Andrew Haslip looks at the potential for new startups in the complex mortgage arena.
The online channel is already well embedded in the financial services industry. However, more complex financial services could be moved online if providers get serious about improving digital origination.
As per the Verdict Financial 2015 Retail Banking Insight Survey, over 56% of Australians and almost 81% of New Zealanders used online banking weekly in 2015. Everyday banking has become primarily a digital service and the dominant way customers self-service, whether this is transferring money or notifying the bank of upcoming overseas travel. The one area in which digital channels lag is product origination, particularly for more complex products such as mortgages.
The same survey found only 35.6% of Australian mortgage holders used the internet at any stage in their mortgage arrangement. One reason for this is that many providers, particularly mortgage brokers and financial advisers, do not have the capability to effectively market and acquire customers via the online channel.
Fortunately, fintech startups are stepping into the breach. One such example is HashChing, which connects brokers with prospective clients via an online portal. Using such specialized online marketplaces, Australians are now able to connect to brokers and have much of the arrangement (such as filing documents) handled digitally, even by small brokers.
Financial intermediaries benefit from effectively having a digital storefront, while customers get an easier way to access the advice of a mortgage specialist and so (hopefully) a better deal. If HashChing can make online a major source of complex mortgage business, there’s definitely growth to be wrung from the channel yet.
– This article is reproduced with kind permission from Verdict Financial. Some minor changes have been made to reflect BankNXT style considerations.