variable rates, but on fixed rates too. brokers.adelaidebank.com.au And not just on a 1 or 2 year fixed rate term, but to learn more. on any term to 5 years. Don’t settle for a loan with a regular offset account. Seeing is believing with Adelaide Bank.

Adelaide Bank a Division of Bendigo and Adelaide Bank Limited ABN 11 068 049 178 AFSL/Australian Credit Licence 237879. (1579937-1579936) (02/21)

1579936-ABL-Adviser Full page Print Ad-190x255mm.indd 1 26/2/21 3:19 pm Untitled-1 1 5/03/2021 3:14:16 PM FEATURE / WHAT NON-MAJORS WANT Serving the broker channel We know that brokers are careful when recommending lenders to their clients to ensure they’re getting the best experience. So, what do the non- majors offer brokers? We caught up with them to find out what they’re doing to support brokers

and construction loans, as well as Q. Why is having a strong broker expat deals. presence important to you? Bank of BOQ is passionate about helping more Q. What changes have you made Australians into their homes, and Queensland (BOQ) to the broker offering in the last maintaining a strong broker presence 12 months? enables us to achieve this. In August 2020, BOQ successfully As a regional bank, brokers are also a strategically important part of Q. What trends have you been launched its Secure Broker Portal. our growth aspirations. This is why experiencing in broker-introduced Brokers can use this tool to complete we’re so passionate about making it as loans this past year? their accreditation with BOQ online, simple and convenient as possible for In line with broader industry trends, access the bank’s simplified credit policy, brokers to partner with us to provide BOQ saw a significant uplift in refinance track the status of applications, as well exceptional home lending experiences activity in 2020, which resulted in a shift as submit and track pricing requests. for their customers. in the bank’s acquisition mix towards In addition, in December 2020 the bank this segment. This makes sense in the introduced loan maturity notifications context of COVID-19, with the economic to alert brokers to upcoming customer uncertainty generated by the pandemic milestones, such as the expiry of a prompting many borrowers to review fixed rate term. These notifications help their existing home lending arrangements. brokers proactively connect with their Kathy Cummings More recently, BOQ has seen customers as they approach the next general manager, broker an increase in new purchases stage of their lending journey.

18 BROKER’S GUIDE TO NON-MAJOR BANKS

P018_VoxPops_ES.indd 18 9/03/2021 3:58:54 PM Heritage Bank

Q. What trends have you been experiencing in broker- introduced loans this past year? At Heritage, we’ve seen an increase in activity in the first home buyer space over the last 12 months, particularly in guarantor and construction loans. Heritage has a strong guarantor Serving the offering and has attracted plenty of interest with our Family Guarantee Loan, which is available to both owner- occupiers and investors. From a wider industry perspective, the introduction of the federal government’s housing stimulus packages has also helped drive demand and encouraged first broker channel home buyers to enter the market. Q. What new initiatives/updates have you launched to the broker channel in the past year? Heritage has introduced a number of Beyond Bank was rated as having the initiatives aimed at improving support Beyond Bank best business development managers for brokers and customers, and (BDMs) of any lender this year (with a adapting to the challenges of COVID-19. whopping 91 per cent approval rating). This includes implementing a digital VOI This year, we have a number of exciting solution for broker customers in lieu of initiatives to launch, such as a new face-to-face interviews, priority broker Q. What trends have you been broker website, updated broker-ordered experiencing in broker-introduced pilot, video conferencing and training valuation system, streamlined ID process, sessions with brokers via Zoom, a loans this past year? and electronic signatures. With our focus on the eastern seaboard, case ownership model for assessment of home loans, improvements to our we have seen NSW and Vic volumes grow Q. Why is having a strong broker strongly in this period. First home buyers, upfront valuation portal, and online live presence important to you? serviceability calculator. in particular first home buyers who Broker distribution now accounts for a are constructing their first home, now large percentage of new business each accounts for a large percentage of our Q. Why is having a strong broker month. It has enabled us to expand in presence important to Heritage? new business nationally. markets where we didn’t have a strong Participation in the government’s First Heritage Bank has a longstanding presence, such as NSW and Victoria, and partnership with brokers that’s Home Loan Deposit Scheme has assisted obtain business in our traditional markets us in now having a national footprint in continued for over 22 years now. that were not obtaining by leveraging off As a regional-based mutual bank, the first home buyer space. This has our branding. resulted in a younger demographic of we have a strong branch presence Beyond Bank has only been in the across Queensland, and two branches customers who are taking advantage broker business for five years, but it has of what a customer-owned bank has in NSW. However, brokers are an assisted in growing our loan book higher instrumental part in helping us drive to offer and are using us as their main than budgeted expectations. Apart from financial institution. growth nationally and delivering the volume, all the other metrics such Heritage’s ‘people first’ proposition to as loan quality and arrears levels have Q. What new initiatives/updates a wider market. We really appreciate performed strongly in the broker channel. their contribution in building awareness have you launched to the broker The broker channel is now a major part channel in the past year? of Heritage Bank and the customer- of Beyond Bank’s strategy, and we are owned banking difference. Our focus on the last year was to ensure investing in the channel to ensure this brokers were kept informed and updated continues in the future. with product, policy, pricing and service level updates, despite the face-to-face restrictions. We survey each broker after the settlement of loan, and for the year we had a 94 per cent satisfaction rate Darren McLeod Stewart Saunders from these surveys. head of third party head of broker experience In the Momentum Intelligence survey,

