Fintechs pose no threat to mortgage brokers – for the time being
Australian mortgage brokers have nothing to fear from the surge in Fintechs and consumer brokered mortgage platforms presently entering the market. However, this may not be the case in the future.
Fintechs, also known as marketplace lenders or peer-to-peer lenders, offer mortgage, commercial and personal loans direct to consumers via very sophisticated software.
According to MoneyQuest Managing Director and finance industry leader, Michael Russell, mortgage brokers in Australia have what Fintechs do not: consumer awareness, trust and scale.
‘Fintechs by their nature are disruptive to the status quo. They’re already successfully penetrating the UK, US and Chinese markets. Fintechs operate on a significantly lower cost structure than traditional bank and non-bank mortgage providers – and in the longer term this is the concern,’ said Russell.
“Over the past decade, almost all new Fintechs have failed. Not because of a technology shortcoming, but because of their inability to generate scalable consumer awareness.
With market share at around 52% for all new loans, mortgage brokers must not get complacent. Instead, we need to continue to capitalise on our competitive advantage by improving customer experience and working with lenders to accelerate the timing of consumer outcomes” advises Russell.
Russell says that mortgage brokers have an open door opportunity to increase market share and to be better prepared for the onslaught of Fintechs entering the market and propositioning Australian consumers.
‘Today’s Australian home buyers are very discerning and well researched. They are yet to be tempted to act alone in acquiring a mortgage given the availability of licensed mortgage brokers who provide a quality service at no cost to them.’
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Established in 2007, MoneyQuest was founded with a clear goal – to make property ownership easy and rewarding for everyday Australians. Since then, our growing team of brokers has helped thousands of families and investors build their financial future – from first home ownership right through to retirement.
Visit www.moneyquest.com.au or call 1300 886 100. Money Quest Australia Pty Ltd is a Credit Representative (No. 396857) of ratesonline.com.au Pty Ltd, Australian Credit Licence 384404