Westpac’s new national head of broker distribution talks to MPA about how the bank can give back to brokers
Westpac’s new national head of broker distribution talks to MPA about property investors, his plans for the year ahead and how the bank can give back to brokers.
MPA: How does your experience in banking set you up for this role?
WARREN SHAW: I’ve been with Westpac for 60 days, so I’m still learning the organisation. The bulk of my experience has been with NAB. I spent 27 years there and my first two roles were running the retail bank – the first party channel. I’ve got a pretty intimate knowledge of the mortgage product suites [and] consumer behaviour around mortgages.
Prior to that, I ran the mortgage business for NAB, where I provided support from the centre into both the third party and the first party channels. I’ve worked with most of the aggregation groups through that relationship. So I have a deep understanding of how the industry works.
This role here though is my first distribution role in terms of third party origination on the consumer side. That said, I have experience running the Banksia Financial Group. I was appointed CEO there in May of 2012. Banksia operated in the commercial third party space predominantly. That’s the linking piece, I suppose, between my NAB career and my Westpac career.
The appeal for me with this opportunity, as I look to relaunch my career after doing the work out on behalf of Banksia, is the landscape of opportunity in financial services, the growth opportunities which in my mind still remains the third party consumer mortgage space. The banks offer choice across lots of different channels, but in terms of pure acquisition and net customer growth, the third party space is clearly where the action is, and from my perspective I’m very interested in playing a role and shaping Westpac’s presence there.
MPA: Now that Tony MacRae has moved up to general manager third party distribution at Westpac and St George Banking Group, what does your role entail?
WS: My role as head of the Westpac broker channel is exactly that – to be the head and the frontman of Westpac’s offering into the third party space. Tony is now operating the consumer banking third party level, all of the brands in the Westpac stable that operate in that space are under his direction, but we felt it was really important to maintain a strong presence at the head of the Westpac brand itself, rather than have someone trying to do two things.
MPA: To clarify, you’re working on the residential rather than the commercial side?
WS: The Westpac division that I run is first and foremost a consumer offering, but I think there’s opportunities for us to work with our commercial team, who run an extremely good and very effective business in the commercial third party space. There are opportunities to work more closely together, to face into the market and help brokers who want to move from consumer to commercial as they look to diversify their business.
MPA: Are we likely to see any increase in cooperation between the banks in the Westpac group, and what will this mean for brokers?
WS: I’m new to the group, so I don’t bring any baggage around why one part of the group does one thing and one part doesn’t. My perspective is if there are opportunities to have synergies with other banks in the St George stable, we should take those, particularly around sharing best practice and innovation and technology solutions around service delivery.
But that said, we’re committed to a multi-brand strategy, so Westpac’s offering in the market will be different to the way St George brands will face the market. I think that’s appropriate with the different segments we want to attack. We have different customer bases and different needs in many cases, and we have broker relationships steeped over time that need to be respected as well.
I think an early example of where we’ve seen some cooperation already is the way accreditations are processed for the whole Westpac stable of brands, so if you’re a new broker and you want to be accredited to deal with both Westpac and St George’s banks you can do that in one process – you don’t have to go to four different banks. That is just a small example, but we think there are some synergies to extract.
MPA: What do you see Westpac doing particularly well that distinguishes you from the other major banks?
WS: I want to see us becoming famous for being connected, consistent and transparent – they’re the things that I’m passionate about. I’m passionate about people and creating environments for them to be the best they can be, in particular our BDMs, connecting them as closely as we can with the broking community to help them build their businesses.
As someone new to Westpac, I’m delighted with how our BDMs are perceived by the broking community generally. In the recent Brokers on Banks survey, nine Westpac BDMs were called out in the ‘Roll of Honour’ – more than any other bank. We consistently get great feedback about our BDMs. It’s my job to build on that great position.
MPA: So is this about more BDMs, or better trained BDMs, or better technology available to BDMs?
WS: It’s about all of those things potentially, but first and foremost it’s about really well-connected BDMs. I think brokers want to work with organisations that get them, and there has to be an investment in the quality of our BDMs on the ground. Also, where it’s warranted, an investment in more BDMs as more brokers are attracted to the proposition that Westpac provides. We’ll be ready to invest as the demand comes along.
In terms of our digital presence we can help brokers with CRM capability in terms of how they manage the relationships with their customers post-settlement. I think we have lots of information at a bank and somehow I’d like to find a way to share that with brokers who own the primary customer relationship in the mortgage space at least, to make sure that those customers remain. It’s good for us, it’s good for the broker.
MPA: Moving to Westpac’s appetite for property investors, are we likely to see further tightening in the coming year?
WS: It remains an important segment for us, it always has, but we need to work with our regulator APRA around the guidelines and the capacity we’d like to see us play at. We’re not going to move away from that framework. We’re open for business on property investment, we have great products and we think there’s capacity for us to do more. That’ll be our focus as we go into the remainder of this year and next.
