2020 lessons we can’t leave behind and 2021 trends that will drive success

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2020 was one of the most incredible and disruptive years we’ve ever experienced, but mortgage brokers rose to the challenge. It’s important to reflect on the challenges and take the important lessons to position us for future growth and success.

Above all else, in 2021 brokers need to hold onto the tenacity, empathy, and hunger for more information that we witnessed – and applaud – this year.

In our last State of the Industry update for 2020, Mark Haron, Executive Director at Connective and Glenn Lees, Connective CEO, discussed their reflections and predictions for the mortgage broking industry.

You can watch the full recording or read the summary below.

Connective’s three most important tips for brokers in 2021:

  1. Use technology to strengthen your connection with customers and maximize the commercial benefits.
  2. Remain prepared for change; seek, listen to and learn from multiple sources.
  3. Don’t ever underestimate the value you deliver to customers; understand how to differentiate yourself

Reflections of 2020

Relationships and resilience are the cornerstone to success – and will continue to be.

The best brokers were galvanised by the challenges of 2020, they responded by reaching out to customers, guiding them through incredibly complex and tough situations, they cemented their role as a trusted advisor and they did all this while still preparing for BID and adapting to a changing landscape.

As times got tougher in 2020, brokers transitioned across multiple roles to strengthen customer relationships, acting as:

  • Educators – providing customers with critical information on a regular basis on issues such as repayment holidays
  • Triage points – coordinating customer enquiries with lenders because customers couldn’t get through to banks
  • Champions of choice – keeping customers updated on product changes and enhancements

It is this type of behaviour that will stand brokers as incredibly valuable to both customers and lenders. And when combined with the right technology and tools, will position brokers for future growth.

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2020 has been a perpetual state of preparation for reform.

Brokers have worked hard to understand what BID will mean for them and to approach it as a ‘badge of honour’ in terms of the level of protection it will provide customers – we strongly believe it will elevate brokers for millions of Australians.

We’ve also been working hard to support brokers prepare with multiple resources available on our BID education hub.

Beyond BID – we witnessed so much change and adaptation in the industry including: complexities in managing lender turnaround times and processes, clawback provisions, and approaches to winding back repayment holidays. Changes to responsible lending obligations were also announced and we continued to advocate for brokers in all of these conversations.

Accelerated digital transformation of how brokers work

Our industry was moving towards more digital ways of working pre 2020, but this transformation has undeniably accelerated in 2020 and will continue in the future.

We witnessed the following trends:

  • More virtual ways of working: We all experienced new digital processes and virtual meetings with customers and lenders - and we’re excited about how these will evolve.
  • Digital L&D Program: More brokers than ever before were able to access more growth opportunities and insights via our digital Learning and Development programs which replaced our normal physical events.
  • More effective digital communities: Faced with overwhelmed lender systems and processes, the efficient flow of information between lenders and brokers became increasingly challenging, but more critical than ever. Our digital hub for brokers to more easily connect with lenders in real time – Connective Community – has empowered brokers by opening up more efficient and transparent lines of communication.

Predictions for 2021

Brokers rose to the challenge that was 2020 and we applaud them for this. Now, it’s time to ensure they’re ready for what’s next.

As the country and industry navigates a phase of resurgence, not just from COVID-19 but also from Royal Commissions and the fatigue of preparing for a changing regulatory landscape, brokers have an opportunity to re-build and differentiate themselves.

BID in play but reform not over

There was a lot of preparation for BID in 2020, but there’s more reform to come and the best thing brokers can do for their business and their customers is stay one step ahead.

There are still conversations to be had to ensure BID is applied fairly across the industry. It is critical that government and ASIC ensure a level playing field between direct channel, lender driven regulation and indirect channel regulation.

Originally only those defined as a mortgage broker would have to meet BID. Now, anyone who provides consumer credit assistance will need to comply, so many asset brokers will have to meet BID obligations come 1 March 2021 as well.

We also need to address a disparity issue on clawbacks in 2021, with the proposed changes taking effect from January. We feel there is a need for further modifications to the proposed arrangements.

We will continue to work with industry bodies and policy makers to ensure that the reforms do not unfairly apply to brokers.

Balance humanity and technology in customer relationships

For many brokers – in 2020 they went from facilitating a business transaction for customers to becoming a confidant and trusted advisor.

Growth in 2021 for mortgage brokers will require more regular and deeper connections with customers, but these human connections will only be truly valuable if they are scalable with the right technology that can capture and leverage customer intelligence, according to Australia’s largest mortgage broker aggregator, Connective.

After the rollercoaster of 2020 its important brokers don’t slip back into a transactional relationships with customers because there’s so much opportunity for growth. Take your client engagement to the next level with automated, personalised marketing campaigns with Digital Marketing Hub. Find out more HERE.

Brokers need to hold onto to these connections and keep up the check-ins with customers, but they also need to be able to capture every conversation and every detail in a way that adds commercial value. We will continue to evolve our Mercury platform to facilitate this with as much automation as possible.

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Diversification will help drive growth

Diversification will be even more valuable in helping brokers to grow their revenue streams in 2021.

To do this effectively, brokers will need to ask themselves what their customer base looks like so they can evaluate what opportunities for financing exist beyond their current relationship.

Asset financing can help solidify a brokers' position as a valuable, diverse financial consultant and when exploring asset financing, Connective has a processing platform QuickAF to support brokers.

Growing impact of tech: how disrupters have become enablers

There is a resurfacing of Fintech as a potentially disruptive force for our industry, however we see 2021 as a year of increased collaboration with technology that will add value to all industry participants.

86400, Zip Business, CashDeck - these are really enablers of additional and more effective services to customers for brokers, not disruptors.

Look outside the square for growth and change

One of the most important things brokers can do is to hold onto their thirst for more knowledge, more insights, more updates, and more ways to differentiate themselves with customers.

The broking industry needs to look beyond its own ‘four walls’ to provide deeper and broader business skills, education, and tools to brokers that are essential for success in an unpredictable economic landscape. What’s exciting is that hundreds of you have already embraced this mindset via programs such as our Melbourne Business School Masterclass Series.

Watch the recording of the State of the Industry Update