Home loan pause is not an exit, says GM of broker partnerships
BOQ Group says it remains strongly committed to both the retail and commercial broker channels, emphasising that despite its decision to pause the acquisition of new broker-sourced Bank of Queensland home loan customers, it is not exiting the channel.
The group, which includes the Virgin Money, ME Bank and BOQ brands, has clarified its digital transformation strategy and intentions regarding brokers following speculation from some in the industry that BOQ would abandon the third-party channel altogether.
BOQ general manager broker and strategic partnerships Johnny Lockwood (pictured above left) said in September 2023, the group paused the acquisition of new Virgin Money home loan customers via the broker channel.
He said this was to focus on enhancing “our technology, products and services in preparation for launching our new digital mortgage for our retail brands – Virgin Money, ME and BOQ – on our new cloud digital bank”.
“Consistent with this approach, from 31 August 2024, we will pause the acquisition of new Bank of Queensland (BOQ) home loan customers via the broker channel,” Lockwood said.
“We will accept applications for new customers up to and including 30 August 2024. All existing customers will continue to be supported, including with new lending applications.”
“It is important to note that BOQ Group remains dedicated to both the retail and commercial broker markets. ME’s broker channel will continue uninterrupted, as will the BOQ branded proprietary channels.
Lockwood said the ME brand, which was the group’s most popular broker product, would remain active in the broker market.
“We are dedicated to maintaining the brand’s quick turnaround times and are exploring ways to incorporate lending compositions previously offered by the BOQ brand.”
BOQ also highlighted its commitment to commercial brokers and its strong relationships with these sector partners.
“BOQ will also remain dedicated to the commercial broker market,” said Karen Carter (pictured above right), BOQ national general manager commercial third party.
“Starting 31 August 2024, we will expand our offerings to include commercial lending, asset finance, and insurance premium funding. Additionally, we will implement a dual application policy for BOQ Specialist residential home loans.
“These loans will be available exclusively to customers with existing commercial loans or those who have previously secured BOQ Specialist residential home loans.”
BOQ Group’s digital transformation
Lockwood said the decision was aimed at streamlining operations as “we transition to advanced core banking and mortgage application processing platforms”.
“This move will also facilitate a smoother migration to these next-generation systems in the future.”
Lockwood said since first being announced in 2020, the Group’s digital transformation strategy had been progressing at pace, with Virgin Money, BOQ and ME brands having launched transaction and savings accounts on the digital bank.
“But we’re not done yet. We’re turning our focus to bringing home loans onto our new digital bank and into our apps in FY25, creating a seamless end-to-end mortgage proposition for brokers.
“Our new home loan proposition isn’t just a new product, it’s a brand-new technology stack and customer experience. The proposition will be supported by a streamlined, digitised process, making for a fast and efficient application process for brokers and customers.”
Lockwood said the group was on track to commence a live staff pilot and settle home loans on the new platform in 2024, in the lead-up to launching a new digital home lending experience for the broker channel, once fully validated.
“We will keep brokers informed on our progress.”
Changes to BOQ branch network
BOQ announced to the ASX on August 22, that the significant progress made to its digital transformation had enabled it to simplify its retail distribution channels.
“BOQ has announced we’ll be converting our Owner Managed Branch (OMB) network to corporate ownership,” Lockwood said. “ This means all our branches will be operated by BOQ, instead of a network of franchisees. This is expected to be complete by March 2025.”
This will affect all 114 of BOQ’s OMB network and include the loss of up to 400 full time equivalent roles across the business.
Lockwood said the change would simplify BOQ’s business model so it could focus its attention and investments on continuing to improve the experiences it delivers for customers.
“This includes uplifting our digital banking capabilities, which many of our customers have told us is important to them.
“While a quarter of the bank’s retail customers are now transacting on BOQ’s digital platform, we are committed to maintaining an appropriate physical presence for our customers in key markets, recognising that branches continue to be an important part of the banking experience for some customers.”
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