The Australian mortgage broking industry recorded its highest ever market share of 66.9% in the September 2021 quarter.

Here are the top team, technology and market trends that are shaping the transformation of mortgage broking in 2022 and beyond. (Scroll down for a full analysis).

Mortgage Broking Industry Trends Infographic

I hope you found this infographic useful. Now here’s a longer form version of the Mortgage Broking Industry Trends for 2022:

1. Remote Advice Is The New Normal

Many brokers have been delivering a remote sales and advisory process for years. However, it wasn’t considered “the norm” and other players in the industry (e.g. lenders) have been slow to catch up. The pandemic has accelerated a trend toward remote and “paperless” advice, enabled by digital tools:

Web-conferencing via tools such as Zoom and Microsoft Teams.
E-signing is becoming mainstream, and accepted by more and more lenders.
Remote VOI (Verification Of Identity)
Online client portals where clients can log in securely to provide information and access progress updates.

2. Compliance Is Here To Stay

The introduction of Best Interests Duty (BID) has placed higher expectations on mortgage brokers (while banks remain immune).

Time Per File ⬆️ – broking teams are spending on average 40% more time per file compared with 5 years ago.
Approval Timeframes ⬆️ – longer lender SLAs are a constant challenge for brokers working with clients in time-sensitive situations.
Quality of Advice ⬆️ – many brokers believe that deeper analysis of Requirements and Objectives etc. leads to a more strategic and better quality solution.
Remuneration ⏸ – despite the increase in workload and responsibility, renumeration remains the same. Brokers must therefore become much more efficient to grow.

3. Team Size & Complexity Is Growing

In response to growing administration and compliance burdens, broking teams are applying specialisation and division of labour to maintain growth. According to BrokerEngine internal data, average team size has increased by 20% in the last 2 years.

More Brokers: firms are plugging more brokers into their proven business models, and individual brokers are joining forces to create a multi-broker presence.
Parabrokers: teams are incorporating credit analyst roles to assist with policy, serviceability and product selection, allowing brokers to focus on client-facing advice.
Client Service Managers: CSMs are more prevalent than ever, with a focus on all the customer-facing activity that fits around the core loan advice.
Virtual Assistants: many teams are employing VAs to take care of process-driven data entry, document collection, loan tracking and more.
Per-Deal Processors: many teams also rely on outsourced loan processors, either as an ongoing resource, or an overflow facility to handle spikes in demand.

4. Rise Of The Remote & Offshore Workforce

Increasing admin work and better digital collaboration tools have driven rapid growth in the offshore workforce. This frees up in-house people to perform higher-value work.

WHERE: Philippines, India, Nepal
WHAT: Data Entry, Loan Processing, Parabroking
HOW: Detailed, documented workflows, combined with collaboration tools such as Zoom, Slack, BrokerEngine

5. A.I. And Emerging Tech Come Of Age

Technologies such as Artificial Intelligence (AI), Robotic Process Automation (RPA) and Machine Learning are finding tangible applications, including:

Automated Data Extraction
Income & Expense Analysis
Fraud Detection
Product Recommendations

We expect to see rapid developments in this space in the coming year and beyond.

6. Don’t Send A Robot To Do A Human’s Job

There are still plenty of tasks that technology can’t do. Mortgage brokers should focus on the things that can’t be automated. For example:

Strategic advice
Wowing the customer
Concierge service
Financial coaching

With over 60% market share, Australian borrowers clearly have a preference for working with a trusted broker. This is an advantage that we should capitalise on as an industry.

7. Ballooning Customer Expectations

As mortgage borrowers become more used to digital and technology-driven experiences and less used to dealing with humans IRL (In Real Life), they are starting to demand:

Shorter response times
Smoother experiences
More choices
Faster approvals

For many brokers, these demands may become unreasonable at times. Constantly educating clients, choosing clients carefully and not working with everyone are useful reminders to say sane and enjoy your work.

8. Evolution in Continuing Professional Development

Continuing Professional Development used to be a box-ticking exercise around earning any 30 CPD points per year. Now, brokers are expected to upskill in diverse areas, including:

Core skills
Fraud detection
Financial abuse
Customer service

The upside of this is more diverse skill-sets to support clients and create a competitive advantage.

9. Increasing Channel Conflict

Brokers and lenders share an uneasy relationship, aggravated by channel conflict:

Two-speed turnaround times, with branches typically enjoying much faster SLAs.
Lenders notifying clients at key milestones (e.g. formal approval) before even the broker has been notified
Branch-only offers & policies, with many stories of clients being turned down via the broker channel, then immediately approved at a branch.
Aggressive retention teams who swoop in with last-minute sweeteners to avoid losing clients.

Despite these frustrations, the broker channel is still thriving on account of strong customer focus and a recognition by borrowers of the value that brokers add.

10. Ideal Mix of People, Process & Technology

Despite the challenges, brokers have a bright future. The most successful firms of the future will combine an ideal mix of people, process and technology:

PEOPLE: smart people, focusing on high value sales, strategy and service.
PROCESS: standardised processes and workflows to deliver “one way, best way” every time.
TECHNOLOGY: tools and technology used where they can create efficiencies, not for their own sake.

Conclusion and Next Steps

The mortgage broking industry trends covered above are not a mystery – they are already upon us and accelerating every day.

The questions is, how well are you positioned to take advantage of them? And what decisions do you need to make today in order to ensure your firm is able to ride on the crest of the wave?

If you’re interested in finding out how BrokerEngine software can help you apply Specialisation, Division of Labour and Process Excellence to deliver a 5-star customer experience at scale and settle more deals in less time, please register for our latest demo here.