“Client expectation today versus three or four years ago is just totally different. You know, during that COVID period we had some blowouts; everyone understands that. But that expectation is very different now”

DARREN LITTLE,SMARTMOVE PROFESSIONAL MORTGAGE ADVIS0RS

“The lenders who can consistently deliver quick turnarounds and a common-sense lending approach are the ones who are winning our loyalty. It’s not just about the products any more; it’s about the entire service package”

SARAH THOMSON,LOAN MARKET GEELONG

“We need to be looking at this [AI] technology and incorporating it, making sure that we are not doing it from a place of fear and [instead] doing it from a base of being solid and clear and having a long-term strategy”

RENEE BLETHYN,NEXTGEN

In Partnership with

Bridging the divide to ensure broker value outperforms

As mortgage brokers grapple with rising costs and client expectations, they’re calling for lenders to step up with meaningful tech solutions and genuine partnerships

Read on

Renee Blethyn

NextGen

Theo Chambers

Shore Financial

Will Foster

Foster Finance

Darren Little

Smartmove Professional Mortgage Advisors

Industry experts

Nextgen is Australia’s leading technology provider to the lending industry, pioneering state-of-the-art solutions from loan application through to processing and settlement. It has a company mission of making lending easy by providing lenders, aggregators and brokers with easier and more efficient ways to deliver for their customers. 

Find out more

Renee Blethyn, an inspirational leader with over 20 years in financial services, is renowned for her communication skills and consistent success across various roles. Her experience spans retail banking, mortgage lending and strategic management. As head of broker partnerships at NextGen, Blethyn drives broker priorities into company strategy, utilising the ApplyOnline platform to support the broker community. Passionate about financial literacy, especially for women, she believes it’s fundamental to a fulfilling life. Blethyn’s dedication to advancing financial services and empowering individuals through technology and education makes her a standout figure in the industry.

NextGen

Renee Blethyn

Theo Chambers, co-founder of Shore Financial in 2013, transformed the company from a modest $5 million monthly operation to Australia’s #1 Independent Brokerage, processing over $300 million monthly with 110+ staff. Under his leadership, Shore Financial has garnered numerous accolades, including Best Brokerage in Australia eight times. A frequent industry speaker and podcast host, Chambers shares his insights with leaders in finance, real estate and banking. His entrepreneurial spirit extends beyond mortgage broking: he built an education business to become Australia’s second-largest education aggregator. Chambers’ business acumen, instilled by his family of entrepreneurs, drives his success in motivating and inspiring teams to achieve excellence in their respective fields.

Shore Financial

Theo Chambers

Will Foster, a seasoned financial services professional since 1999, transitioned from a major bank to mortgage broking in 2004. As the founder of Foster Finance in Sydney, Foster has assisted thousands of clients in achieving their property and investment goals. His expertise spans first home buyers, bridging loans, loan refinancing and owner-occupier loans. Foster specialises in advising on tax-effective finance structures, securing loans exceeding $750,000 for diverse clientele and restructuring existing loans for optimal efficiency. Known for his ability to negotiate competitive rates and fees, he acts as a crucial intermediary between clients and lenders. His passion lies in helping clients structure their finances cost-effectively, ensuring a smooth, stress-free property-buying experience.

Foster Finance

Will Foster

For Darren Little, leading the way in the industry has been part of the Smartmove DNA since inception. The business has evolved from a boutique brokerage to one with a national presence and international operations in the Philippines and Nepal. Over the past decade at the helm of Smartmove, Little has leveraged his 35-year financial services background to forge lasting client relationships and nurture employee growth. His expertise was honed during his tenure as head of mortgage broker services at the St. George Banking Group. Now serving as general manager – lending at Viridian Financial Group (VFGL) following a 2023 merger that led to Smartmove becoming the specialist lending service of VFGL, Little continues to shape the industry. Known for his passionate leadership style, he focuses on creating opportunities for others and driving organisational success in the competitive financial services landscape.

Smartmove Professional Mortgage Advisors

Darren Little

In Partnership with

Fighting for the customer

The customer owned a bank saw a huge boost after the Hayne Royal Commission. One year on and their market share is growing as customer continue to see their value.

