BDM says brokers have been facing the same challenge since the Royal Commission
The cornerstone of broking is to settle loans – but that is also the biggest challenge, said Resimac BDM Craig Nicholas (pictured). The former broker said despite all the change that has occurred in the industry since the days of the Royal Commission, the challenges facing brokers were much the same.
Added to this challenge of settling loans is the “huge admin burden” of compliance, which makes the process more lengthy and costly in terms of resources.
“Then layer that with things like changing lenders’ guidelines and looking for a true business partner, as in a lender, who shares the same commitment to settle loans, rather than just taking applications,” he said.
While technology is one part of streamlining the process for brokers, it can actually be an obstruction for those who have been in the industry for a long time, he said.
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“For a new broker, absolutely, technology is great, but I don’t think that’s a doyen,” he said. “That’s been mooted as being the solution for a long period of time, but no-one’s really solved it because there still needs to be, in my opinion, a manual assessment where you actually get a credit person making a credit decision rather than getting it credit scored.
“Technology’s good for getting it into the system but it’s not good for getting a credit decision out.”
The benefit of having a human behind the process is that a credit decision made by a computer won’t necessarily always cater to all of the situations of that borrower, he explained. This means someone who has been in arrears for three months, for example, will have the chance to explain their situation to the lender rather than being declined off the bat.
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“Let’s have a look at the environment we are living in right now,” he said. “We’ve got COVID, we’ve got people on mortgage repayment pauses, their employer has restricted their income purely because they’re fighting to remain in business because they’re not generating revenue.”
While the major banks potentially wouldn’t be able to help such borrowers refinance or consolidate their debt, other lenders could look more deeply into the situation through human eyes to assess the factors that have caused it before making a credit decision.
“It’s that personalised touch,” he said.
