Consumers embracing fintech’s streamlined, personalised process

With tech developments making lending easier and faster for brokers and borrowers alike, Australian Broker asks two digital lending platforms for their views on the present and future of their sector

OFFERING A tech-driven alternative to traditional banks, neobanks and digital banks are the newest lenders in Australia, and their speedy, personalised solutions are proving popular with a broad cross section of borrowers. Using data, apps and a digital-first approach, these online-only accounts allow users to track detailed savings and spending – even categorising spending so customers know where their money is going, with many also utilising AI to help build savings and budgeting goals for customers. This comprehensive, at-your-fingertips data is also helping brokers work with customers to deliver faster, streamlined loan products.

“We are fee-free across all products for all loan amounts at all times," Mackay says. "A lot of lenders may offer fee-free promotions for a limited time to get people in the door, or for loans over certain values, but we apply it to all our loans. Likewise, our rates are guaranteed from the time of application. I believe customers appreciate knowing exactly what they’ll be paying so they can plan their finances accordingly.” Mackay says NOW Finance is not compensating for the lack of fee revenue by increasing rates; rather, it is absorbing the costs associated with writing a loan and giving the customer the benefit of a reduced comparison rate.

“We will continue to focus on digital innovations that will help brokers serve even more customers. For us, it's about more than just trying to offer the fastest approval time with minimal paperwork, but rather how we can give brokers more time back in their days so they can continue serving customers as efficiently and as well as they do now,” Srbinovski says. And as the globe shifts to a new working model and we begin to live with COVID, Srbinovski says there is one element of an increasingly digital world that he hopes may take a few steps back into the past. “We’ve seen the development of efficiencies in digital, but working with brokers and business development managers is a relationship game as well. Meeting brokers face-to-face and building on those wonderful relationships that we've maintained online during COVID is very important. I think getting back out there and reconnecting in person is going to be a big highlight of the next quarter.”

“That's really where the magic happens. With our smart sales process, the broker has full control. They send the link out to the customer. The customer puts in their banking credentials using bank statements. We collate all that information and present it back to the broker in one document, allowing them to go through it with their customer. The process also requests commentary around any large one-off expenses that might have happened in the last three months or so.”

Srbinovski says 86 400 will then present all the information to the customer by way of an application form that they can DocuSign (electronically sign) prior to submission. “This means as a lender we already have their ID, their income expense verification and an application form outlining exactly what they're trying to achieve. Our underwriters are then able to easily pick up a file and start the assessment.” Going digital affords the fintech great speed. Srbinovski says 86 400's SLA is currently 24 hours to pick up and follow up a file – noting that it has consistently achieved this for a couple of months. However, the benefits extend beyond simply getting a faster and more personalised loan. Electronically sorted and collated personal expenses, which are neatly summarised into categories, are far more accurate (and easily compiled) than the old-school means of poring over bank statements and trying to manually group and average outgoings to determine what a borrower can comfortably repay. This means the recommended loans can be more accurately matched to the client’s needs, which in turn enables a broker to offer an even greater service to their clients.

NOW Finance is a specialist provider of personal loans to consumers looking for convenient, value-for-money, hassle-free personal finance solutions. The Australian-owned fintech continues to consolidate its stronghold in the personal loan market as a leading alternative to the major banks. NOW Finance is one of the InfoChoice Lenders of the Year 2021 and a 2020 Mozo Experts Choice Personal Loan Award winner. The company’s success is based on four key tenets: cutting-edge technologies and automation; pricing, risk and product innovation; real-time data processing and machine learning; and trusted partnerships.

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Launched in September 2019, 86 400 is one of Australia’s newest banks, backed by National Australia Bank. It offers both simple and fully featured home loans for investors and owner-occupiers, and fixed and variable rates. With 86 400's fully featured variable rate loan, borrowers have the ability to offset up to nine accounts, so customers can manage their money their way and pay off their loans sooner. With the 86 400 app, customers can connect other bank accounts and keep track of all their money in the one place – and even have upcoming bills automatically predicted.