BROKER’S GUIDE TO NON-MAJOR BANKS 19

P018_VoxPops_ES.indd 19 9/03/2021 3:42:08 PM FEATURE / WHAT NON-MAJORS WANT

We remained agile during 2020 Q. Why is having a strong and can offer customers a wide broker presence important to Newcastle range of products. Newcastle Permanent? Newcastle Permanent acknowledges Permanent Q. What new initiatives/ that many customers prefer someone updates have you launched to do ‘the leg work’ to help them identify to the broker channel in the the right loan for them across a variety Q. What trends have you past year? And why? of lenders. We have a great offering and our been experiencing in broker- We’ve accelerated the products offer value, be they put introduced loans this past year? implementation of a lot of new technology, including digital ID forward by us or a broker a purchaser Despite the economic pressures, we’ve tools, digital supporting-document trusts to give them independent advice. seen a surprisingly active property collection, bank statement reading Brokers are another way customers can market across our footprint in the last technology, and digital signatures. learn of our award-winning products year. Property values in the Hunter We’ve also capitalised the and services as they can talk about alone are rising at around 1 per cent opportunity to extend our broker our quick turnaround, particularly for a month, driven by people relocating network into Queensland, which time-critical applications, our product from metro areas like Sydney, home has already proven successful. range and suitability, and our ongoing owners selling, first home buyers Much of what we have customer support post-purchase. and customers taking advantage of implemented was already in our incentives and low interest rates. planning, but the impact of COVID We’ve also seen growth in on face-to-face environments families refinancing loans to get saw us introduce it more quickly Cole Kirkby a lower interest rate or invest in to support our customers head of broker home improvements. and brokers.

have embraced the flexibility and Q. Why is having a strong support our broker partners provide broker presence important to P&N Bank to Western Australians entering the P&N Bank? property market. The broker channel is as strong as ever, and we are already seeing a Q. What trends have you Q. What new initiatives/updates lot of activity in the WA home loan been experiencing in broker- have you launched to the broker market in 2021. P&N is proud of the introduced loans this channel in the past year? relationships we have with WA brokers past year? Investing in our broker channel is and is focused on building further With many first home buyers using a key strategic priority for P&N, scale to ensure we can fully support mortgage brokers to help them recognising that mortgage brokers play the current and future needs of our brokers and their clients. navigate the home loan process, a significant role in driving competition It’s important that we continue to P&N Bank was committed to and assisting smaller lenders with focus and invest into this channel, engaging broker partners when we mortgage distribution, so delivering ensuring both brokers and our were accepted onto the Australian an exceptional broker experience and customers receive a local personalised government’s First Home Loan building deep relationships with our service that adds value and provides Deposit Scheme panel in 2020 broker partners is key. flexibility and convenience. as the only WA-based customer- P&N recently hosted a series owned bank. of broker workshops aimed at P&N made places available through thinking outside the box to generate broker and proprietary channels, innovative solutions to deliver a better resulting in 80 per cent of these experience, with the results now being Daniel Woods loans being written by brokers. used to further enhance our overall head of broker and business This shows that first home buyers broker proposition. development

