Westpac has ramped up the digital banking arms race with the launch of its 10-minute digital mortgage.
The simplified digital process will be introduced in the last quarter of this year, initially to select customers applying for Westpac’s basic Flexi First Option mortgage, then will be rolled out to more customers next year.
Westpac’s move was in response to increased competition in the digital sector, with lenders such as Tic:Toc, Nano, OneTwo Home Loans, and ubank shaking up the market by offering simple application processes and fast approval times, RateCity.com.au reported.
Big bank rivals CBA and NAB have already risen to the challenge. In January 2021, NAB rolled out a streamlined application process that to date has unconditionally approved 35% of eligible customers in less than an hour, with 50% approved within 24 hours. CBA’s new digital platform, Unloan, launched in May of this year, boasts a 10-minute application process.
Sally Tindall, RateCity.com.au research director, said that while the banks engage in a digital arms race to compete for new businesses, the borrowers will be the biggest winners from the battle.
“For decades, the big banks have held on to cumbersome legacy systems and lengthy application processes at the frustration of customers,” Tindall said. “That’s all changing thanks to the entrance of a handful of tech-savvy lenders, which have challenged the status quo. Tic:Toc has been leading the way in the tech-driven mortgage market for years, alongside Macquarie, which is known for its speedy approval process. More recent entrants such as Nano and OneTwo Home Loans, which is backed by ANZ, have also helped push the digitalisation agenda. The big banks’ processing times came under fire at the start of COVID when the logistical challenges of lockdowns and a surge in new lending and refinancing blew out their already sluggish approval times.”
To “fight fire with fire,” Tindall said the banks are investing in new digital platforms and spring cleaning their backend systems to deliver faster, less stressful experiences for customers.
“Westpac might be a bit late to the party, but the bank has shown it plans to be a serious contender in the digital home loan space,” she said. “A 10-minute home loan process is a sought-after service for customers looking for certainty in a property market that’s changing by the day. This new offering will also appeal to complacent borrowers who’ve put the tedious job of refinancing in the ‘too-hard basket’ and kept it there for years.”
Tindall also noted that many fast-tracked home loans are only for select borrowers.
Other lenders offering fast application/approval processes for eligible customers, include Bendigo Express (powered by Tic:Toc), Nano, Macquarie Bank, OneTwo Home Loans, Tic:Toc, ubank, Unloan, and Up (powered by Tic:Toc).