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“It's about more than just trying to offer the fastest time to yes with minimal paperwork, but rather how we can give brokers more time back in their days so they can continue serving customers as efficiently as they do now”

George Srbinovski, 86 400

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As a leading Australian-owned non-bank lender, NOW Finance's focus is on providing simple, data-driven personal loans combining no-fuss lending solutions that are built on sophisticated data and AI capabilities, says Mackay. “In 2019, the big banks had around 64% of the personal loan market between $10,000 and $50,000; this is now sitting around 53%. Digital lenders have seen people come to them for loans in increasing numbers as we build credibility and transparency in the non-banks lending sector.” For NOW Finance, this transparency and credibility (and growing popularity) comes back to its no-fee products and guaranteed locked-in rate policies.

“Pre-pandemic, the sector had $2.5bn in applications per month in Australia for loans of between $10,000 and $50,000. This sat at $1.5bn in applications during the pandemic and has now grown to around $2bn”

Heath Mackay, NOW Finance Group

George Srbinovski

86 400

Heath Mackay

NOW Finance Group

Industry Experts

Heath Mackay is the national manager – broker at NOW Finance, one of Australia’s leading specialist providers of personal loans – a role that connects him with almost 5,000 brokers across Australia. With 16 years spent at GE Capital prior to joining NOW Finance in 2014, Heath boasts over 23 years of experience in the consumer finance industry. During this time, he has established a solid reputation among brokers for building strong partnerships with a customer-first approach, and has focused on assisting clients to identify growth opportunities and create additional revenue streams through the provision of personal loans.

NOW Finance Group

Heath Mackay

As head of broker distribution at 86 400, George Srbinovski has been instrumental in building a new broker distribution channel from scratch and leading a national team of BDMs and head office broker support teams. Srbinovski continues to build connections with Australia’s leading aggregators to introduce 86 400 to Australia’s broker network. He works closely with product, compliance and credit on process and policy enhancements to create a new way of writing home loans in Australia for mortgage brokers.

86 400

George Srbinovski

Heath Mackay

NOW Finance Group

George Srbinovski

86 400

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For brokers, working with the digital lender is a paperless, fast but highly personalised experience. "A lot of our processes are the same as other lenders' – brokers upload their compliance requirements to the app and locate the appropriate lender that best meets the needs of their customer. However, we do a few things that are quite different to other lenders,” Srbinovski says. He says 86 400 integrates what it calls smart statements, and this enables the lender to electronically verify income and expenses.

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NOW Finance in numbers

Speed meets increased personalisation Australian Mortgage Awards 2021 Fintech Lender of the Year 86 400 is an app-only digital lender and was the first smartbank to launch a digital home loan offering. George Srbinovski, 86 400’s head of broker distribution, expects the fintech's market share to continue to grow as consumers embrace the more streamlined and personalised digital process replacing traditional lending methods. In the short time since 86 400 joined Loan Market's panel of lenders, Srbinovski says the engagement it has had with the aggregator's brokers has been nothing short of spectacular. “Deals have already started to be submitted through to us as a lender, and our accreditation rates with market brokers are quite high given the short period of time that we've been on their market's panel,” Srbinovski says.

$2.04bn

total applications

customer enquiries

284,000

happy customers, growing daily

32,000+

in loan applications

$1.5bn

members of the BDM team

aggregator partnerships

of brokers in Australia can access its loan process and technology

> 90%

Building credibility For multi-award-winning non-bank lender NOW Finance, the past two quarters have been strong, with back-to-back record months, says Heath Mackay, NOW Finance Group national manager – broker. "Pre-pandemic, the sector saw $2.5bn in applications per month in Australia for loans of between $10,000 and $50,000," he says. "During the pandemic, this sat at $1.5bn in applications and has now grown to around $2bn in loan applications for between $10,000 and $50,000." Why such success? Mackay says he expects consumers will continue to move away from big bank lenders as non-banks – including digital lenders – invest more heavily in meeting the needs of consumer borrowers, as this is their core business. A prime example of this is their ongoing investment in the latest technologies to speed up and personalise loans, and in the quality customer service to support it.

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86 400 at a glance