YEAR IN REVIEW - Thinktank
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DECEMBER 2021 ISSUE 18.24
YEAR IN REVIEW
The pandemic has battered the economy for nearly two years, but it also helped drive a property
boom. Twelve industry leaders share their thoughts on 2021 – and what 2022 might offer /14
ALSO IN THIS ISSUE…
Big deal
How Better Choice helped a Morgan
Brooks client out of a tricky situation /24
Real estate market analysis
Boss Money’s Tom Uhlich says house
prices have outpaced wage growth /26
BNK Banking Corp picks interim CEO Housing prices predicted to fall by 2023 New tech tools to speed up loans In the hot seat
Broker channel favourite Allan Savins ANZ forecasts property price growth to slow Simpology CEO Kate Gubbins says digital Bloom Capital’s Rachel Farrell is named
is appointed as BNK’s interim CEO /04 in 2022, then drop by 4% the next year /10 innovations will help lenders, brokers /30 as a leading broker to watch /34
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YE AR IN RE VIE W
LOOKING
MOST READ ONLINE STORIES IN 2021
THE 10 BEST SUBURBS TO INVEST IN SYDNEY IN 2021
Investing in property in Sydney is an absolute no-brainer. Australian
BACK AT 2021
Broker surveyed the property market to find the best suburbs to sink
your cash into, with Narrabeen, Collaroy, Bardwell Park, Fairlight,
Cronulla, Petersham, Bexley, Coogee and Kensington making the list.
TWO BANKS SLASH INTEREST RATES DESPITE WIDESPREAD RISES
The shadow of the pandemic has loomed Despite the current trend of lenders raising interest rates, two lenders
have decided to slash their rates in a play for the key refinancing
over the Australian economy for a second market. Fintech UBank has taken 0.1 off its three-year fixed rate, with
year. Australian Broker talks to 12 financial owner-occupiers with lower than 80% LVR now paying as little as
1.85%. Bank of us, one of the biggest banks in Tasmania, will offer its
services industry leaders, who reflect on the customers 1.79% on a one-year fixed rate home loan.
challenges and achievements of 2021 and
CBA RAISES INTEREST RATES IN KEY ASSESSMENT CRITERIA
share their expectations for the year ahead
CBA has changed its Home Loan Assessment Floor Rate, raising it
15 points to 5.25% p.a. Its interest rate buffer will not change and has
been fixed at 2.50% p.a. CBA put the move down to a reassessment
in the mortgage finance “For some lenders, this served as of home loan affordability in the sector. The Home Loan Assessment
PEOPLE Floor Rate is the method by which CBA and other banks assess the
industry have barely a catalyst for greater innovation,
been able to catch their breath this but specialist lending is something ability of customers to repay a loan.
year, having been buffeted again by Liberty has offered for nearly 25 Barry Saoud, general manager mortgages and commercial lending, Pepper Money John Mohnacheff, group sales manager, Liberty
the fierce winds of COVID-19. years,” Mohnacheff says. “And, with HOW THE COLLAPSE OF EVERGRANDE COULD IMPACT
Widespread lockdowns extensive experience in this space, AUSTRALIA’S PROPERTY MARKET
and closed borders hurt small our unique business model has
The impending collapse of Evergrande, the second-biggest property
businesses, employment, education enabled us to help business partners “If we can avoid any major more efficient as well as improving customers’ decisions. An informed expected brokers would receive a
developer in China, has spooked markets in Australia and beyond,
and construction. But federal support customers with a range of hiccups, there is significant customer experiences,” she says. broker makes all the difference major boost on the back of COVID,
with fears that our property sector could feel the shockwaves.
and state government financial complex needs.” opportunity for brokers to support “It’s also never been easier for when it comes to customers feeling and that’s what happened, with
Australian Broker spoke to experts to gauge the impact.
support mitigated the worst He says the pandemic has affected those looking to ramp up their customers to communicate and in control and confident in their brokers writing a record $78bn in
impacts, helping many workers and the Liberty community in many existing businesses or perhaps work with their broker. For example, decision-making.” the June quarter of 2021 alone – a
businesses stay afloat. normalising digital signatures might La Trobe Financial senior vice 50% increase year-on-year. IS PROPERTY A GOOD INVESTMENT IN AUSTRALIA?
The property market boomed, seem like a small advancement president and chief lending officer He says these “tailwinds” for
with prices surging more than “We’ve witnessed record growth in during the pandemic, but the Cory Bannister says 2021 will non-banks and brokers were
Brokers have a duty to introduce their clients to the potential to
increase their property portfolio and earn in the long term. Property
20% nationally. Increased demand efficiency and time gained for long be remembered as being a blowing well before COVID, when
was fuelled by record-low interest the alternative and non-conforming brokers will be enormous.” time of uncertainty, complexity the major banks simplified their
investment factors include future property market growth, more
stability than stocks, tax deductions, long-term investment, security,
rates. This was great news for Mitchell says when the pandemic and challenge. strategies and vacated the “complex greater control over decisions, and equity.
brokers and lenders as clients space, and all signs point towards took hold in 2020, initial reactions “Where there is complexity credit” space after the banking
sought loan options to fund their were survivalist, but it soon became and uncertainty there is often royal commission.
property goals. this remaining strong” clear it was a time when customers opportunity; and particularly for “However, there are a number of
Technology, mergers and would need brokers the most. non-bank lenders, along with segments of the lending landscape
acquisitions, open banking, industry Barry Saoud, Pepper Money “The discussion soon turned to brokers, that has certainly been the that have been left with little support of Australia’s total lending market really needed them.”
