RSS
Twitter
Facebook
In Australia, the big banks have good business. The small, non-major banks are in the shadows of the big banks waiting to catch what is being thrown out by the big banks.
In order to create some sense of balance,
brokers have been urged to help smaller lenders by sending them more business.
Instead of focusing on getting loan clients for the major banks, brokers are
encouraged to diversify, and get familiarized with the loan policies of the
smaller lenders.
David Ure, head of the Heritage Bank’s branch
and third-party channels, is hopeful and would like to see more brokers
approaching non-major banks about their loan facilities and other financial
products.
While brokers seem to be responsive to the call,
not many have really supported the call with concrete actions. For some
brokers, they see the benefits of being able to offer another option to their
clients outside of the big four banks. But other brokers may have been hesitant
to learn new things – the policies, products and services offered by the
non-major banks.
According to Mr. Ure, if you check the number of
loans that have been facilitated in a given month through non-major banks, the
resulting percentage is almost always low.
On the part of the brokers, they argue that they
are able to best serve their customers if they have that comfort and confidence
level discussing a particular bank’s credit policy, perks and benefits. They
should know these details by heart and should be able to discuss confidently
with both eyes closed to be able to deliver the highest level of service to
their clients or customers.
Brokers have invested time in learning these
details from the major banks. To be able to sell the products of the non-major
banks, brokers have to go through the learning process again. It takes time to
get to the level of understanding they now have with major banks.
So if they are approached by customers, they are
in a better position offering the products of the big banks – which they know
by heart, than offering the products of the small lenders, which they are still
in the process of understanding and learning.
As it is important for customers to be able to
have all their queries answered accurately and correctly, brokers would be more
confident discussing the products of the major banks.
But while this is true, brokers should not forget
that it is also their role to educate their clients about alternative lending
options. If your client asks you for another option, you wouldn’t be referring
a product from another big bank, would you? They may not differ that much from
each other.
What you can offer as another option that is a
product from the non-major banks. This way, they are able to give their clients
the freedom to choose a product which they deem would be more applicable and
suitable to their circumstances rather than giving them no other option at all.
Brokers should realize that by having a wider range of lending options, they have more opportunities. Borrowers who may
potentially be turned down by the big banks can still approach you if they know
you can facilitate their needs with the smaller banks.
Or if you were approached by a client who you
know has less approval chances with the major banks, you don’t miss out on the
business opportunity because you can divert the client to the smaller banks’
financial products and facilities. The client ends up with a loan; the smaller
banks got their small share of business, and you get compensated for the deal
closed. Everybody wins!
Over a hundred of Australia’s non-major banks or
smaller lenders are represented by the Customer Owned Banking Association
(COBA). Heritage Bank and Teachers Mutual are two of them.
Mark Degotardi, acting Chief Executive of COBA
said that customer-owned banks offer quality and trusted alternative to the four
major banks. Brokers are offered some diversity and competitive pricing for
their customers. Overall, customer-owned banking institutions offer rates that
are 0.50% lower than the major banks on published standard variable rates.
If the major banks push through with their plan
to increase mortgage rates, consumers are likely to look for a better
alternative and eventually switch to a customer-owned banking institution.
-FinanceTalkAustralia%2B--%2BBusiness%2BLoans.jpg)
0 comments