The future of finance is now

The next couple of years are set to be a testing time for the mortgage broking industry, but this presents an opportunity for a new era of diversification to emerge

CATCHPHRASES IN technology typically include speed, seamlessness, accuracy and convenience. Those who don’t embrace technological change are doomed to wake up one day to the realisation that they are slow, clunky, haphazard and incompatible. One silver lining of COVID-19 has been the wake-up call to the finance industry to provide better tech solutions, and the huge demand from consumers to continue using them, even as the economy moves to a post-pandemic space. “The pandemic magnified the ways in which fintechs have become more useful and accessible for the average consumer,” says MoneyPlace CEO Kylie Waldock. “Consumers had the time and resources to reassess their financial goals and readily access the information they needed to solve any financial problems they had.” This impetus started a cascade of change for fintechs that continues to reverberate now.

The advance in finance industry tech is eye-wateringly fast for some mortgage brokers. “Platforms and tech in the financial space are changing on a daily basis, with multiple options for lenders and providers to choose from when it comes to enhancing their own experience,” says McGrath. But most of these options make life significantly easier for end users. “Tech platforms have evolved considerably in recent years, creating an environment where consumers can easily compare rates and terms and conditions from all major lenders without having to visit an office or make phone calls,” says Waldock. “Increased competition in the market has only meant greater opportunities for consumers to find the finance solution that best suits them.” More tools for brokers Brokers are reaping the benefits of these developments too. Take OnDeck’s KOALA Score™ for instance. Launched in 2021, this is an innovative risk-predicting credit model believed to be unique in the Australian market. It uses a sophisticated blend of big data, predictive analytics and statistical techniques, in combination with data from multiple credit reporting agencies, including illion and Equifax, to support more tailored risk assessment for Australian small business lending.

Looking ahead Poolman sees the need for tech-enabled solutions to grow over the next few months in particular. “As we head towards the final quarter of the year, small businesses will be rapidly gearing up for the end-of-year festive season – the peak trading period of the calendar,” he says. “This offers valuable opportunities for brokers to explore commercial lending if they haven’t already diversified into this area.” Likewise, MoneyPlace is committed to continuing to explore the possibilities for automating and digitising the application and assessment process as much as possible.

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Such innovations save the broker from duplicating work and allow a range of options to be easily placed in front of the customer. The time savings generated can be used by brokers to increase their footwork in the market and generate the next lead. Using more tech also boosts accuracy, which has led to fewer loan applications getting kicked back to brokers due to missing or mistaken paperwork. Across the industry, conversion rates improved in tandem with the introduction of more technology as the pandemic unfolded.

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Personal loans are often a gateway that brokers can use to later expand the services they offer to a client, due to their versatility in complex lending scenarios such as helping customers with a deposit gap, or even assisting first home buyers to get into the property market. “Brokers have a unique opportunity with personal loans to be able to provide customers with an ongoing relationship,” says Waldock. “A personal loan may only be the start of a broker’s financial relationship with their customers and can often lead to increased opportunities to help the customer with things such as mortgages, car finance, asset purchases and so much more.” MoneyPlace is part of the Liberty Group and uses a fast, online-only application process that enables settlement to occur typically within one or two hours of submission. Tech is also essential to post-pandemic working norms as customers and brokers alike embrace WFH. Recruiters in the mortgage broking space report that over 95% of applicants for broking jobs now require an average of two days a week working remotely. Many loans are now processed entirely remotely with the client, broker and lender never actually meeting in person.

OnDeck Australia is a leading online lender that focuses on Australia’s small business community. As OnDeck only provides small business loans, it is an expert in an area that has been underserved by the banking sector for too long. Importantly, OnDeck offers a skilled and experienced team, each of whom have been hand-selected for their understanding of the needs of small enterprises.

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To be sure, tech can seem relentless and overwhelming at times. During the height of lockdowns last year, polls showed that keeping up with tech-related training was a major concern for many brokers. But once new systems are learned, the main concerns of brokers tend to revert to more traditional worries related to compensation. McGrath says tech challenges are common across most industries, not just in the finance world. The key is for businesses to know their own needs and respond appropriately. “Having a strong strategy and focus on your core business will allow any business to work out what tech is needed to support that focus.”

MoneyPlace is a technology-focused personal lender, offering Australian borrowers both secured and unsecured personal loans for up to $80,000. The MoneyPlace product offers some of the lowest rates on the market, starting at 5.74%, while allowing the customer to select from three-, five- or seven-year loan terms that can be used for almost any loan purpose. Employing a highly efficient platform, all loans are submitted via a fast, online-only application process that enables MoneyPlace to typically settle loans within one to two hours from the time of submission.

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“The element of speed can make a significant contribution to profit margins and bottom-line results”

Cameron Poolman, OnDeck

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“Customers and referral partners are looking for choice, and lenders that provide an easy, seamless experience along with great customer service and a strong and varied product suite will set themselves apart in an extremely competitive environment,” says Nick McGrath, Moneytech chief executive. Some factors driving the adoption of new technology include the search for efficiency as staff shortages mean more work must be done with fewer people; the need for speed to allow brokers more time for value-added work versus routine paperwork; and the normalisation of working from home.