regulation and diversification were how do we – as an entire group – case,” says Bannister. or credit availability at a critical compared to about 20% pre-GFC. Felton says this resilience and
important trends in 2021. ways, requiring ongoing effort to explore new avenues,” he says. manage the overwhelming demand. Mike Felton, CEO of the MFAA, commitment produced incredible
Australian Broker asked 12 continue to provide “the standard “Let’s not forget, with months of “Throw in the acquisition by says 2021 presented many broker market share results – the
industry leaders about the issues of service that our brokers and delayed purchases and investments REA Group, as well as combining “While no one expected the year to challenges, and “our industry’s latest figures show 66.9% or two
that shaped the year and what they customers need”. in certain parts of the country, the Mortgage Choice and Smartline resilience and flexibility helped us thirds of all new residential home
believed 2022 would bring. “With our head office located there is now likely to be an influx businesses, and there’s been a lot of bring such uncertainty, the industry rise above them again”. loans were written by brokers.
in Melbourne, early lockdowns of customers eager to make up for change for every stakeholder over “Brokers’ adaptability to change “The fact that we achieved our
COVID-19 taught us many important lessons lost time; whether it’s a new home, a the past 24 months. has remained as resilient as ever” and focus on customers proved highest market share result to date
Liberty group sales manager about how best to navigate these new vehicle or even a major holiday, “What I have learnt most is that to once again to be the keys to success during a year when customers were
John Mohnacheff says the learnings challenging circumstances. customers are ready to get back to meet the challenges in our forever- John Monhacheff, Liberty over the past year as our industry under so much pressure, approval
from 2020 served the financial We know that a one-size-fits-all their regular lives and are seeking changing world, you have to be remained agile in the face of COVID- times were very challenging and
sector incredibly well this year. approach simply doesn’t work, but funds to take the next steps.” constantly communicating with your “And that’s because non-banks time for the Australian economy. related process changes and the new regulations were implemented
“While no one expected the by exercising compassion, flexibility Susan Mitchell, CEO of Mortgage network. Listen to their concerns are ideally suited to providing This includes SMEs in particular. commencement of the single biggest is inspirational.”
year to bring such uncertainty, the and innovation we continue to Choice, says the biggest change has and ideas, and let them know when credit appropriately throughout “This gap is now being filled legislative change our industry has When COVID first hit, says
industry has remained as resilient as grow stronger as a business and as been “increasing capacity within and why you’re taking action.” this period, due to the custom in part by non-banks, which are faced in more than 10 years: the best NextGen.Net head of broker
ever,” he says. a brand.” our respective businesses to manage One of the biggest challenges nature of our credit assessments all stepping in to fill the void for interests duty,” Felton says. partnerships Renee Blethyn,
One of the most notable changes Mohnacheff says while the the unforeseen record levels of is lender turnaround times, and our willingness to take the time customers that would ordinarily be “I’m very proud to say we have also the leading fintech moved its
brought about by COVID that unemployment rate is higher than mortgage activity”. says Mitchell. to fully understand a customer’s taken up by the major banks.” remained true to the customer-first ApplyOnline user training online
the non-bank specialist lender desired due to ongoing lockdowns, “The broking industry has “It’s absolutely critical that our unique position and then provide an Bannister says he doesn’t see this ethos that sets our industry apart. to educate the broker network on
has seen is the increased demand there are signs of a promising return invested heavily in technology, support staff and brokers are across appropriate tailored solution.” trend reversing any time soon, given Brokers continued to put customers the latest digital tools to help them
for flexible lending. as we head into the holidays. and it’s making broking platforms the details because it will impact Bannister says La Trobe Financial that non-banks represent just 5% first at a time when Australians keep working.
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sectors, and continued to pay all in small businesses turning to stimulate new applications, lowered have moved either within their
drawdowns for existing clients as brokers for support with funding interest rates and created new own or to another state or territory
required,” he says. and opting for longer-term loans. specials for the self-employed. because of COVID and are not
Growth in the property market “OnDeck Australia notched up a “At a time when cash flow had planning to return.
has been record-breaking in spite significant milestone, writing 76% taken a hit in most industries, we “We continue to see strong
of lockdowns, financial stimulus, more broker-originated loans in the ensured our specials had great momentum across all segments of
interstate migration and strong first half of 2021 compared to the interest rates, no application fees the property market. NAB is very
prices, Arentz says. 2020 calendar year. Average loan and, as always, no LMI and no risk much open for business with great
He believes brokers need to be sizes also increased by 20%, rising fees,” says Gair. SLAs, products backed by highly
across the major challenges in from an average of $52,000 in 2020 Sharon Piening is treasurer competitive pricing, and offers
property development. to $62,000 by mid-2021,” says Reily. of CAFBA and a director of for every customer in the market,”
“While property prices are Contributing to this growth commercial and asset finance Waugh says.
appreciating strongly, some supply was the launch earlier this year of brokerage The 500 Group. She says “According to CoreLogic, investors
chain interruptions as well as rising OnDeck’s The KOALA Score™, the industry has changed in many are the fastest-growing sector of the
construction costs have presented an innovative credit assessment ways due to COVID. market, with plenty of upside still to
a new construction landscape for algorithm, and Lightning Loans, “Remote working and the use go. NAB is well positioned to help
property developers to navigate.” which delivers up to $100,000 in of the office is the most obvious investor clients grow.”
Developers need to carefully fast, unsecured funding. and prevalent change,” Piening Waugh says NAB has seen great
review their building contingencies, Ryan Gair is CEO of self- says. “Many brokers have had to loan growth, with application
with respect to both timing and cost. employed specialist and mortgage invest heavily in the technology to volumes increasing significantly.
