Digital banking is already commonplace – but what’s the next step for both banks and brokers? MPA talks to Melissa Christy of 86 400 about the smartbank's approach
Just a few decades ago, the idea of online banking was something out of a science fiction novel – a dream rendered unlikely by the lack of supporting technology and concerns around security. But in 2020 it’s become commonplace. So, what’s the next step? How will digital banking evolve in the next decade and beyond?
For Melissa Christy, lending product lead at 86 400, these are the considerations that drive her day-to-day role. Given that 86 400 is the first to be dubbed a smartbank, there’s pressure to look at new ways of doing things in the digital banking space and simultaneously streamlining processes.
In practical terms, Christy sees the primary benefits of smart banking as enabling smoother processes, making identity verification easier, and reducing client-to-broker-to-lender friction. All of which are admirable goals at any time, but Christy believes they have taken on a new level of importance in recent months, in no small part due to the COVID-19 pandemic.
“There’s more need than ever for the ability to transact in a way that doesn’t involve direct contact with other people, and having a structure in place to enable that is crucial,” says Christy.
“We haven’t slowed down with our roadmap. It’s pretty much business as usual” Melissa Christy, 86 400
Fortunately, it’s been a successful approach so far. Operating from her home office, Christy says the impact on the lender’s day-to-day operations has been fairly minimal.
“We all just picked up our laptops and went home,” says Christy. “All of us are staying connected with Slack and Zoom, so we can tackle issues as they arise pretty easily. We haven’t slowed down with our roadmap. It’s pretty much business as usual.”
At present, 86 400’s products are offered entirely through brokers. Although distribution may expand in the future, Christy notes that this has been a specific choice.
“We think brokers are the best way for consumers to find lenders and products,” says Christy. “It’s not just about presenting customers with a variety of rates and then hoping for the best. We recognise that brokers have a much more complex task ahead of them, particularly given the new best interest considerations that are coming into effect.”
Accordingly, Christy stresses that 86 400 is heavily invested in providing brokers with the toolsets they need to thrive in an upgraded digital environment. While it’s long been necessary for brokers to keep up to date with the tech side of the business, Christy believes it’s now more crucial than ever that they do so, in order to distinguish themselves from competitors.
“We spend time working with brokers to ensure they’re up to speed with our processes,” says Christy. “You can be certified entirely online, but we tend to prefer to go more in-depth – Zoom calls, webinars, demonstrations and so on. We’ve got four BDMs around the country at the moment, and that’s likely to expand into the future too.”
Though there’s much to be optimistic about, Christy is still pragmatic about the challenges currently facing brokers. She cautions that it’s still too early to know what the full impact on the property market will be.
“Certainly you’ve got some factors that don’t paint a promising picture – there’ve been income cuts across the country and refinance activity is at an all-time high,” she says. “But if interest rates continue to stay low, there are certainly going to be buyers who will want to take advantage of that.”
“It’s not just about presenting customers with a variety of rates and then hoping for the best” Melissa Christy, 86 400
However, she does believe it will force lenders to change their approach to dealing with both brokers and clients. If they haven’t invested in online processes eff ectively up to this point, then they’re going to need to do so – and swiftly. Christy points to online shopping as a precedent-setting example.
“Online shopping is totally normalised now, but just a few years ago it was still viewed with a certain measure of suspicion,” she says. “It helped set a standard for other activities too. People are more confident that they can do other things online securely, and in many cases are asking why they can’t do more.”
Though Christy believes larger players in the market will gradually adopt similar approaches, she thinks it will take time; it’s a significant pivot to make, and not everyone is equally equipped to do so.
“We’re in the position we are because we built the company from the ground up to be like this,” she says.
“Certainly it’s an adaptation others can make, but it presents logistical difficulties. The more existing employees and processes that are involved, the more challenging it becomes to pivot. It’s an advantage that we’ve got on our side.”
