Broker market share could go as high as 80% in the next decade as the Australian mortgage market adapts to new regulations and advancements in technology, according to the CEO of one of the mortgage broker peak bodies.
Peter White AM, CEO of the Finance Brokers Association of Australia (FBAA) said that the combination of old school broker fundamentals such as customer service and choice of lenders, allied with tech improvements in Open Banking could see the channel hit 70 or 80% within a decade.
The other mortgage broker peak body, the Mortgage and Finance Assocation of Australia (MFAA) recently released data suggesting that broker market share had smashed previous records, jumping 6.8 percentage points in the last year and 12% compared to 2019.
Peter White was confident that brokers would be able to back up these numbers and grow them yet further.
“It’s a great sign, but the reality is that you’re only as good as your last showing,” he said. “We have to back up and keep going.
“The reality in my mind – and I’m not putting the industry down, because I love this industry I’ll support it until I’m buried in the ground – is that Covid played an impact on this.
“People couldn’t get out, they couldn’t go and see a banker, so what they did was talk to their broker and do things online. That has had an impact.
“Brokers have never been busier, so there was always going to be an increase in the level of loans written. What we have to see now is if the data falls back again.
“I hope it doesn’t. I hope it plateaus and then gets ready for the next jump. The research we’ve done shows how satisfied borrowers are with brokers.”
The FBAA released data last week that was excellent reading for brokers: 98% of customers who used a broker would use them again.
“This data talks to people who have used a broker, and the vast majority say that they are going to do it again,” said White. “You assume that will stabilise the market share.”
“We can reach 70% and could probably reach 80% in the coming years. Open Banking will create a huge advantage for mortgage brokers across Australia because of what it delivers.
“Mortgage brokers act under Best Interest Duty, and that play into their hands: if they do the right thing and make sure they take care of their customers, they’ll win this hands down.
