A mortgage broker has urged others to consider the benefits of digital lenders, whose untraditional processes can help accelerate application times in a variety of scenarios.
Alex Gee (pictured above), director of Brisbane brokerage Kingfisher Finance Group, said he was initially apprehensive about using digital lenders such as ubank because of their reliance on internal systems but decided to give them a go after finding the right lending scenario.
Gee said his clients were able to interact directly with the lender's systems, linking their bank statements, and ubank’s software was able to instantly interpret a client’s income and expenses over a specific period. This data was used to calculate the client’s borrowing capacity.
“Often it can be a time-consuming process to decipher a client’s income and expenditure accurately,” Gee said. “ubank’s software removes a lot of the heavy lifting that brokers will usually go through.”
Gee's recent LinkedIn post lauds ubank, which recently won the MFAA Fintech Lender Award after a clean sweep across all state awards, for its performance in two recent applications.
One involved a swift 24-hour formal approval for a refinance with debt consolidation and cash out for investment, while the other showcased a fully assessed pre-approval achieved within hours, enabling the client to confidently participate in an auction.
“My initial experiences with ubank have highlighted that in this day and age, clients are more than happy to follow a digital lender’s intricate process, as long as you explain it clearly and outline what the benefits will be,” Gee said.
“A critical takeaway is to ensure client communication is where it needs to be pre-application and the client is well aware of the process before jumping in, rather than surprising them with endless requests during the application.”
Australia’s digital banking scene has exploded in recent years, with some boasting fast processes, low rates, and loan approval times under an hour.
Customers are embracing these digital options, with a recent Mozo survey of 1,266 borrowers revealing that 60% of home borrowers now consider online lenders instead of traditional banks.
Gee said while some established banks such as NAB and Macquarie historically offer very quick turnarounds, having alternative options was “invaluable”.
“Looking ahead, there is always going to be a significant focus on turnaround times, especially when assisting clients to purchase in competitive markets,” Gee said.
“Often, clients may have tight deadlines, such as a seven-day window to secure their finance. Moreover, when assisting clients in New South Wales, we will only have a cooling-off period of five days. This underscores the constant importance of time pressure in the mortgage process.
“Digital lenders such as ubank may often require fewer supporting documents, which helps relieve the administrative burden on brokers.”
Of course, Gee is quick to point out that turnaround time is not the only consideration.
“We have a best interests duty to our customers so there will always be a large array of factors we need to consider when recommending a lender,” he said.
“In saying that, if I only have seven days for formal approval, straight away I'm crossing out half the lenders on my panel. You learn very quickly which banks can and can’t deliver within the shorter time frames.”
Established in 2008 as Australia’s first digital bank, ubank has made significant strides towards being seen as a major player in the mortgage space.
A particular area of growth has been its business development team, which Gee said made a difference to his experience.
Business development managers are an essential part of the process through broker channels, and it’s increasingly becoming crucial to maintain a healthy relationship on either side.
“My BDM has been workshopping different lending scenarios over the past 12 months, but I just didn’t have the perfect application to test the waters with ubank,” Gee said.
However, the persistence of ubank BDM Naomi Sekeres eventually won Gee over.
“Honestly, I think Naomi’s biggest compliment is that she continued to converse with me and run through different scenarios even though I hadn’t sent her a deal before. The persistence certainly paid off,” Gee said.
As more customers become accustomed to digital processes, Gee urged brokers to consider giving digital lenders a shot.
“Obviously, you want to make sure it’s the right fit for the right client and you're comfortable recommending them for that scenario,” he said.
“But in saying that, now that I've been through the process a couple of times, moving forward there's going to be less hesitation because the experiences I've had so far have been really good.”
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