“Valuations for end product are manager Rate Money. He says one facilitate remote working … it will be “We want to make the experience
on the move as well, but they’re thing his team has learnt is that interesting to see what happens in of buying a home simpler for all
historically based; up-to-date QS Australians are a resilient bunch. the future as many brokers and their our customers and to support them
reports are essential.” “Life as we know it has certainly staff are very keen to get back to with the confidence of an approval
OnDeck national channel and changed, but what wasn’t going to the office at least a few days a week.” as quickly as possible, regardless
Phil Waugh, executive – broker distribution, NAB
partnerships manager Nick Reily change was the spirit and resolve Using technology to engage with of channel.” Susan Mitchell, CEO, Mortgage Choice
says the pandemic has been a of self-employed Australians,” clients and referral sources has also Process changes are having a
challenging and uncertain period Gair says. “We knew that as a increased – a trend that’s likely to positive impact by ensuring that
for many small businesses. business we had to continue to fight continue as funders become more NAB’s service is stable and consistent.
“We hosted webinars every employed was lockdowns affecting comfortable with platform security. “Some of these changes are part To maintain the fast turnaround customers in the first-half period
month; in FY21 we trained more their ability to trade. Piening says that after two years of of an ongoing review of our entire times and excellent service Liberty either purchase or refinance a
than 7,000 brokers online. In 2022,
we’re going to keep our monthly
“They may have experienced
lower trading, no trading at all, or
“Our latest broker Net Promoter lockdowns there’s a pent-up demand
from business owners for finance.
end-to-end broker experience, which
we are determined will make us the
is known for, Mohnacheff says,
internal processes have been refined
home, or secure asset finance, a
record in our 21 years of business.
online training going, but we
also plan to continue to support
even the opposite with a spike in
trading. Because of this, historical
Score saw an increase to +10, which “The key opportunities will be
in commercial and asset finance,
most reliable bank for all brokers and
ensure consistent service across all
to achieve maximum efficiency and
avoid delays.
As we exit 2021, we continue to
see application levels trekking well
both brokers and lenders through
partnered training sessions to raise
financial information may not
present a fair reflection of current
demonstrates that we are moving particularly those local businesses
which can take advantage of supply
channels,” says Waugh.
“Our latest broker NPS saw an
“We have also extended our
Melbourne-based team to ensure
above pre-COVID, setting us up
well for 2022.”
awareness of new ApplyOnline
services,” Blethyn says.
and future performance.”
This is where Thinktank’s forward in the right direction” chain issues that have been created
by COVID-19.
increase to +10, which demonstrates
that we are moving forward in the
that there is always someone Mitchell says homebuyers were
Peter Vala, general manager Mid Doc loan product comes in. Phil Waugh, NAB “Business confidence is fragile, right direction.”
partnerships and distribution at
Thinktank, says that despite another
It relies on a self-certification
declaration and one other form
and governments at all levels across
Australia will have a key role to play,
Mohnacheff says despite the
challenges of a crowded property
“The broking industry has invested
disrupted COVID year, the efforts
of the lender’s team and the support
of support, such as two BAS or
six-month loan statements or an
“But we have been impressed at
how many OnDeck customers have
and to support these people. Whilst
the world around them lacked
providing support and creating the
right environment to ensure the
market, first home buyers have
remained a key demographic, with
heavily in technology, and it’s
of its broker network enabled
Thinktank to record a very busy and
accountant’s letter.
Vala says the impact of COVID on
pivoted into new revenue streams to
survive and even thrive,” Reily says.
stability, we knew that was exactly
what we had to provide.”
economic recovery and bounce-back
are sustained.”
savvy buyers taking advantage of the
First Home Loan Deposit Scheme
making broking platforms more
successful 2021.
“The learnings and changes
some SMEs and the self-employed
may not be fully realised until the
OnDeck was quick to recognise
the challenges of lockdowns and
Rate Money decided to prioritise
supporting its broker channel
Piening says CAFBA has listened
to feedback from members and
and the First Home Loan Super
Saver Scheme. efficient, as well as improving
implemented through 2020, later part of 2022. social distancing for the small during the pandemic. continued to advocate on their Understanding the challenges
from significant technological “We expect a number of businesses business community. “We kept a very consistent behalf to government, regulators first-time buyers face, Liberty works customer experiences”
advancements to flexible working may be facing various finance “We were absolutely on the front approach to all our lending policies; and lenders. closely with its business partners
arrangements and agile policy covenant compliance issues, even foot delivering valuable support not we agreed that we also wouldn’t “For example, through our to provide flexible solutions to help
Susan Mitchell, Mortgage Choice
adjustments, provided us with the though they may not have defaulted just to our clients but to the small bring in COVID restriction policies relationship with the Council of customers reach their goals faster.
tools to respond effectively to the on their facilities. For this reason, it business sector more broadly.” requiring additional documentation.” Small Business Organisations of “As well as low-deposit home available to help provide customers on an emotional rollercoaster in
many obstacles we all faced again in is critical brokers remain close with Reily says OnDeck launched, Just because an individual Australia [COSBOA], we advocated loans, we accept gifted deposits, and business partners with fast 2021 as they watched prices soar
2021, resulting in further significant their clients that have annual reviews and continually updated, its business client doesn’t fit into a for clarity around ongoing support and we can also look at building answers to any questions that arise 20% across all capital cities.
