John Mohnacheff talks new insurance and technology offerings for innovation and relevance
The Liberty Financial national sales manager isn’t convinced the Murray Inquiry will break the major banks’ stranglehold, but it won’t stop him storming ahead with new insurance and technology offerings for 2015
MPA: What’s your reaction to the Financial System Inquiry report – will it break the dominance of the major banks?
John Mohnacheff : We can only hope that it does, but that sort of change also requires a number of other market factors to occur. That said, the review is a step in the right direction as any reduction in consumer choice is definitely a problem for the industry and consumers in general. The reality is that any change will take some time to pass, and with it will come lobbying, lots of debate and speculation. We will wait and see.
MPA: Could a stronger non-major bank sector present any opportunities for private lenders like Liberty?
JM: Everyone talks about creating a level playing field. There’s no such thing; there’ll never be a level playing field. A company has to carve out their own niche. I quite like the head-to-head battle between majors and non-majors for the mass market; the non-bank sector can still find gaps. The major banks share an obsession with market share, but we stand out by being relevant to the broker market. Innovation and relevance is core to competing: find products and niches which suit the market. Banks play mass market; non-banks play in the niche market. Liberty is custom lending for the broker market: low-doc, alt-doc, SMSF, refinancing. We’re going to continue to be about bringing new specialist lending to the broker market.
MPA: What can brokers expect from Liberty in 2015? Are there any new products in the pipeline?
JM: Definitely, yes – we’re launching an insurance arm in conjunction with our sister company LFI insurance, who’s just recently been awarded its insurance licence. We’re going to offer risk products to go with our loans: mortgage insurance but also home and contents insurance, car insurance, life insurance. The days of the home mortgage specialist are dwindling; we need to be finance brokers … There are giant new entrants out there: Coles, Woolworths, Australia Post, with large databases so they know exactly what the customer is doing. Offering insurance helps the broker to keep in touch with their customer, by creating multiple touchpoints.
MPA: Is technology still a particular area of interest for Liberty?
JM: Technology is the next horizon. We launched Broker Net in 1999; it was clunky, but it still allowed brokers to enter details online and get a quick response from us 15 years ago, and technology is still an area of focus. Technology enables other entities to come in and play in this space. I mentioned before the likes of Australia Post, Telstra, Coles, Woolworths; technology allows them to watch all the buying and spending patterns of their customers ... the next logical thing is to go in there and offer them financial services. Hey, we can help you with your car insurance, because we see you pay Allianz every month. They can offer loyalty programs … technology should be embraced because it allows the broker to do the same thing; it allows the broker to sit there with the client and walk them through, electronically, all the services they can provide, plus the face-to-face and all the human interaction, and it’s all driven by the system.
MPA: If technology allows consumers to do it all themselves, then where does the broker fit in?
JM: Humans are a gregarious animal – they like to get out; they like to feel and touch; they also want the reassurance that someone’s in their corner giving them choice. So the role of the broker is to demystify all that, say “Here are my recommendations on how I see your loans progressing”. And I’m talking about loans here; we’ve got to stop talking about home loans. We people have to realise a mortgage is a mortgage is a mortgage. Yes, one’s a home mortgage, one’s a car mortgage and one’s a commercial mortgage, but they’re still all a loan. When the broker says, “I can help you with this, this and this”, they become like a real financial supermarket … whether you’re big or small is irrelevant; it’s how you position yourself in the marketplace.
MPA: How is Liberty using technology in the broker channel?
JM: It is about creating a step-by-step process for the broker – easy to lodge, follow the prompts, fill in all the answers; the back channel comes in and says “That’s approved”. Linked to that are all the insurance products. So you’ll be able to select through the Liberty website all the products that you could want for your client. The beauty of it is you won’t have to hop out of one system and into another; when it’s bundled it becomes “Would you like fries with that?” It interacts with [NextGen] Apply Online and we interface with broker systems; that’s what it’s about.
MPA: Liberty offers a range of products, but which diversification strategy has most potential for brokers?
JM: It’s the insurance. Look at a home loan: people might turn over their home loan every six years; they might refinance their home quite often away from the broker. Can you remember someone you had one transaction with six years ago? No. They’ll move on to the latest ad. However, if that broker helped them with insurance, we know that most people turn over their car every three years; most families have two cars! When a person fills out an application form, they are creating the greatest connection of trust that there is outside of a marriage: in that application you disclose everything; it’s the richest source of data you can get, and all you use it for is a home loan?
MPA: In one sentence: why should brokers go for Liberty Financial?
JM: In 1997 Liberty came with an idea and a product to Australia, and we chose the broker market as our source of distribution. Everything that we have ever done, everything we have launched has always been for the broker, even during the GFC. Liberty proudly has never ever taken one step back from our commitment to the broker channel.
