Self-employed lender RedZed has celebrated $5 billion in loan originations, with their managing director paying tribute to the broker channel for their role in helping them achieve that milestone.
Managing director Evan Dwyer spoke to Australian Broker to explain how RedZed had managed to secure its place among the biggest lenders to self-employed Australians, and how vital their broker partners were in helping them to get deals over the line.
“The broker channel is really important to self-employed borrowers,” he said.
“If you go back to the very beginning of home loan brokers in Australia in the early 2000s, they emerged through the paring back of bank branches in the 1990s. A lot of bank managers were the original brokers in Australia for home loans: self-employed people walked into the bank branch, said ‘help me out’, and the bank manager helped them out.”
“What has emerged over the last 20 years is that those self-employed borrowers are looking for that same relationship, but they can’t get it from a bank. Bank branches are just sales desks now and don’t have the lending authority. A lot of brokers have worked out that they can be that relationship for a self-employed person.”
“By definition, self-employed people are more interested in getting the job done quickly than spending hours and hours getting the best rate. If you’re a successful plumber or architect, you can earn more in two hours than you can save by going through 400 websites looking for something that’s 0.1% cheaper.”
“That’s what that self-employed borrower is looking for, and that’s where the broker can help them: they’ve got the experience to make life easier, and that’s what the customer is looking for. Someone to help them and do the right thing by them so that they can get on with doing whatever it is that they do.”
“It’s about having the whole organisation aligned to the customer segment, not just the marketing,” said Dwyer. “A lot of people advertised to self-employed, but in fact, that organisation is aligned towards quickly approving the simplest borrower.”
“For us, it’s about using a platform to develop a capability around how to process loans. When it comes to a scorecard, I’m not interested in scorecards that tells me how to tend to a teacher, I’m interested in one that gives me industry specific information and draws on our experience of lending to people in construction and IT for 15 years. It’s about getting better predictability around their probability of default.”
“What we’re trying to do as a platform is drive a better experience. With tech, of course you can do things faster. Instead of spending ten hours on a deal doing all the different searches, they can spend two hours and make it all about the decision.”
“That’s what makes it more productive: you still have a person making a decision, but the aggregation of data that they need to make that decision is done more productively.”
“The second thing is delivering the same customer experience that we used to be able to deliver when we were smaller, but at scale. All of our key customer measures, like turnaround times and time to answer calls, which we keep a fanatical eye on, stay true even though we’ve settled $200m in July. That tells me that the platform is enabling the delivery of the customer experience at scale.”
“Over time, what we can do is build, through credit, an expertise in how self-employed borrowers perform.”
