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As recently reported by Broker Daily, an S&P Global Ratings report discussed the state of broker market share in Australia, with the author saying banks are poised to regain control of the market through investment in technology.
S&P Global Ratings credit analyst Simon Geldenhuys said banks could “dilute the mortgage broker value proposition” and “regain ground” through investment in technology, such as AI, that can improve speed, efficiency, and customer experience, all while cutting costs.
Finsure’s CEO Simon Bednar addressed the report and said the tech-focused strategy of the banks was “fundamentally flawed”, as it fails to address the relationship aspect of the role that has kept broker market share consistently rising.
“The level of service that mortgage brokers offer their customers remains the best in the industry and is the key reason why loan originations by brokers have surged passed 76 per cent,” Bednar said.
The aggregator executive said that while technology does enable better practice in the industry, it isn’t the “silver bullet” that will topple brokers.
Despite the evolution of technology in the industry, time and time again, customers seek the human interaction and connection that brokers provide.
Bednar said any digital solutions that try to push out the human element will “ultimately fail.”
“While AI and technology will potentially enhance and augment the lending process, there will always be a role for a broker,” Bednar said.
Further to providing a service that technology cannot, brokers provide choice.
Proprietary channels limit that choice as they’re limited to the institution’s lending criteria and products.
On top of that, brokers are better able to cater to diverse needs and niche products that some borrowers require.
Shore Financial’s founder and CEO Theo Chambers said the tailored solutions available through the broker channel will keep market share strong.
“This unique broker advantage of true comparison and flexibility is something no single bank can replicate. Emotional milestones like buying a first home or refinancing a family property require human guidance, not just digital tools,” he said.
Highlighted in the report is the use of AI and how it can streamline processes and deliver quicker and more efficient results for lenders.
This is also true for brokers, said Chambers: “The future of lending isn’t brokers versus technology – it’s brokers enhanced by technology.
“The most forward-thinking brokers are using AI and automation to streamline admin, speed up loan processing, and deliver faster, smarter outcomes. Technology isn’t replacing brokers; it’s empowering them to deliver even greater value. With ongoing client care, regular pricing reviews, and long-term support, brokers are building loyalty in ways algorithms never could.”
Rather than seeing technology as a supplement or threat, brokers are being empowered by these systems to offer a better service.
While this report may have stirred up some debate, banks are still embracing brokers, as was witnessed in the last broker value proposition controversy involving The Australian Financial Review.
“This isn’t about choosing between proprietary and broker channels – it’s about being great in both,” said NAB’s executive for broker distribution, Adam Brown.
According to Simplicity Loans and Advisory broker Isabella Constantinou, the “smarter” banks will continue to invest in both tech and brokers.
“We’re not just intermediaries, but business partners who bring in well-matched, credit-ready customers. The future is less about banks versus brokers, and more about how both can leverage tech to create better outcomes for clients together,” she said.
While AI has a place in the industry, it is largely used to eliminate the administrative tasks that allow for more client-facing time.
Replicating the value a broker provides is not something this tech can achieve.
“The broking sector utilises the latest online platforms as tools to make the process of obtaining a loan as efficient and simple as possible, but we don’t see that as a substitute for human interaction,” said Bednar.
Those in the industry believe high-quality personal service and expertise will keep broker market share strong.
With recent data placing broker market share at a record high of 76.8 per cent, any plans to push brokers out are far from reality.
[Related: Report predicting ‘gradual’ shift to digital mortgages]