Related articles:
Head to Head with Sam Boer
Siobhan Hayden: Listening & Learning
MPA: What’s your reaction to the Financial System Inquiry report – will it break the dominance of the major banks?
John Mohnacheff : We can only hope that it does, but that sort of change also requires a number of other market factors to occur. That said, the review is a step in the right direction as any reduction in consumer choice is definitely a problem for the industry and consumers in general. The reality is that any change will take some time to pass, and with it will come lobbying, lots of debate and speculation. We will wait and see.
MPA: Could a stronger non-major bank sector present any opportunities for private lenders like Liberty?
JM: Everyone talks about creating a level playing field. There’s no such thing; there’ll never be a level playing field. A company has to carve out their own niche. I quite like the head-to-head battle between majors and non-majors for the mass market; the non-bank sector can still find gaps. The major banks share an obsession with market share, but we stand out by being relevant to the broker market. Innovation and relevance is core to competing: find products and niches which suit the market. Banks play mass market; non-banks play in the niche market. Liberty is custom lending for the broker market: low-doc, alt-doc, SMSF, refinancing. We’re going to continue to be about bringing new specialist lending to the broker market.
MPA: What can brokers expect from Liberty in 2015? Are there any new products in the pipeline?
JM: Definitely, yes – we’re launching an insurance arm in conjunction with our sister company LFI insurance, who’s just recently been awarded its insurance licence. We’re going to offer risk products to go with our loans: mortgage insurance but also home and contents insurance, car insurance, life insurance. The days of the home mortgage specialist are dwindling; we need to be finance brokers … There are giant new entrants out there: Coles, Woolworths, Australia Post, with large databases so they know exactly what the customer is doing. Offering insurance helps the broker to keep in touch with their customer, by creating multiple touchpoints.
MPA: Is technology still a particular area of interest for Liberty?
JM: Technology is the next horizon. We launched Broker Net in 1999; it was clunky, but it still allowed brokers to enter details online and get a quick response from us 15 years ago, and technology is still an area of focus. Technology enables other entities to come in and play in this space. I mentioned before the likes of Australia Post, Telstra, Coles, Woolworths; technology allows them to watch all the buying and spending patterns of their customers ... the next logical thing is to go in there and offer them financial services. Hey, we can help you with your car insurance, because we see you pay Allianz every month. They can offer loyalty programs … technology should be embraced because it allows the broker to do the same thing; it allows the broker to sit there with the client and walk them through, electronically, all the services they can provide, plus the face-to-face and all the human interaction, and it’s all driven by the system.
MPA: If technology allows consumers to do it all themselves, then where does the broker fit in?JM: Humans are a gregarious animal – they like to get out; they like to feel and touch; they also want the reassurance that someone’s in their corner giving them choice. So the role of the broker is to demystify all that, say “Here are my recommendations on how I see your loans progressing”. And I’m talking about loans here; we’ve got to stop talking about home loans. We people have to realise a mortgage is a mortgage is a mortgage. Yes, one’s a home mortgage, one’s a car mortgage and one’s a commercial mortgage, but they’re still all a loan. When the broker says, “I can help you with this, this and this”, they become like a real financial supermarket … whether you’re big or small is irrelevant; it’s how you position yourself in the marketplace.
MPA: How is Liberty using technology in the broker channel?
JM: It is about creating a step-by-step process for the broker – easy to lodge, follow the prompts, fill in all the answers; the back channel comes in and says “That’s approved”. Linked to that are all the insurance products. So you’ll be able to select through the Liberty website all the products that you could want for your client. The beauty of it is you won’t have to hop out of one system and into another; when it’s bundled it becomes “Would you like fries with that?” It interacts with [NextGen] Apply Online and we interface with broker systems; that’s what it’s about.
MPA: Liberty offers a range of products, but which diversification strategy has most potential for brokers?
JM: It’s the insurance. Look at a home loan: people might turn over their home loan every six years; they might refinance their home quite often away from the broker. Can you remember someone you had one transaction with six years ago? No. They’ll move on to the latest ad. However, if that broker helped them with insurance, we know that most people turn over their car every three years; most families have two cars! When a person fills out an application form, they are creating the greatest connection of trust that there is outside of a marriage: in that application you disclose everything; it’s the richest source of data you can get, and all you use it for is a home loan?
MPA: In one sentence: why should brokers go for Liberty Financial?
JM: In 1997 Liberty came with an idea and a product to Australia, and we chose the broker market as our source of distribution. Everything that we have ever done, everything we have launched has always been for the broker, even during the GFC. Liberty proudly has never ever taken one step back from our commitment to the broker channel.
Related articles:
Head to Head with Sam Boer
Siobhan Hayden: Listening & Learning