growth in broker engagement and due over the 2022 year.” online COVID-19 resource hub, certain box, it doesn’t mean they’re for SMEs and supported COSBOA’s LMI into the loan structure. These along the way,” he says. “Brokers have had to really set the
lending volumes,” Vala says. Clinton Arentz is the head of which kept small businesses not a good customer, Gair says. Business Rebuilder Proposal.” options can make a powerful impact Barry Saoud, Pepper Money’s expectations around what exactly
“We were not alone in our ability lending and property assets at informed on stimulus measures “At Rate Money, we pride ourselves on a first home buyer’s borrowing general manager mortgages and borrowers can afford and how much
to ride the bumps of the last two non-bank lender Trilogy Funds. and state restrictions and on always weighing an application Property market, loan demand ability,” Mohnacheff says. commercial lending, says, “We’ve they’ll need for that all-important
years, and it is pleasing to see “Despite the pressures and provided educational content on its merits. Small businesses were NAB executive – broker distribution “With greater need for flexible witnessed record growth in the deposit,” she says.
the lending industry as a whole constraints caused by the pandemic, and inspirational small business struggling enough without us making Phil Waugh says the pandemic lending options across the board, alternative and non-conforming The focus was again on refinancers
continuing to remain strong and throughout 2020 and 2021 we stories. In September, the lender it harder for them.” has fundamentally changed how Liberty’s loan growth has continued space, and all signs point towards who were keen to get a better deal
gain momentum.” continued to write new construction launched a four-week repayment To support its branch principals Australians purchase a home. on an upward trajectory, and we this remaining strong. or to take advantage of ultra-low
Vala says one of the biggest loans across the residential, holiday for customers. and customers, Rate Money The latest NAB research suggests are well placed to help customers “Our originations hit a milestone interest rates. Mortgage Choice
challenges for SMEs and the self- industrial and commercial property There has been significant uplift regularly released specials to that almost one in 10 Australians achieve their goals.” by June; we’ve helped over 27,000 data shows that, in the 12 months to
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October 2021, about 39% of loans ask for special treatment, just a level they have in their property.
written were for refinances, followed playing field for broker customers.” “No doubt the future may be
by customers buying their next home Blethyn says NextGen.Net digital, data and technology driven,”
(27%) and first home buyers (19%). was able to support lenders and he adds, “but the essential role of
“Since April we’ve seen a slight broker groups through its Industry brokers remains crucial.”
uptick in investors re-entering Benchmark Reporting Service, Felton says new technology will
the market. However, APRA’s providing trusted insights and continue to play an important
increased interest rate buffer may analytics on key data points, role as the industry finds ways to
slow this activity,” says Mitchell. including turnaround times. more efficiently attract and engage
It’s been an incredible year for “We also worked closely with our with customers in an increasingly
Mortgage Choice, she adds. partners to maximise automation digital world.
“We saw loan settlements grow and digitisation to improve “With Consumer Data Right
29% to almost $13bn in FY21, and processing efficiencies and help [open banking] rules being
we settled more than 37,000 home deliver faster turnaround times.” rewritten to allow consumers to
loans over that same time – an Arentz says growth in the value share data with mortgage brokers
increase of 25% year-on-year.” of the Australian residential as trusted advisers, it’s important
Lender turnaround times had property market over the past year that brokers and aggregators have
improved but were still not where surpassed expectations. appropriate capability, or third-party
they needed to be, so in February The pandemic has been service providers, to allow them
Mortgage Choice launched its own notable for driving a strong shift to leverage the opportunities open
white label product, Mortgage in consumer sentiment towards banking presents.”
Choice Propel, delivering a verified lower-density living, and also for Arentz says Trilogy Funds has
home loan approval in rapid time. causing a flight from capital cities to a tailored portfolio forecasting
Felton says the MFAA regional areas. platform designed to monitor
understands that loan volume can “However, easing border individual loans and the loan book,
impact turnarounds. “But our data restrictions and the eventual return with the ability to scenario-test a
demonstrated some banks’ branches of overseas students, immigrants Cory Bannister, senior vice president and chief lending officer, La Trobe Financial Mike Felton, CEO, MFAA Renee Blethyn, head of broker partnerships, NextGen.Net large number of possible outcomes.
operating on two-to-five-day and hospitality workers, as well “It is interactive, dynamic and
turnarounds, whilst brokers’ as businesses and nightlife, are multipurpose,” he says.
customers were forced to cope with expected to reverse this trend The platform is used for current
turnarounds in some instances of up and boost demand for city At Rate Money, Gair says Technology activation and usage among brokers their customers’ lives easier. loans up to $250,000.” and forecast loan assessments, loan
to 40 days and more.” accommodation,” Arentz says. property market growth most Saoud says technology is creating to improve conversion and create “The difficulty they’ve got is the Reily says digitisation is being progress, cost to complete and to
The MFAA played a crucial role “Australia’s residential property certainly defied expectations. remarkable opportunities in new opportunities in new segments. variance between the lenders and driven by its ability to lower unit monitor broader liquidity trends
in elevating dialogue and bringing market is now settling into a period “The demand that we saw at alternative lending, and Pepper In 2021, the PPS provided a what’s available to them, so it’s costs; faster response times for across the loan portfolio and fund.
greater attention to this differential of somewhat slower growth in our Rate Money was phenomenal. Money is reimagining how it delivers mortgage solution to over 13,000 important for lenders to invest in as brokers and customers; elimination “It enables us to provide quick
In the last 18 to 24 months our value to its customers and brokers. customers, and 5,300 customers much automation and as many tools of the ‘slow no’ that many small turnarounds and agile responses
“There are segments that have average loan size has grown by
over $150,000,” he says.
“We are not interested in
providing a generic digital offering.
with Resolve.