Read on

Christopher Lee

MFAA head credit adviser, Finsure Finance and Insurance

Stewart Saunders

Heritage Bank

Darren McLeod

Beyond Bank

Fernando Leos

Bank Australia

Industry experts

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Bank Australia

Fernando Lemos

Beyond Bank

Darren McLeod

Heritage Bank

Stewart Saunders

MFAA head credit adviser, Finsure Finance and Insurance

Christopher Lee

In Partnership with

Fighting for the customer

The customer owned a bank saw a huge boost after the Hayne Royal Commission. One year on and their market share is growing as customer continue to see their value.

Read on

Industry experts

Beyond Bank

Darren McLeod

Heritage Bank

Stewart Saunders

MFAA head credit adviser, Finsure Finance and Insurance

Christopher Lee

Bank Australia

Fernando Lemos

The lender divide

Published 11 Nov 2024

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Nathan Smith

Birdie Wealth

Sarah Thomson

Loan Market Geelong City

Nathan Smith is the entrepreneurial mind behind Birdie, an expanding financial and property services group. In 2017, he founded Birdie Wealth, an award-winning mortgage brokerage known for its personalised approach. Smith’s vision led to the launch of Birdie Conveyancing in 2020 and Birdie Property in 2023, co-founded with Kate Phillips. Drawing from personal experience as tenants and investors, they prioritise client needs in property management. Beyond his business ventures, Smith is committed to philanthropy, actively supporting the Enough is Enough Anti-Violence Movement. He measures success not just in financial terms but through the impact of his work and time spent with family.

Birdie Wealth

Nathan Smith

Sarah Thomson, a seasoned broker with 18 years of experience, has amassed numerous industry accolades throughout her career. Known for her modesty despite her impressive achievements, Thomson prioritises creating a culture of trust in her business. With a team of 21, she offers comprehensive financial services, including home, investment, personal, car and business loans. Thomson’s approach is to genuinely care for her clients, taking time to understand their goals before guiding them towards success. She finds immense satisfaction in providing personalised service, particularly in alleviating stress associated with major financial decisions. Thomson’s passion lies in helping people realise their dreams through expert financial guidance.

Loan Market Geelong City

Sarah Thomson

Simultaneously, brokers are grappling with increasing operational costs on the back of lingering high inflation. “I think from a business perspective, we’re facing the same difficulties that consumers are, and there are pressures on the costs that are coming into the business,” Thomson explained. This puts brokers between a rock and a hard place in terms of running the business. “The difficulty is, as brokers, we can’t raise the commission rate at which we’re paid on loans, so we just have to settle more loans to generate more revenue to cover those costs.” Brokers are left with two options: accept lower profit margins or increase efficiency. “I think as a whole industry you could say the cost of doing business has gone through the roof, and revenue’s going the other way,” Smith said. “So that margin squeeze is a real issue.”

The flipside of the positive effects that technology can have on the industry is illustrated by the growing threats around cybercrime in finance. Brokers are attractive targets for hackers, and simple human error is often a key contributor to security breaches. Data security concerns loom large, as evidenced by the rising incidence of financial crimes involving digital payments. According to a recent LexisNexis Risk Solutions study, 46% of organisations reported an 11–20% increase in such crimes over the past year, while a further 19% reported more than a 20% increase. The vast amount of personal and financial data that brokers handle has made cybersecurity critical. “As brokers, we’re really privileged with the amount of information we do hold on behalf of our clients, and it staggers me,” Little said. “To this day, a lot of our business partners, predominantly banks, still want us to be emailing in documents to BDMs. They won’t accept even password-protected documents because it doesn’t go through their OCR [optical character recognition] facilities. It’s crazy [because of] the level of information we have and what we’re sharing and in the manner we’re having to share.” Little’s comments highlight a disconnect between sensitive data handling and outdated submission methods, increasing the risk of data breaches and creating inefficiencies. Mitigating these risks requires a multifaceted approach. Robust cybersecurity measures, regular staff training and adherence to stringent data protection protocols are crucial.

While the industry is clearly moving towards greater technological integration, there’s also a strong emphasis on maintaining the human element that sets brokers apart. This sentiment was echoed by Little, who emphasised the unique value that brokers bring: “There is that uniqueness about human beings that can’t be replaced.” Despite the challenges, brokers remain optimistic about the potential for technology to improve their businesses and client outcomes.

