Loan transactions being written by brokers and third-party providers are significantly rising, with almost half of major bank approvals now coming through these networks.
The question is asked whether these changes in consumer lending behavior is purely based on the Brokers value proposition, which mostly rests on a consumer ﬁrst service model, or have customers caught onto the realization that more lender options could mean a better deal for them?
In search of impartial research on the topic, I found the 2016 Consumers on Brokers report by MPA to be the most current and holistic. The motive behind their study was to understand the shift in consumer financial decision-making, and what Australians were essentially looking for when it comes to the broker lending channel. Several noteworthy results in favor of using a Broker, with research showing 95% of respondents have used a broker in the past, and 76% of those would use a broker again.
Despite the fact that a wider lender panel and significantly larger range of loan product could very well result in a sharper rate, it seems that customers seek service and support, and that is the top reason why they are coming to Brokers. In this report, 40% of respondents picked ‘help with the application’ as their principal motive for using a broker. 25% of the respondents opted to use a broker service in search of a better interest rate, and 27% required access to specialist lenders or a unique product scope.
Consumer lending behavior has gone through a period of major change and it is continuing to move towards utilization of a Broker service. The variety of products and services and unusual deals available in the finance sector is a maze that can be challenging to navigate. Dealing with a Broker, who is an expert in the field of lending, means a more simple process for you and perhaps a better fit and a better deal.