20 BROKER’S GUIDE TO NON-MAJOR BANKS

P018_VoxPops_ES.indd 20 9/03/2021 3:59:13 PM per cent fixed rate offer has been Q. Why is having a strong broker particularly popular. presence important to Suncorp? Suncorp Bank Brokers are on the ground both virtually Q. What new initiatives/updates and in real life, having meaningful have you launched to the broker conversations with customers and Q. What trends have you channel in the past year? potential customers about their future been experiencing in broker- Suncorp is focused on sharpening up financial goals. They are trusted advisers introduced loans this past year? our products and services to make and provide really valued advice to Brokers are looking for loans to things easier for our customers, their clients. suit their customer’s own unique brokers and aggregators to do business For us at Suncorp, brokers represent circumstances, whether it’s with us. We have launched our a crucial way to connect with our purchasing a new property, buying an market-leading 1.89 per cent two-year customers. In fact, almost three-quarters investment property, refinancing their fixed rate offer, supported customers of our new and existing home lending current home, or drawing back on requiring loan deferrals through customers originate from brokers. equity to fund renovations. COVID-19, and launched initiatives to We know that when our brokers We know great rates are important. make it easier for brokers to process succeed, we do as well, which is why However, we also understand the applications for their clients. we have strong ambitions to work importance to both brokers and For instance, Suncorp’s Easy harder for our brokers and earn the right customers of delivering lodgements, Refinance and Easy Add Loan to grow further over time. approvals and settlements in an initiatives, which were launched last efficient and timely manner. December, use technology to access Customers have certainly been richer consumer credit information encouraged by official interest to identify applicants who have Troy Fedder rates reaching an all-time low, and proven borrowing history and, in turn, head of broker partnerships we have found our two-year 1.89 accelerates the approval process.

applications in Queensland, specifically Q. Why is having a strong broker from to Mooloolaba. Victoria saw presence important to TMB? Teachers a decrease in applications during the stage Teachers Mutual Bank started 55 years 4 lockdowns, likely because of the impact ago as the NSW-based Teachers Credit Mutual Bank these had on viewing properties. Union. Since then, we have grown to become a national organisation serving Q. What new initiatives/updates essential workers. This gradual growth Q. What trends have you been have you launched to the broker means that we don’t have the national experiencing in broker-introduced channel in the past year? And why? bricks-and-mortar representation of loans this past year? We continue to review our processes some other lenders. Brokers help us to We saw a significant spike in lending in May to look for ways we can improve the access new markets as they act like an 2020, with an increase in flows of both experience of brokers and their clients extended sales force for the bank. investor and owner-occupier loans. When through technology. Last year, we The broker channel has helped us comparing with the previous 12 months, introduced digital signatures via DocuSign reduce our concentration in NSW and business in the third-party channel has to facilitate the loan process. spread the business to other states. increased by approximately 50 per cent. We also introduced a deferred This enables us to think about opening The RBA has moved the cash rate commission payment calculated by more offices and increasing our to record lows, and many lenders have reviewing the loan account balance at the national representation. responded by offering highly competitive 12-month anniversary of the loan. The top- fixed rates. We have seen an increase up commission is based on the difference in fixed rate applications due to the between the current loan account balance great rates we are offering and the (net of any offset) and the loan account ability to have a 100 per cent mortgage balance used in the initial upfront calculation Mark Middleton offset available. of the loan – provided the movement is head of third party distribution We have seen an increase in greater than or equal to $20,000.

BROKER’S GUIDE TO NON-MAJOR BANKS 21

P018_VoxPops_ES.indd 21 9/03/2021 3:42:32 PM Low rates. Fast processing. Award-winning service.

Let us surprise you and your clients with just how great customer-owned banking can be. Choose better with Newcastle Permanent.

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Newcastle Permanent Limited. ACN 087 651 992 Australian Licence/Australian Credit Licence 238273

DES-1038_The Adviser_FullPage_March_190x255_180221_fa.indd 1 5/03/2021 4:08:26 PM Untitled-1 1 5/03/2021 5:00:56 PM