Chambers pointed out other challenges of implementing AI: “The problem with it at the moment is, firstly, certain people have issues with the information being shared on an AI platform. And secondly, we’re struggling to integrate with third-party platforms for a proper two-way API with full data sets.” Expectations are higher for the impacts that AI will have on financial services than in many other industries, particularly in terms of automation or augmentation of regular work tasks. A recent Accenture report showed that up to 68% of working hours in the global banking industry are in scope for automation or augmentation by generative AI.

Artificial intelligence is a technology that brokers are watching closely but with some trepidation due to how quickly the playing field is changing. “AI is somewhat keeping me up at night,” Smith confessed. “I don’t feel that I’m adopting it quickly enough in my business.” However, like any new technology, apprehension is not a positive framework for tackling the challenges. “We need to be looking at this technology and incorporating it, making sure that we are not doing it from a place of fear and [instead] doing it from a base of being solid and clear and having a long-term strategy so that we are aware of consequences with parts that we don’t know,” said Blethyn. NextGen is exploring AI’s potential for various solutions and has already incorporated it in its open banking products. Blethyn said the aim was to make the service “really speedy, clever, smart [and] accurate … from both [a broker] perspective in terms of when brokers are sitting in front of the client, getting that picture in an instant and getting that as accurate as possible, but then also from the lender perspective, being able to ... categorise and recognise patterns in transactions”.

This level of certainty gives brokers the confidence to present solutions to clients, especially in challenging cases. “Being able to talk to a client who’s been knocked back two or three times and say, ‘Well, I’m not going to submit that application until I’ve got a pencil sign-off from someone who has a pen and sign-off’ – that gives them so much confidence,” Foster added.

Little added that “client expectation today versus three or four years ago is just totally different. You know, during that COVID period we had some blowouts; everyone understands that. But that expectation is very different now”. While measures such as Net Promoter Scores have improved markedly at some institutions in recent years, client satisfaction levels vary widely across financial services. The need for better service is driving brokers to seek out lenders with streamlined processes and efficient technology. Will Foster, director at Foster Finance, highlighted NAB’s credit coach program as an example of a lender providing the certainty that brokers crave.

“It’s not just about them broadcasting information to us. We need lenders who are willing to sit down, listen to our challenges and work collaboratively to find solutions.” This communication extends beyond just policy updates or product information. Brokers are looking for lenders who are willing to engage in meaningful discussions about the challenges and opportunities in the industry, and who are open to feedback and collaboration. The third key factor – speed – is becoming increasingly critical as client expectations shift. “The expectation is that it shouldn’t take two weeks to get an approval,” Smith pointed out. “That’s not what their lifestyle is about any more. They want quick, speedy results. They want to go to auction in a day, and they expect to be approved on the day.” Sarah Thomson, director at Loan Market Geelong, added that speed is often the deciding factor when choosing between lenders with similar offerings. “If they’ve got the same rate as another lender, best interest duty is met, and we know it’s going to be approved quicker and seamlessly through this lender, they’re definitely getting more business.” Getting it right has a significant impact for both broker and lender. “The lenders who can consistently deliver quick turnarounds and a common-sense lending approach are the ones who are winning our loyalty,” said Thomson. “It’s not just about the products any more; it’s about the entire service package.”

While certainty is crucial, it’s not enough on its own. Brokers are calling for regular, meaningful communication from lenders. But importantly, they want this communication to be a two-way street. Nathan Smith, director of Birdie Wealth, boiled down broker needs to three key factors: “We want certainty. We want communication from the bank. We want speed. “We want them telling us what’s changing on their end, but [we want them] also listening to us around what’s changing in our businesses,” he explained. This two-way dialogue is essential for building true partnerships between brokers and lenders.