“Sage is now processing over 20%
as possible for brokers to improve
straight-through processing,” she says.
businesses experience; and the ability
to gain a more holistic view of a
to brokers, and to direct borrowers
and loan updates in the current
The company knew it had to We want to give our customers and of our mortgages volume, combining “When lenders utilise digital business’s credit risk rather than a fast-paced property environment.”
been left with little support or grow with the market, Gair says. brokers a digital experience that our cascading credit model with tools services such as ApplyOnline rear-vision approach. Piening says the finance sector
“We are a big believer in complements and accelerates the a customer’s credit history and an ‘eSign’ and the in-built Document At NAB, Waugh says more than has embraced new methods, using
credit availability – this gap is now reinvesting back into the business strong service they expect,” he says. automated property valuation to Verification Service, the application 93% of its customer interactions tech tools such as video conferencing
in order to better ourselves.” Pepper Money is focused on expedite approval. And Solana has process becomes much easier for now occur through digital channels, platforms to ensure consistent
being filled by non-banks” Rate Money was heading process efficiencies and streamlining increased our capacity to assess the broker.” and the bank’s research shows service, while some lenders have
into 2021 with 11 branches with increased automation, and on that one in five Australians use a introduced DocuSign to their broker
Cory Bannister, La Trobe Financial predominantly in NSW and continuing to enhance its platforms banking app every day. He says network to boost efficiencies.
35 people across its network. and build better customer and “Brokers’ adaptability to change Australians are looking for ways to “The majority of lenders and
that has made it harder for mortgage mind. Nonetheless, it continues to “Fast-forward 11 months and broker experiences. take greater control of their finances aggregators also shifted their focus
brokers to compete, says Felton. provide compelling opportunities we have 21 branches, with another “Our multi-experience focus is and focus on customers proved following the pandemic. to online education and digital
“We told the story via select for experienced developers who four ready to open in Q1 next year. all about bringing these things “Over the last 18 months, we have PD days. These have drawn a large
media, but also followed up with know where to look and how to On top of that, we now have over together so that our customers and once again to be the keys to success” responded to changing customer audience, and we expect the trend
meetings with lenders, regulators successfully deliver their projects.” 100 people in the network, branches brokers can get what they want, behaviours to be more digital and to continue.”
and government, including ASIC, He says industrial property has in three states, soon to be four, when and how they want it, no
Mike Felton, MFAA to help customers to better manage Digitisation can save time,
Treasury, the Treasurer’s office, the been largely immune to the falling as well as settling $1.5bn for the matter the channel. and have control over their money reduce bureaucracy, and lead to
Chair of the Standing Committee on rents and vacancies affecting the calendar year.” “With record applications and consumer loans by automating Reily says many fintech lenders every day.” far better outcomes for all parties,
Economics, Assistant Treasurer and commercial and office and retail Rate Money and its funding originations this year, Pepper Money enquiry through to settlement with such as OnDeck have embraced A review of the NAB customer’s says Piening.
Minister for Housing, and finally – sectors, with soaring demand for partners have heavily invested in maintained our industry-leading digital identity verification. the use of data in their lending home loan journey has focused “COVID pushed brokers to
and importantly – with the ACCC.” warehouse and logistics space driven credit, credit staff and processes. turnaround time of one business “Our broker network can expect decisions. on giving them greater flexibility accelerate digital strategies within
Felton says the improvement over by e-commerce growth and supply “We didn’t want our SLAs to day, illustrating how our unique us to continue supporting them to “By harnessing the power of data, and control by allowing more their businesses, or in some cases to
the year has been pleasing, but work chain restructuring. blow out to 20, 30 or even 40 platforms support scale to onboard offer alternative lending options in OnDeck has not only been able to self-service options. create them for the first time.”
still needs to be done. Arentz predicts the strength days as we’ve seen throughout a record number of customers with the most consistent, transparent and streamline loan applications; we Waugh says recent updates to Piening says commercial and
“Customers with similar of demand and rapid increase the industry, and they haven’t. speed and efficiency.” innovative ways,” says Saoud. have also been able to introduce the NAB app now enable a home asset finance lenders have typically
complexity of circumstances should in residential construction will We have remained in single Saoud says there are plans to Blethyn at NextGen.Net says the Lightning Loans, which we can loan customer to immediately fix been slow to adopt technology for
not receive different service levels eventually ease due to supply chain figures for every single product we enhance the Pepper Product Selector broker community is extremely decision in as fast as 30 minutes,” (or refix) their interest rate, amend identifying borrowers and signing
based on the channel they choose pressures, further labour cost offer, and that’s something we’re (PPS) tool and cloud-based solution open to new digital tools – anything he says. “We’re also one of the a direct debit, vary key aspects of a paperwork, but “we are already
to engage the lender with. We don’t escalation and rising land values. extremely proud of.” Pepper Resolve, targeting increased that’s going to make their lives and fastest in the country for unsecured loan, and work out how much equity seeing a move towards it”.
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“Businesses looking to diversify banks cannot say,” he says. self-regulated, which has delivered
will need to ensure they understand With credit growth running at great customer outcomes. CAFBA
the markets they are moving into, about 7% and annual property successfully campaigned years ago
and that is where education and market price growth of 20%, APRA’s to ensure responsible lending (RL)
mentoring will become increasingly tightening of loan serviceability did not apply to business lending,
important. CAFBA’s Education buffers from 2.5% to 3% for APRA- but Piening says over time elements
Council has been established regulated lenders was “probably of RL have crept into commercial
to ensure these needs are met. right to take some steam out of the finance, reducing accessibility to
Education and mentorship are vital engine”, says Bannister. finance for SMEs.
to ensure customers continue to “It might reduce borrowing limits “We support the proposed changes
receive the right outcome.” by around 5%. We think it’s more in RL and are campaigning for the
designed to be a ‘shot over the bow’ Senate to accept them.”
