New app threat to brokers

Callum Wilson said Westpac had been surprised at the level of interest in the app, and customers’ desire to apply for home loans through the online channel.

The app launched a couple of weeks ago.

“There was a degree of scepticism that people would do it. The industry view has always been that people wanted to sit down and have a conversation with someone but a number like being able to do it anywhere, all of the time.”

The amount of mobile traffic Westpac gets has increased by 300% over the past 12 months.

Wilson said the app was a potential threat to mortgage brokers.

He said mobile was becoming the primary connection point with banks. But there would continue to be customers who wanted to be able to talk face-to-face with people.

“Lots of people still want to have those complex conversations in person. You’ve always got to be able to do that but there will also be a group who like the convenience and speed of doing it online, any time and the sense of control that comes with the online environment.”

Wilson said younger people were much more trusting about handing their information over online.

Comments from our readers

On 11 July 2013 at 3:18 pm Craig Pope said:

There is no doubt these phone 'approvals' will be highly conditional subject to bank statements, pay slips, proof of deposit, ID etc etc. Mortgage brokers can already give instant indicative 'approvals' or 'borrowing capacity' based on the basic information provided by the clients. Not just from one bank but from a range of banks.
Most clients will still want expert unbiased advice, choice and need brokers help to expertly prepare an application - rather than talk to a call centre worker, teller or smartphone. I am not sure this will worry brokers too much.

On 12 July 2013 at 7:53 am MJP said:

Craig, concur. These so called "approvals" will have lesser value (creditability) than those issued willy nilly by Mobile Lending Managers. Rescued 3 young couples recently who thought the "approval" they had from a MLM was sufficient for them to bid at an auction - too many "outs" for the Banks and therefore "too dangerous" for the unsuspecting young home purchaser.

On 12 July 2013 at 10:37 am Amused said:

Agree with Craig and MJP. Speaking of so called "approvals" from bank mobile lending managers I see the Kiwibank MLMs are still doing their "conditional" pre approval letters for prospective home buyers. Basically the letter states the client can borrow a mortgage with Kiwibank BUT the bank still needs to sight evidence of income, deposit and a full statement of position etc from the applicant. So yes, not worth the paper it is printed on and potentially very dangerous. Oh...and yes Kiwibank conveniently forget to disclose what their low equity premium will be. I wonder why that is guys? I saw a young couple last year who had "conditional" pre approval with a Kiwibank MLM and at the eleventh hour he finally told them the low equity premium would be $13,000 odd. They were highly unimpressed so we saved them $7,000 by going to ASB instead.

On 12 July 2013 at 3:39 pm Craig Pope said:

Thanks for your thoughts MJP & Amused. It makes a real mockery of all our RFA disclosure docs and need for fact finds (and assessing clients needs) when a smartphone application can solve everyone's approval problems.

Are you listening FMA??

Anyone house hunting that is relying on a smartphone application's approval to make a purchasing decision is taking a HUGE risk.

Maybe the RBNZ should be listening as well. Why can't these bank's and MMM just do the job properly like we have to?

On 12 July 2013 at 4:35 pm Jeff Royle said:

Craig, could not agree with you more, a very dangerous situation and people already make rash decisions based on online calculators!

On 16 July 2013 at 10:28 am Kim lyons said:

Banks sell products, we give advice!

On 16 July 2013 at 1:08 pm Graeme said:

It is not just mortgages. Banks routinely give "advice" on Fire and General insurance when in reality they do not understand how to use their quotation tools let alone the cover afforded by the policies. Qualified and incompetent even under the protection of a QFE is unacceptable.

New app threat to brokers

Mortgage brokers may feel threatened by a new app that lets Westpac customers apply for home loans via their mobile phones, says the bank’s general manager of customer strategy and experience.

Thursday, July 11th 2013, 7:02AM 7 Comments

Comments from our readers

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