Darren Little, general manager – lending at Smartmove Professional Mortgage Advisors, sees a clear split emerging among lenders. “We’re seeing some lenders that are absolutely hell-bent on understanding our business, our clients’ needs and working with us,” he said. “Then there’s some other business partners that tell us what’s going to help them make their life easier, but don’t actually understand the impacts on the client or the broker.” This sentiment is echoed by other brokers, who are increasingly frustrated with lenders that pay lip service to partnership while prioritising their own channels. “Some of these banks are turning up at our offices and industry events, pretending to support the industry, but meanwhile there’s channel conflict and they’re telling their direct channels that they can do things that brokers can’t. It’s very frustrating,” said Theo Chambers, chief executive at Shore Financial. “It’s like they’re playing both sides of the field, and we’re caught in the middle. We need lenders who are genuinely committed to the broker channel, not just when it suits them.” This division is becoming increasingly pronounced. “It’s probably more prevalent today than ever in the last 10 years that I’ve been a broker,” said Little. “The distinction lies not just in the tools and services offered but in the fundamental approach to the broker-lender relationship.” The result is a growing rift between lenders who genuinely seek to understand and support brokers, and those who view brokers as simply another distribution channel to be managed.

Industry leaders point out that while some lenders are genuinely collaborative, others prioritise their own interests, often creating conflict. Brokers need better communication, faster approvals and more reliable technology to help them manage the rising demand for speed and certainty in the lending process. Although technological advances like open banking and AI have been slow to live up to their promise, brokers remain hopeful that with the right support from lenders and aggregators, they can evolve into proactive advisers who add even greater value to their clients’ financial decisions.

“We need lenders who are genuinely committed to the broker channel, not just when it suits them”

THEO CHAMBERS, SHORE FINANCIAL

MARATHON RUNNERS are keenly aware of their position in the field, and conditions around them, as they approach the middle of a race, partly because of the importance of the ‘negative split’ – meaning they perform better in the second half of the race than the first. Mortgage brokers today find themselves approaching such a juncture, with clients’ higher expectations setting an increasingly demanding pace. Clients want quick decisions, transparent communication and seamless execution – all conditions that good mortgage brokers strive to provide. But at the same time, many brokers are concerned about a growing divide in their relationships with lenders that may jeopardise their ability to deliver. Those who can’t keep up the pace risk falling behind, while the most successful brokers and lenders will be those who can quickly adjust to the environment and finish strong. On one side are lenders that prioritise genuine partnerships, working closely with brokers to meet client needs. On the other are lenders that are more concerned about their own direct channels, leaving brokers frustrated by a lack of understanding and support. This crossroads is facing pressure on all sides – due to rising costs, evolving client expectations and technological disruption. Senior managers at industry technology partner NextGen recently met at Cafe Sydney restaurant with Australian Broker and a group of mortgage brokers and financial services experts to discuss related issues in the mortgage broking industry and borrower markets.

What brokers want: certainty, communication and speed

Average NPS ratings in financial industry

Financial services overall

Net Promoter Score*

Change from previous year

Banking

+10

Loans – mortgage

-12

Loans – car

-11

*NPS rating above 0 = good; above 20 = favourable; above 50 = excellent

Source: Perceptive NPS industry benchmarks for Australia report, 2022

Loans – personal

The tech opportunity and the human factor

“[Saying to a client], ‘Well, I’m not going to submit that application until I’ve got a pencil sign-off from someone who has a pen and sign-off’ – that gives them so much confidence”

WILL FOSTER, FOSTER FINANCE

Source: Accenture Work, Workforce, Workers: Reinvented in the Age of Generative AI report, 2024