Industry regulations to signal to the market that things Commercial and asset finance
The biggest regulatory change in probably need to cool a little … if brokers are self-regulated, Piening
2021 was the introduction of the not the regulator has foreshadowed says, and this has delivered great
best interests duty. additional levers are available.” customer outcomes. CAFBA
“Whilst the best interests duty is While some banks want to extend is currently reviewing the self-
a significant change that was not the serviceability limits to non-ADIs, regulation model as it seeks to
easy to implement, it represents Bannister says the non-bank sector’s bring in a recognised professional
qualification for commercial and
“It is pleasing to see the lending asset finance brokers, similar to a
CPA or a CA.
“This is an exciting opportunity
industry as a whole continuing to for the industry, with a working
group looking at the opportunities
remain strong and gain momentum” available to us. Recommendations
Clinton Arentz, head of lending and property assets, Trilogy Funds Nick Reily, national channel and partnerships manager, OnDeck
Peter Vala, general manager partnerships and distribution, Thinktank will be provided to the board over
Peter Vala, Thinktank the next few months,” says Piening.
Mergers and acquisitions how similar their foundations are. an unquestionable positive for market share of 5% is not enough to Open banking NextGen.Net is excited to be rules are fit for purpose. the most consistent, transparent
There have been plenty of mergers It’s these shared values that form every consumer who obtains credit cause systemic risk, and it’s unlikely The introduction of open banking delivering open banking solutions While open banking has limited and innovative ways to meet their
this year, including NAB’s 86 400 the strong base for operating under assistance through a mortgage the regulator will act. in Australia last year, starting through ApplyOnline to its impact on commercial brokers, customers’ evolving needs.”
with UBank, REA Group with the one brand,” says Mitchell. broker,” Felton says. “In so doing, “This ensures borrowers that are with the big four banks, is a customers and users, Blethyn says; Piening says overall the benefits Waugh says the opportunity to
Mortgage Choice and Smartline, Reily says mergers and acquisitions the duty differentiates the mortgage creditworthy are not marginalised or game changer for the financial this will help the broker see a more will include differential pricing and diversify into commercial lending
Lendi Group with Aussie Home are to be expected as lenders look to broking offering from the credit turned into ‘mortgage prisoners’, as services industry. meaningful and accurate financial new products. is real, with strong momentum in
Loans, and People’s Choice with achieve economies of scale, but bigger assistance provided through lenders’ non-banks can appropriately provide “Open banking offers an picture of their client. “Customers with a good credit the regional and agricultural sectors
Heritage Bank. isn’t always better. proprietary channels.” credit at this time.” opportunity to streamline the Mitchell believes open banking history will be able to leverage their and increased capital city demand
Mitchell, who now leads both the “Scale can also mean losing the The MFAA also engaged with Vala says brokers will need lending process by addressing major will allow the broking industry to standing to a greater degree than in for equipment finance solutions to
Mortgage Choice and Smartline human touch that is so important regulators on behalf of the industry to consider ADIs’ tightening the past,” he says. support advanced manufacturing.
broker groups under REA Group,
says financial services businesses will
in the lending process. OnDeck’s
research shows that 60% of small
regarding remuneration changes,
reference checking, breach
policies, and APRA’s move to lift
serviceability rates, which is likely to “We see great opportunity in further Diversification
“Assets such as industrial
land and warehousing are also
always look for opportunities to scale businesses say a key driver of trust in reporting, remediation, and design result in reduced borrowing capacity While small businesses have in high demand. This increased
up and set their future direction. a lender is having people to speak to.” and distribution obligations. of about 5%. diversifying our loan book and struggled this year, as pandemic demand provides brokers with an
“At a time when there are plenty of Reily says this is why OnDeck Felton says the changes have “Debt-to-income limits could be restrictions ease and the economy opportunity to approach the needs
disruptor businesses, those that are takes a “high-tech, high-touch” ensured that the interests and implemented in the near future. It’s helping more brokers and developers rebounds, SMEs are looking to of their customers holistically, using
well established must be strategic approach, with BDMs selected expectations of brokers and important brokers work with lenders access finance, which is good news multifaceted funding solutions,”
to ensure their future place in the for their small business lending consumers are aligned, conflicts who are constructively aware of with niche projects” for brokers. he says. “Fast and easy access to
industry,” says Mitchell. experience and brokers encouraged have been mitigated and there is a these issues and their ramifications.” “There’s so much business funds is critical for small businesses
She says REA Group’s acquisition to reach out if they have queries. greater focus on information sharing Waugh says NAB welcomed Clinton Arentz, Trilogy Funds and growth potential among the as they bounce back.”
of Mortgage Choice is part of the Piening says mergers have been and reporting of misconduct. APRA’s move to increase the new and upcoming generation As the nation’s largest business
group’s ambition to accelerate its driven by technology, competition “This leaves our industry well minimum interest rate buffer, pain points for lenders, brokers and advance towards completely digital of underserved borrowers, the bank, NAB has hired an extra 134
financial services strategy and and the need for scale. New, nimble, placed to proudly and confidently and the bank has now begun to customers,” says Blethyn. brokers and brokerages. rebounding small business sector, SME bankers across 60 locations
create Australia’s leading retail tech-driven entrants have challenged face the impending 2022 review implement the changes. NextGen.Net research reveals Felton says it’s really important and the growing self-employed this year and introduced its Secure
broking business. the major players by demonstrating by the ACCC and Council of “We see this as a sensible change that brokers are most excited about that brokers were included in open market that are looking for Lend product, which allows small
“REA aims to deliver increased a different and more cost-effective Financial Regulators.” of policy considering the broader the data they can access, enabling banking to avoid a competitive products and options that are built businesses to borrow up to $2m.