“Platforms and tech in the financial space are changing on a daily basis, with multiple options for lenders and providers to choose from”

Nick McGrath, Moneytech

Nick McGrath

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Cameron Poolman

OnDeck

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Cameron Poolman has served as OnDeck Australia's CEO since the company's launch to the Australian market in November 2015. Prior to joining OnDeck, he was founder and CEO of GraysOnline, one of Australia's largest e-commerce groups focused on small businesses, from 2000 to 2014. He holds a Bachelor of Engineering (Mechanical) from the University of Sydney and a Master of Business (Marketing) from the University of Technology, Sydney.

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Nick McGrath is Moneytech’s CEO. In 2016, McGrath joined Moneytech as head of sales and became CEO in 2019. He was previously head of sales, trade and debtor finance at Bendigo Bank and international trade finance manager, institutional banking and markets at CBA, and has over 15 years' corporate banking experience in working capital solutions.

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Moneytech’s new platform also makes the borrowing process more efficient for brokers. The portal provides a complete dashboard view of business that referral partners have submitted to Moneytech. “[It] allows a broker to submit one application, which will provide a multi-product pre-approval for customers,” says McGrath. “This allows the broker to provide piece of mind to the client and provide additional solutions that they may have had to do multiple applications to multiple lenders for,” he says.

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Kylie Waldock

MoneyPlace

Kylie Waldock joined MoneyPlace in May 2022 as its new chief executive. Waldock brings to MoneyPlace a wealth of knowledge from almost 20 years of experience across various roles in the finance industry. She has developed strong strategy and operations skills and brings valuable insights to the company. Since coming on board at MoneyPlace, Waldock has been hands-on and supportive of the team to reach some incredible milestones. Her keen focus on creating a positive and impactful experience for customers, brokers and staff creates an environment that encourages the broader team to improve continuously and relentlessly.

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Source: MFAA Intelligence Industry Service, 13th Edition; 1 April–30 September 2021

Oct 2019– Mar 2020

68.7%

Brokers’ loan conversion rates on the rise

“The pandemic magnified the ways in which fintechs have become more useful and accessible for the average consumer”

Kylie Waldock, MoneyPlace

69.1%

72.2%

81.2%

Apr 2020– Sept 2020

Oct 2020– Mar 2021

Apr 2021– Sept 2021

“The strength of KOALA is that it underpins an incredibly easy loan application process,” says OnDeck chief executive Cameron Poolman. “Brokers simply need to upload six months’ worth of a small business’s bank statements to OnDeck’s secure online portal, and a funding decision can be made in as little as one hour.” While it’s possible to secure funding by other methods, the chances are that any broker using the KOALA system will have helped out three or four other customers in the meantime. The ability to secure this kind of lending with minimal resources is of major significance for newer enterprises, sole traders and partnerships, which typically do not have the substantial volume of trading data required by traditional lenders. Efficiency gains lead to cost savings and higher productivity per broker. KOALA has also driven the launch of OnDeck’s Lightning Loans, unsecured small business loans for up to $150,000 that can be assessed in as fast as one hour, with funds delivered to approved applicants in as little as two hours.

Speed of turnaround is a bonus even if the loan is declined, as a modified application can be submitted faster, or an alternative lending channel sought. Small businesses are said to live or die based on how quickly they can react to changing circumstances in some cases. “The element of speed can make a significant contribution to profit margins and bottom-line results,” says Poolman. “Brokers can now help their small business clients seize opportunities for growth when they arise.” Another area seeing significant benefit is personal loans. “Fintechs are changing the game for personal loans and finance, with a host of innovative solutions that brokers can leverage to solve tricky lending scenarios,” says Waldock. “The advancements to the MoneyPlace assessment process have meant that we are able to get a more accurate representation of the customer's broader credit history, which enables us to provide faster, more accurate rates.” MoneyPlace has helped over 23,000 people get personal loans.

Flexible working becoming common practice for brokers

Source: Fuse Recruitment, August 2022

Moneytech is the original fintech! Founded in 2003, it has been servicing the business community with lending, foreign exchange and payments under the Moneytech brand and its partner Monoova. Moneytech is Australia's only non-bank financial institution that offers finance, payments and FX capabilities, and this puts the lender in a unique position to help SMEs, which are the growth engine of Australia. Moneytech’s working capital solutions, access to market-leading FX, and enterprise-level payments platform give its customers control over their cash flow and payments, saving time and money so they can concentrate on doing what they love.

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Nick McGrath

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Kylie Waldock

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Kylie Waldock

MoneyPlace

Kylie Waldock joined MoneyPlace in May 2022 as its new chief executive. Waldock brings to MoneyPlace a wealth of knowledge from almost 20 years of experience across various roles in the finance industry. She has developed strong strategy and operations skills and brings valuable insights to the company. Since coming on board at MoneyPlace, Waldock has been hands-on and supportive of the team to reach some incredible milestones. Her keen focus on creating a positive and impactful experience for customers, brokers and staff creates an environment that encourages the broader team to improve continuously and relentlessly.

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95%

Broker job applicants seeking WFH or hybrid roles

Broker job applicants seeking WFH roles

10%

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