We’re buoyant about the conditions generally. Overall levels of household debt are relatively benign – we see pockets of household stress and we’ll watch those closely, but broadly interest rates are low, customer value is strong, so that usually suggests it’s an environment with opportunities and we’ll continue to support it.
MPA: What can Westpac offer to brokers beyond residential mortgages?
WS: In terms of income diversification there are small things we already do around personal lending, etc, that brokers can participate in – home and contents insurance, etc, the ancillary stuff that normally comes with a home loan conversation.
But I think there’s an opportunity for those brokers who want to move into the commercial space, if they’re consumer-orientated brokers, to work with Westpac about their offering where they can jointly face the market with our support. It’s one of the priorities under my leadership. So I see myself running the consumer business, but I’ve got a broader enterprise responsibility and I’ve got a broader responsibility to the customers I serve to help their businesses be as robust as they can. I think brokers realise they need to be more than a one-trick pony, so to speak. They can potentially be marginalised through digital disruption if they continue only to be a mortgage originator and not a relationship manager of their customer base.
MPA: Which clients are Westpac targeting over the next 12 months?
WS: I think that all the segments are pretty strong. We don’t have any particular no-go area. I think refinance activity will naturally lift and rise in a low interest rate environment, but I’d qualify that by saying that refinances are generally associated with another need. Brokers are attuned to reviewing their relationship with clients, and when a need arises, looking at overall borrowing requirements and which opportunity is best for them.
I think refinancers will grow as a section of the market whilst there’s uncertainty over the market and property prices. But if you look at the seasoned external commentators’ views on this, there’s going to be a soft landing – which would be my view – but still growth, and some segments represent strong growth opportunities.
We stand in the refinance space as we always have, but we’ll be looking to invest some capital in how we can help brokers do faster refinancing and making the progress easier for them. But investors remain a section we have an appetite for and obviously our mandate as an organisation is to help people into homes, so first home owners are important to us as well.
MPA: How would you like to be perceived in the broker channel 12 months from now?
WS: As someone who’s approachable. Certainly my goal is to meet as many of my aggregation partners and broking clients as possible in my role, and hear from them as to what their concerns are, their experience in the industry and what we could be doing better. So I’d like to be thought of as someone who is fair and transparent in their dealings and has a genuine desire to create the environment for people to do better. And [as someone who] absolutely respects the fact that the third party channel is a critical customer service differentiator, and represents choice, and we aim to support brokers on that basis.
MPA: How does your experience in banking set you up for this role?
WARREN SHAW: I’ve been with Westpac for 60 days, so I’m still learning the organisation. The bulk of my experience has been with NAB. I spent 27 years there and my first two roles were running the retail bank – the first party channel. I’ve got a pretty intimate knowledge of the mortgage product suites [and] consumer behaviour around mortgages.
Prior to that, I ran the mortgage business for NAB, where I provided support from the centre into both the third party and the first party channels. I’ve worked with most of the aggregation groups through that relationship. So I have a deep understanding of how the industry works.
This role here though is my first distribution role in terms of third party origination on the consumer side. That said, I have experience running the Banksia Financial Group. I was appointed CEO there in May of 2012. Banksia operated in the commercial third party space predominantly. That’s the linking piece, I suppose, between my NAB career and my Westpac career.
The appeal for me with this opportunity, as I look to relaunch my career after doing the work out on behalf of Banksia, is the landscape of opportunity in financial services, the growth opportunities which in my mind still remains the third party consumer mortgage space. The banks offer choice across lots of different channels, but in terms of pure acquisition and net customer growth, the third party space is clearly where the action is, and from my perspective I’m very interested in playing a role and shaping Westpac’s presence there.
MPA: Now that Tony MacRae has moved up to general manager third party distribution at Westpac and St George Banking Group, what does your role entail?
WS: My role as head of the Westpac broker channel is exactly that – to be the head and the frontman of Westpac’s offering into the third party space. Tony is now operating the consumer banking third party level, all of the brands in the Westpac stable that operate in that space are under his direction, but we felt it was really important to maintain a strong presence at the head of the Westpac brand itself, rather than have someone trying to do two things.
MPA: To clarify, you’re working on the residential rather than the commercial side?
WS: The Westpac division that I run is first and foremost a consumer offering, but I think there’s opportunities for us to work with our commercial team, who run an extremely good and very effective business in the commercial third party space. There are opportunities to work more closely together, to face into the market and help brokers who want to move from consumer to commercial as they look to diversify their business.
MPA: Are we likely to see any increase in cooperation between the banks in the Westpac group, and what will this mean for brokers?
WS: I’m new to the group, so I don’t bring any baggage around why one part of the group does one thing and one part doesn’t. My perspective is if there are opportunities to have synergies with other banks in the St George stable, we should take those, particularly around sharing best practice and innovation and technology solutions around service delivery.
