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A heated statement by emerging fintech Hero BroKer has accused major aggregator groups of working together and stacking the deck against newcomers to the industry.
In a submission to the Productivity Commission’s Inquiry into Competition in Australia's Financial System released last Wednesday (27 September), Clint Howen, founder of Hero BroKer, called upon the commission to examine the role that aggregators play in the market.
He recounted his experiences with the major aggregator groups, claiming that Hero BroKer was denied entry into the market despite meeting the Australian Securities and Investments Commission's (ASIC's) compliance regulations. He claimed that there was a “collective discussion” between key figures within the mortgage industry to protect themselves.
“We at Hero BroKer have operated in a compliant and legal manner, and this is recognised by ASIC. However, our competitive edge was prevented from entering the market from powerful mortgage groups,” Bowen wrote.
While first being welcomed by AFG, Bowen said the aggregator made an about-face and eventually terminated its contract with the fintech. Other aggregator groups later said they had been “told not to work” with Hero BroKer.
In response to Australian Broker's request for comment, an AFG spokesperson said the aggregator “decided that Hero BroKer’s business model did not align with our own and we did not wish to work with Hero Broker.”
“There is no aggregator conspiracy and AFG wishes Hero BroKer well in their business endeavours,” the spokesperson said.
Bowen suggested otherwise in his submission, claiming that aggregators were using their power within the industry to reach beyond their purview of providing a service and were instead "actively shutting down" newcomers who they perceived as a threat.