value for brokers, customers and way to do business. Bannister says the impact of environment for house prices,” he says. them to engage with their clients disadvantage going forward. It was to accommodate their real-life Felton says commercial lending
business partners by leveraging “M&A is also likely at a broker BID has been neutral because Mitchell believes APRA’s earlier, to better tailor solutions, pleasing that earlier in the year, circumstances,” says Saoud. remains a significant opportunity
the vast consumer audience on firm level. We have already seen most brokers were already tightening of interest rate buffers is and to deliver ongoing services following three years of advocacy by As more consumers with for many mortgage brokers who are
realestate.com.au, as well as its activity in this space. This is likely to operating to a standard that met likely to have a modest impact. beyond home loan applications. the MFAA, Treasury acknowledged diverse financial backgrounds looking to diversify income streams
property market insights and data.” continue with brokers either looking BID requirements. “Brokers are likely to see the most “With mortgage brokers now the importance of including seek someone who understands and protect themselves against
Combining Mortgage Choice and to grow via acquiring competitors “We feel that BID will have impact occur for customers that are included as trusted advisers under mortgage brokers, followed by them and is willing to look at their possible future property downturns.
Smartline to operate under one that service the same markets as certainly played a part in supporting on the fringes of being approved for the CDR, it’s amazing recognition alterations to the open banking unique situation, he says brokers “Whilst MFAA data shows
brand and platform was a carefully them, or by acquiring broking growth as brokers can now say to home loans.” of the value they deliver and rules, which were originally too will become more vital. that more than 4,700 mortgage
considered move. businesses that service different their customers, ‘I must act in your Piening says BID does not will also give open banking the onerous for brokers to meet. “Our broker network can expect brokers are now writing
“The great thing about bringing market segments as they seek to best interests as I am obliged to apply to commercial and asset best chance of delivering better The MFAA will continue to work us to continue supporting them to commercial loans, this means
together these two businesses is diversify,” says Piening. by law’, and that is something the finance lending. The industry is outcomes for consumers.” with the Treasury to make sure the offer alternative lending options in there are in excess of 12,500 for
20 www.brokernews.com.au www.brokernews.com.au 21
FE AT URES
whom this remains an untapped years, targeting niche sectors, and Felton says the MFAA is 5% to 10% over the year.
diversification opportunity.” providing asset and commercial approaching 2022 with confidence As the Smartline and Mortgage
The MFAA offers its members the finance brokers with many and pride in the industry. Choice businesses integrate over the
most comprehensive support provided additional options for their clients. “As we prepare for 2022 and next 12 months, she says there will
by any association, Felton says. “Awareness of these new providers an impending regulatory review be significant milestones to achieve.
This year the MFAA ran its in the general business market is of broker remuneration, I believe “Change is difficult for people and
commercial education program limited, however, so brokers have the industry is in the strongest businesses at the best of times, and
virtually, covering all business and a key role to play in educating possible position to confidently whilst there are similarities, there
commercial lending. The program clients to consider options beyond face this scrutiny. are differences too. It’s about us
and webinars will continue in 2022. traditional channels,” says Piening. “We have incredibly strong taking the time to understand
“We’ve also produced two “Small businesses are going to industry data on our side – data what those differences are and
essential e-books for brokers new to require finance to rebuild their that demonstrates mortgage then working with the networks
commercial lending, and delivered businesses, employ staff and take brokers continue to support to identify how we bridge the gaps
several webinars,” Felton says. advantage of opportunities as competition and produce positive and move forward as one.”
Bannister says SMEs are the they arise.” consumer outcomes. It’s our firm Reilly says the OnDeck team, like
engine room of the economy, Arentz says non-bank lenders such belief there will be no case for all Australians, are looking forward
accounting for about 35% of as Trilogy Funds work in an agile change to remuneration in the to life getting back to normal.
Australia’s GDP and employing 44% way with brokers and developers, upcoming 2022 review.” “High vaccination rates should
of the workforce. and focus on a developer’s relevant Felton says the MFAA will make lockdowns less of a possibility
Given that the events of the last experience, reputation, business also be backed by the powerful in the future, and that’s good for
18 months meant an uncertain and quality and marketing plans. combination of the self- brokers, small businesses and
complex path to finance, La Trobe “We see great opportunity in regulatory and legislative reforms the broader lending community,”
Financial believes brokers are best further diversifying our loan book implemented over recent years, he says. “We are also excited
placed to help small businesses and helping more brokers and ensuring a strong position ahead of by the opportunity to partner
navigate that path. developers with niche projects such the review. with more brokers to fund more
Bannister says brokers will have as service stations, medical centres “We will continue our advocacy small businesses faster and more
opportunities to help thriving SMEs and disability accommodation.” Ryan Gair, CEO, Rate Money Sharon Piening, treasurer, CAFBA on behalf of the entire industry to efficiently than ever before.”
build their businesses and to assist Arentz says Trilogy Funds is ensure we have a level playing field.” Piening says CAFBA faces a
those needing to restructure to get well versed in both urban and Arentz says Trilogy Funds’ number of challenges, including
through a challenging period. regional areas across Queensland, lending team is excited to continue ensuring ready access to finance to
“Customers long remember who New South Wales and Victoria, through SMSFs will continue in “Fast turnarounds alone aren’t new tools that will offer some great “The process will enable greater to diversify its loan book with a assist businesses and individuals
helped them in their time of need.” with flexible funding solutions for 2022, providing brokers with a enough; we are relentlessly focused new efficiencies for brokers. use of technology, minimising wide variety of property projects to recover from the pandemic.