But that said, we’re committed to a multi-brand strategy, so Westpac’s offering in the market will be different to the way St George brands will face the market. I think that’s appropriate with the different segments we want to attack. We have different customer bases and different needs in many cases, and we have broker relationships steeped over time that need to be respected as well.
I think an early example of where we’ve seen some cooperation already is the way accreditations are processed for the whole Westpac stable of brands, so if you’re a new broker and you want to be accredited to deal with both Westpac and St George’s banks you can do that in one process – you don’t have to go to four different banks. That is just a small example, but we think there are some synergies to extract.
MPA: What do you see Westpac doing particularly well that distinguishes you from the other major banks?
WS: I want to see us becoming famous for being connected, consistent and transparent – they’re the things that I’m passionate about. I’m passionate about people and creating environments for them to be the best they can be, in particular our BDMs, connecting them as closely as we can with the broking community to help them build their businesses.
As someone new to Westpac, I’m delighted with how our BDMs are perceived by the broking community generally. In the recent Brokers on Banks survey, nine Westpac BDMs were called out in the ‘Roll of Honour’ – more than any other bank. We consistently get great feedback about our BDMs. It’s my job to build on that great position.
MPA: So is this about more BDMs, or better trained BDMs, or better technology available to BDMs?
WS: It’s about all of those things potentially, but first and foremost it’s about really well-connected BDMs. I think brokers want to work with organisations that get them, and there has to be an investment in the quality of our BDMs on the ground. Also, where it’s warranted, an investment in more BDMs as more brokers are attracted to the proposition that Westpac provides. We’ll be ready to invest as the demand comes along.
In terms of our digital presence we can help brokers with CRM capability in terms of how they manage the relationships with their customers post-settlement. I think we have lots of information at a bank and somehow I’d like to find a way to share that with brokers who own the primary customer relationship in the mortgage space at least, to make sure that those customers remain. It’s good for us, it’s good for the broker.
MPA: Moving to Westpac’s appetite for property investors, are we likely to see further tightening in the coming year?
WS: It remains an important segment for us, it always has, but we need to work with our regulator APRA around the guidelines and the capacity we’d like to see us play at. We’re not going to move away from that framework. We’re open for business on property investment, we have great products and we think there’s capacity for us to do more. That’ll be our focus as we go into the remainder of this year and next.
We’re buoyant about the conditions generally. Overall levels of household debt are relatively benign – we see pockets of household stress and we’ll watch those closely, but broadly interest rates are low, customer value is strong, so that usually suggests it’s an environment with opportunities and we’ll continue to support it.
MPA: What can Westpac offer to brokers beyond residential mortgages?
WS: In terms of income diversification there are small things we already do around personal lending, etc, that brokers can participate in – home and contents insurance, etc, the ancillary stuff that normally comes with a home loan conversation.
But I think there’s an opportunity for those brokers who want to move into the commercial space, if they’re consumer-orientated brokers, to work with Westpac about their offering where they can jointly face the market with our support. It’s one of the priorities under my leadership. So I see myself running the consumer business, but I’ve got a broader enterprise responsibility and I’ve got a broader responsibility to the customers I serve to help their businesses be as robust as they can. I think brokers realise they need to be more than a one-trick pony, so to speak. They can potentially be marginalised through digital disruption if they continue only to be a mortgage originator and not a relationship manager of their customer base.
MPA: Which clients are Westpac targeting over the next 12 months?
WS: I think that all the segments are pretty strong. We don’t have any particular no-go area. I think refinance activity will naturally lift and rise in a low interest rate environment, but I’d qualify that by saying that refinances are generally associated with another need. Brokers are attuned to reviewing their relationship with clients, and when a need arises, looking at overall borrowing requirements and which opportunity is best for them.
I think refinancers will grow as a section of the market whilst there’s uncertainty over the market and property prices. But if you look at the seasoned external commentators’ views on this, there’s going to be a soft landing – which would be my view – but still growth, and some segments represent strong growth opportunities.
We stand in the refinance space as we always have, but we’ll be looking to invest some capital in how we can help brokers do faster refinancing and making the progress easier for them. But investors remain a section we have an appetite for and obviously our mandate as an organisation is to help people into homes, so first home owners are important to us as well.
MPA: How would you like to be perceived in the broker channel 12 months from now?
WS: As someone who’s approachable. Certainly my goal is to meet as many of my aggregation partners and broking clients as possible in my role, and hear from them as to what their concerns are, their experience in the industry and what we could be doing better. So I’d like to be thought of as someone who is fair and transparent in their dealings and has a genuine desire to create the environment for people to do better. And [as someone who] absolutely respects the fact that the third party channel is a critical customer service differentiator, and represents choice, and we aim to support brokers on that basis.
