The Future of Finance Brokerages

Throughout the month of May, Vendorable’s Co-founder Jason Weeks and Chief Business Development Officer Paul Hughes attended the MFAA’s Broker2020 national conference events. Vendorable attended as part of the Fintech Freeway representing the property technology community to brokers.

Australian property and mortgage broking are intertwined. Growth in broker originated mortgage finance over the past 20 years has been consistent, and has accelerated post-GFC. At present financial institutions report that nearly 60% of residential loans arrive via broker, rather than direct origination. This makes brokers themselves an integral part of both the property and finance industries.

With new regulation comes new challenges and the mortgage broking community is no exception. Increased regulatory scrutiny of fee structures, particularly trailing commissions, is arriving at the same time as pressure mounts on both lending to foreign investors and loan to value ratios. In addition to these headwinds, new digital products such as Uno continue to streamline and move funnels for loan origination, testing the strength of broker client networks and relationships.

In the context of this overall challenging environment, and in speaking with brokers nationally, there were two themes that were discussed regularly in the context of ensuring the strength of both the industry and individual practices: embracing new technology and increasing client integration.

Embracing new technology for internal practice management with the likes of Simpology, Bankstatements.com.au and Ezidox increases the speed and functionality of document management while increasing integration with lenders and distribution channels. External opportunities for alternative financing with the likes of Spotcap, Moula & Prospa present new financing alternatives for their clients.

Greater client integration provides a more defensible position for brokers with their clients. This is where we believe Vendorable provides an opportunity to be more integrated with clients and their needs. Vendorable provides finance brokers an opportunity to be involved with clients transacting in property. Entering the process for a property transaction earlier allows brokers the opportunity to maintain clients, reducing churn and providing flexibility around periods of buying and selling.

How do we do this? Vendorable is a platform for the procurement and contract management of real estate services. In this ecosystem professionals including the likes of finance brokers can either operate on behalf of or in conjunction with the process for contracting and managing real estate agent services. Working alongside clients earlier and at each stage of any transaction adds value and increases both the quality of a relationship with a client as well as density of information known about a client.

Finance brokers looking to the future indicated to us the likelihood of industry convergence towards integrated practices, including service professionals such as accountants, financial advisors and legal practitioners. Property is often the largest dollar value asset class of clients. In this context, having a greater understanding of and involvement in property transactions will be essential to understanding their financial position, lending requirements and personal financial strategy.

Finance brokers should look to the likes of Vendorable and other technologies that increase their internal practice efficiency and inclusion in their clients’ transactions.