With La Trobe Financial offering developers needing fast finance. significant opportunity to diversify. on delivering fast turnarounds with NextGenID, a digital VOI potential for errors and rework, and across residential, commercial, CAFBA also wants to keep
a product suite covering residential, consistency and transparency in our service, will eliminate face-to-face professionalising the industry
commercial, SMSF, development, credit decisioning. onboarding and enable brokers to through self-regulation.
rural, aged care and non-resident; “We pride ourselves on weighing “We know how critical real-time capture and verify ID requirements “COVID pushed brokers to “Education’s role cannot be
removing barriers to entry for many approval confidence and credit digitally at point of sale. Access overstated. CAFBA welcomes new
specialised products; and providing an application on its merits. Small decisioning is to brokers, and we Seeker will give brokers upfront accelerate digital strategies within entrants to the market and will
customised training and education, have recently launched with a access to consumer credit help them satisfy their clients’
Bannister says the company is well businesses were struggling enough major aggregator – with our goal to information held by credit bureaus their businesses or, in some cases, expectations. We must continue
placed to help brokers diversify. continue rolling this out across the within the ApplyOnline application to guarantee our sector can
The lender anticipates a surge of
demand for commercial finance,
without us making it harder for them” aggregator industry.
“By leveraging existing and
and allow a broker to update and
refresh the information in real time.
to create them for the first time” assist borrowers.
“I’m looking forward to a year
especially light industrial properties. Ryan Gair, Rate Money future technology, streamlining Bannister says the broker Sharon Piening, CAFBA without lockdowns and working
“We experienced a steady demand processes, product innovation, and industry will receive a major boost closely with my clients to help them
for commercial SMSF loans secured Thinktank is known as a Looking ahead to 2022 strengthening our distribution on the back of COVID in 2022 provide faster processing times, industrial and retail sectors, and bounce back from COVID-19. It
against commercial property, commercial property lender, but “In line with Liberty’s ethos, we footprint over the next year, we’ll be and beyond. which is great news for brokers expand its geographic reach. promises to be an exciting and very
typically from SMEs looking to Vala says it has expanded its product continue to listen to feedback providing scalable and accelerated “We expect to see broker share and customers. “Not all lenders are the same. rewarding 2022!”
purchase the premises they operate offering to include residential and from our community, and we’re growth for brokers’ businesses.” continuing to grow, targeting the “NAB will continue to be the In addition to a competitive rate, Gair believes the industry will
their business from,” says Bannister. SMSF loans for PAYG, self-employed committed to exploring new ways Blethyn says she’s excited to 70% milestone, and we hope to see bank behind the broker.” I would also suggest working with a continue to see the strong resolve of
Piening says brokers are and SME borrowers. to help more people get financial,” see brokers in the driver’s seat as NBFI market share heading back Vala says the Thinktank team lender who has deep experience in the Australian people.
diversifying their businesses, One of the emerging trends Mohnacheff says. “And with some they continue to be consumers’ to 10% and beyond.” are optimistic about what 2022 the industry, funds available when “Due to the complexity of small
and with some being exposed to is the demand from SMEs and exciting new projects and increased number one choice and optimise Bannister says La Trobe holds for the industry and are you need them, personal service businesses’ financial situations
the risks of a limited number of the self-employed for residential capabilities in the pipeline, we look new technology to deliver a better Financial is looking forward to looking forward to working and the ability to tailor the loan throughout the past two years,
income sources, “it made to sense to lending products, he says. forward to getting digital with you in service to their clients. helping Australians achieve their alongside brokers in opening up to your project. I expect to see the demand for
create others”. “Although commercial did slow the new year.” “The technology available for dreams of homeownership and new opportunities for growth and “We are confident in our loan non-bank lending continue to
“CAFBA welcomes this marginally during 2021, it still Saoud says as Pepper Money brokers was so accelerated by financial independence. helping their clients strengthen product offering and look forward increase as it has done over the past
diversification but cautions against remained relatively solid, and we heads into its 22nd year of business COVID-19, which has meant the NAB’s commitment is to deliver and prosper. to continuing to fill those gaps in 24 months,” he says.
doing it haphazardly as it can lead to expect this to strengthen with border in 2022, the company has an broker proposition far exceeds a simple and digital home lending “Whether it’s about diversifying the construction lending space as “I’m interested to see how the use
poor customer outcomes.” and social restrictions easing further exciting opportunity to leverage its anything that they could have experience for both brokers and into commercial lending or accessible, reliable and experienced of technology continues to change
Piening says the CAFBA in 2022 … brokers who are able core competencies through data possibly imagined three years ago.” customers, says Waugh. seeking SMSF accreditation, construction funding specialists.” the landscape of lending. What I’m
Education Council can assist broker to provide lending options across insights and in-house technology. She says one of the most “We’re on track to make we encourage brokers to contact Mitchell says as property supply most excited to see is the hard-
businesses that are looking to commercial and residential will be “We have significant headroom exciting things to look out for unconditional approvals in less us via their aggregator or one increases and demand slows, working self-employed people of
diversify into a different market. well positioned for growth.” to extend, connect and grow our is NextGen.Net’s ApplyOnline than an hour the norm with our of our relationship managers to she expects price growth to slow Australia begin to prosper again
CAFBA has observed specialist Vala adds that growth in real-life loan options for even more Financial Passport, which includes new loan origination platform start a conversation about how we again in the first few months of after what has most definitely been
lenders emerging over the last two commercial property funding Australians,” he says. ‘NextGenID’ and ‘Access Seeker’ – two kicking off in early 2022,” he says. can assist,” says Vala. 2022 and overall prices to rise by a challenging 24 months.” AB
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