Mortgage brokers are facing a double threat from online lender Tic:Toc, which is seeing a surge in demand from consumers and interest from banks and non-bank lenders looking for cheaper distribution.
Tic:Toc promotes its quick turnaround times and convenience. The group only offers its own branded mortgages, which it says can be approved within 22 minutes through a completely online process. The fintech started lending four months ago and has received approximately $330 million of applications in that time, with conversions hovering around 17 per cent this month.
“I don’t just mean time to decision. Convenience is also an important factor. What we know about consumers is that a growing segment are happy to self-service and are getting more used to self-serving through fulfilling other requirements digitally in terms of purchasing products and services.
“At the end of the day, the feedback we are getting is that it is really easy, customers don’t feel pressured and they don’t feel sold.”
Mr Baum said that the company has plans to partner with more bank and non-bank lenders looking for a cheaper distribution channel than mortgage brokers.
He explained that the digital origination process cuts costs for both consumers and funders.
Unlike some fintech players looking to disrupt the home loan market, Mr Baum has extensive industry experience, having led Bendigo and Adelaide Bank’s third-party business for close to four years.
In addition to its broker ties, Adelaide Bank is a prominent wholesale funder for mortgage managers and aggregators and is widely regarded as one of the more innovative lenders in the market.
The threat of digital disruption has increased for brokers in recent years. However, many still believe that face-to-face contact with a mortgage professional will continue to be the preferred choice for Australian borrowers.
“My opinion is home loans are not actually as complicated as the industry makes out,” Mr Baum said. “They are really a means to an end, which is more a utility-style product.
“Having said that, there are certain customers who have complex situations who will always need to seek advice.”
Tags: Australian Broker, Better Brokers Better Solutions, Better Choice Mortgage Services, Finance Broker, housing finance, Perth Finance Broker, perth mortgage broker, perth mortgage brokers, perth property market