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ISSUE 9.14 July 2012
Sony Bank faces tough sell without brokers Foreign banks have welcomed competition from Japan’s Sony Bank, but their new rival may find onlineonly mortgages a difficult proposition
Citibank’s head of broker distribution Aaron Milburn can see the importance of online mortgages increasing over time, as the Australian market undergoes a demographic shift. “The Australian consumer is naturally migrating to differing ways of interaction with their bank,” Milburn told Australian Broker. “Online will become a far more important medium than it is even at today’s level, and the generational shift will demand this channel of doing business, so banks will have to adapt to capture a share of this volume”. Recently, Japanese institution Sony Bank signalled its intention to launch in Australia, with a direct-only banking model that would include online bank accounts and online mortgages. The challenger appears to be banking on this very online shift, and its successful experience in Japan. While online mortgages have long been discussed, researched and even launched in Australia – most recently NAB’s UBank Home Loan – success has at times been elusive. So while international competitors ING Direct and
Cold trail Broker heads to court to pursue trail deposit refund Page 2
Made in Japan Sony Bank ‘not a threat’ to brokers Page 4
Data wars War of words erupts over new property index Page 6 Aaron Milburn
Citibank both welcomed the competition benefits for consumers Sony Bank might bring, the bank may do it tough without brokers. “Having our own direct distribution channel – a hybrid phone and digital experience – has provided us with key insights into consumer preferences,” ING Direct head of delivery Lisa Claes said. “Some of our more sophisticated and digital-savvy customers prefer this channel, however, the majority of our customers largely value the opportunity for face-toface interaction. This customer preference aligns with and supports the broker channel.”
A strong consumer brand – like Virgin Money, for example – was no guarantee of success Claes said. “Banking, especially mortgages, is an industry infused with a degree of complexity from both a product and value chain perspective,” Claes said. However, Milburn said “there is always room” for competition. “You can look to Citi as an example of that innovation bringing the first ever line of credit into the Australian market. International banks will continue to look to Australia to further their brand coverage as it is such a buoyant market compared to most globally.”
Inside this issue Viewpoint 19 Planning for commissions Forum 20 Older borrower declines Toolkit 22 Property and SMSFs Insight 24 Getting strategy right Market talk 26 Understanding Gen Y People 28 Bankwest gets commercial Caught on camera 29 FBAA’s inaugural conference