Borrowers have long selected mortgage brokers as their preferred means to obtain advice and apply for a loan. They’re now enjoying an even better experience with mortgage brokers in the current social distancing environment.
Over recent weeks there has been a distinct shift in the speed to market of banks accepting the use of technology which assists brokers in delivering a digitally enabled experience for their home loan customers.
These technologies have been available for some time and had been adopted to various degrees by lenders. However, there were still many lenders dragging the chain, advising brokers it may take years to introduce these changes.
COVID-19 and the nationwide restrictions changed this with many lenders introducing policy changes within weeks, instead of years.
Of these, the key changes have been the use of digital ID solutions such as ID You and using Zoom or Skype. There has also been a significant increase in the acceptance of digital signatures such as DocuSign.
These combined solutions are now enabling brokers to continue to deliver their clients a high level of personalised service and advice, provided through a quality digitally-enabled experience.
At the same time as brokers have been transforming their client services, our banks have been busy implementing a program of branch closures.
The Sydney Morning Herald reported that during 2019 all four major banks trimmed costs by closing hundreds of bank branches. On the 8th of May this year, the Commonwealth Bank (CBA) announced the temporary closure of a further 114 branches due to a shift in consumer behaviour.
The bank advised that during the COVID-19 pandemic, transaction volumes at CBA branches have dropped significantly with a large increase in customers doing their banking online.
A survey by the Boston Consulting Group (BCG) found customers doing more digital banking during COVID-19 say they’re highly satisfied with the experience, and this will flow into a permanent change in banking behaviour.
I expect this trend of branch closures will continue as, in addition to the change in customer preferences, when we look to overseas markets, BCG noted Australian banks have twice the number of branches per head of population than similar banking markets in Nordic countries and the Netherlands.
Furthermore, there has been a significant drop within our society in the use of cash, and this has resulted in more people using mobile banking more frequently.
COVID-19 restrictions have escalated the pace of change in both the use of technology and towards a shift from traditional bank branches to obtaining credit assistance from mortgage brokers.
Mortgage broker clients have always enjoyed a highly personalised service, which big banks and large corporations are simply unable to provide. Now, with the fast paced adoption of technology, brokers are fully digitally-enabled, delivering borrowers the best of both worlds – old fashioned customer service and the efficiency of a digital experience.
This is also great news for the mortgage broking industry as more customers are likely to continue to select this distribution channel as their preferred source of credit advice for home and commercial loans.