National Australia Bank has sent a firm signal that it will be retaining the 86 400 brand after the new subsidiary announced it was deepening its footprint in the mortgage broker market.
From this morning the 86 400 “Own” home loan will be marketed through 1400 brokers affiliated with the Choice aggregation platform.
86 400’s Own home loan is already marketed through most of the country’s big mortgage networks including AFG, Connective and Vow.
The distribution deal with Choice will extend Choice’s exposure to third party distribution to 75 per cent of the broker market
86 400 chief executive Robert Bell indicated that the neobank had experienced rapid mortgage growth since late January when NAB announced it was acquiring the business.
In January 86 400 had A$270 million of settled and approved mortgage loans on its books, but that has more than doubled to $555 million.
“Our lending products are experiencing incredible growth, with currently over $550 million in home loans settled or awaiting settlement,” Bell said.
“Partnering with Choice, one of Australia’s largest and most respected finance broking operations, will help extend our reach even further, bringing our award-winning digital home loans to even more Australians.”
The deal with Choice is strategically significant because it strongly indicates that 86 400’s new owner plans to retain the subsidiary’s moniker as a retail brand.
The expansion of 86 400’s broker network comes only a week after the Federal Court approved a scheme of arrangement for the acquisition, which NAB is expected to implement tomorrow.
Retention of the 86 400 brand makes strategic sense given that much of the value in the business lies in its modern loan origination system that offers automated and real time processing of mortgage applications received from brokers.
While NAB’s internally developed digital banking platform UBank markets mortgages directly to customers through its website, it has no presence on the lender panels of big aggregators such as AFG and Choice.
While NAB has not confirmed whether it plans to withdraw UBank as a brand, the deepening of 86 400’s presence in third party distribution suggests that its days might be numbered.
86 400 loan origination system, which is viewed as one of the most efficient in the lending industry was developed in partnership with Sydney technology providers, Loanworks and Simpology.
The cloud-based system provides a straight-through environment for processing of digital loans that is fully integrated with aggregator platforms.
On its website Loanworks claims that 86 400’s automated loan system has lower error rates and higher processing speeds than legacy platforms that rely on manual intervention.
Simpology, which is now partnering with ANZ, P&N Bank and Latrobe Financial, developed the software that operates the 86 400 mobile banking app.