Given today’s rapidly changing market conditions and the growing financial pressure on households, Australians embarking on one of the biggest financial commitments of their lives place a high value on broker support. The survey found brokers and borrowers agree that the top concerns when applying for a loan are rising interest rates, the impact on an applicant’s financial situation and rates/fees.
For the first time, the survey interviewed borrowers, and it is noteworthy to see a gap between what they expect when signing up for a mortgage and what brokers consider relevant. While the borrowers expressed their desire for more attention during the start of the customer journey, only 8.7% of brokers surveyed focussed on the preliminary assessment and 9.4% on the initial consultation.
Building trust is another critical factor for the borrowers surveyed. 1 in 4 rated trust in their broker as important when applying for a mortgage, yet this was on the radar of only 1 in 25 brokers.
Supporting customers
When managing existing customer relationships, the brokers surveyed worked hard to meet their client's expectations and deliver quality customer service. Asked if they noticed expectations changing over the last 12-24 months, brokers reported that their customers wanted to see them less in person, expected constant updates and wanted them available after hours and on weekends. To support their customers, 24% of brokers had increased their digital communication, 15% had expanded their out-of-hours availability, and 15% had upped the frequency of client conversations and status updates.
Reaching beyond a transactional relationship to build these connections – at a time most relevant to the customer – helps create brand stickiness for client retention and advocacy. Survey respondents reported that referrals remained their preferred way to gain customers outside mortgage aggregators - this is a consistent finding across the 2022 and 2023 surveys.
Turning to technology
To improve the customer experience, 17% of brokers surveyed planned to adopt new digital solutions over the next 12 months. This metric was up 9% from the previous year’s survey. With so many borrowers rolling off fixed rate terms onto much higher rates in the coming months, data-driven mortgage broker tools and platforms are vital in improving customer experiences.
With brokers reporting a delay in application processing times due to the rapid rise in interest rates affecting loan eligibility, digital tools can help brokers make faster decisions about a customer’s borrowing capacity. From providing a more comprehensive view of pre-qualification information to simplifying processes, digital solutions can free brokers up to support customers as they face the fixed-rate mortgage cliff.
Identity verification incorporating biometrics is an example of a technology that will play an increasing role in a broker’s workflow. The technology matches a unique physical characteristic such as a fingerprint or face against a trusted identity document to confirm that the applicant is who they say they are. This process occurs in seconds without added friction.
Nearly a quarter of the brokers surveyed expect to take on more refinancing loans this year, making it all the more important to have the right tools on hand to make their job simpler and easier.
Looking ahead
In these challenging economic times, it’s easy to see why brokers nominated interest rate moves, inflationary pressures and housing prices as the most likely factors to impact lending assessments over the next 3 to 5 years.
However, the consumer survey responses suggest that economic factors are not all that’s on borrowers' minds. When asked about their concerns when applying for a loan, they rated loan approval turnaround as less important than the availability of sustainable loan options. It’s just one indicator of changing customer preferences, and it points to the value of brokers using trusted data and predictive analytics to get ahead of trends that impact future purchasing behaviour.
Interested in finding out what else the Equifax Mortgage Broker Pulse Survey 2023 discovered? View the full survey results.
For more information about Equifax mortgage broker tools and solutions, contact our team.
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