Insurance

36%

29%

Banking

35%

33%

Capital markets

42%

30%

Working hours automated

Working hours augmented

Portion of working hours likely to be automated or augmented by GenAI

67%

68%

72%

Total

Cybersecurity as a growing concern

Rising business costs squeeze profitability

Another recurring theme was the need for greater standardisation across the industry, as it sometimes seems there are as many different ways of solving a problem as there are stakeholders in the industry. While these solutions are welcome, more unification is perhaps the next step needed. “I just sense at the moment, everyone’s got a different agenda. And it’s pretty fragmented,” said Little. The shift towards more streamlined, data-driven processes is about both efficiency and meeting evolving client expectations. Processes are evolving quickly. “A few years ago, asking for a bank statement was the norm,” Little said. “Now, obviously, we run screen scraping, and I can see in a few years’ time, that’s just not even going to be in the realm of what gets asked for.” Aggregators, with their unique position in the industry, could play a crucial role in solving this fragmentation. “That’s really where the opportunity sits,” Little said. “You know, having that single source of truth, one we can rely on, and the bank can rely on, and that essentially meets customers’ expectations.” Chambers believes aggregators should be at the forefront of technological innovation, given their scale and resources – that they could become a ‘single source of truth’ for various broker processes. “I do feel aggregators should be doing more with technology. I feel like they have the justification in the budget to spend with technology,” Chambers said. “Most aggregators don’t even have a system that can give you that single source of truth. And we’ve been building solutions around their limitations.” Smith also sees the need to overcome such limitations. “We all use aggregator software, but the amount of other software and systems we have to plug in to make it work, it can be frustrating … that’s where we’re losing a lot of efficiency.” In an ideal world, all the systems that brokers use should be integrated into a true ‘single source of truth’. “The ability to have all the platforms talking to each other effectively is what we’ve been asking for,” said Smith.

The need for standardisation

“I think as a whole industry you could say the cost of doing business has gone through the roof, and revenue’s going the other way. So that margin squeeze is a real issue”

NATHAN SMITH, BIRDIE WEALTH

As the mortgage broking industry continues to evolve, it’s clear that the most successful lenders will be those that can provide brokers with the certainty, communication and speed they need – all underpinned by technology that truly enhances the broker-client relationship in a manner that is efficient and secure. The challenges are significant, but so are the opportunities. Despite technological advancements, the human element remains crucial in mortgage broking, and speed isn’t everything. Brokers who can balance quick responses with thoughtful, personalised advice will likely see the greatest success. “This human touch, combined with efficient processes, can create a powerful value proposition for clients,” Little pointed out. Brokers are increasingly aware of the long-term impact their work has on clients’ lives. Foster highlighted the importance of understanding and meeting the needs of clients, including those who have faced setbacks in their plans, and making sure that any applications filed are going to be accepted by the lender. “That gives them so much confidence – and what you get on the back end is a lifelong client,” he said. This focus on long-term outcomes rather than quick transactions leads to stronger client relationships and increased referrals. Many of the brokers also saw a growing opportunity to move, in their role, from being reactive intermediaries to proactive advisers. Little sees potential in using data to anticipate client needs, for example. “If we can get into data and understand what’s happening in our clients’ lives, that’s where I really think we can turn the dial,” he said. “The ability to go to that client and say, ‘Hang on, you’re going to Bondi a lot. Are you going to get engaged?’ Just using data to actually be smarter, add more value to our clients, rather than that reactive approach.” A shift towards proactive advising could significantly enhance the value proposition of brokers, further differentiating them from direct lending channels. The frequency of interaction with clients will also increase as brokers gain insights into financial trajectories perhaps before the clients themselves are aware of issues or opportunities. Rather than a series of short sprints where brokers jump in only when a loan is needed, the relationship would become more of a marathon over the lifetime of a business or geared towards much longer-term financial goals. Indeed, the growing market share of mortgage brokers reflects a clear consumer preference for the personalised service and choice that brokers offer, a key advantage over direct lending channels. As Little pointed out: “We have so much choice, and that’s the beautiful thing about our industry. We have so much choice and just have to dig a bit.”

Significant challenges – and opportunities

“We’re being taught on an intimate level about their credit policy by somebody who has $3 million delegated lending authority,” he explains. “It’s changed the way that we think about the NAB brand. We understand what they need, and we’re going to provide it.”

Christopher Lee

MFAA head credit adviser, Finsure Finance and Insurance

Christopher Lee

MFAA head credit adviser, Finsure Finance and Insurance

Christopher Lee

MFAA head credit adviser, Finsure Finance and Insurance

Christopher Lee

MFAA head credit adviser, Finsure Finance and Insurance

Christopher Lee

MFAA head credit adviser, Finsure Finance and Insurance

Christopher Lee

From left: Theo Chambers, Shore Financial; Nathan Smith, Birdie Wealth; Tony Carn, NextGen; Renee Blethyn, NextGen; Will Foster, Foster Finance; Sarah Thomson, Loan Market Geelong City; Darren Little, Smartmove Professional Mortgage Advisors