CBA offers end-to-end online mortgage sales

Commonwealth Bank has reintroduced an online home loan application facility for new-to-bank customers, as part of its strategy of allowing customers to deal with the bank any way they want.

CBA's general manager home loans, Dan Huggins, told delegates at RFi's Mortgage Innovation Summit that, until a few months ago, established customers could use their NetBank accounts to apply for mortgages but new-to-bank customers could not apply and complete their loan approvals online.

Big banks have been criticised for being laggards in the development of online mortgage distribution, preferring to focus on their branch and broker channels.

The exception is National Australia Bank, which offers a complete online banking service through UBank.

CBA experimented with online mortgage sales some years ago, through its Homepath brand. That business was shut down in 2008 and, at the time, the bank said it originated less than two per cent of its mortgage sales through Homepath.

Times have changed. Huggins said that with some products 50 per cent of customer acquisition was now online.

Thirty per cent of referrals come through social media. "People want to see some user content before they use a service," he said.

Huggins said most customers still considered mortgages, along with investments, as complex products that should involve some personal interaction.

"What people want is a seamless multi-channel experience, from mobile and online to the telephone and the branch. We allow the customer to complete their mortgage application online from end to end but it is only a small number of people who want to do that. We let them choose."

Firstfolio chief executive Peter Andronicos said multi-channel was a more viable proposition for mortgage sales than online-only. Firstfolio's eChoice divisions services 450 mortgage brokers.

"Ninety-five per cent of people now do their property searches, loan affordability calculations and mortgage market research online," Andronicos said.

"But they still need personal engagement. We have a telephone-based concierge, where we get more involved when they need someone to work with them."

Another speaker at the RFi conference, Gadens Lawyers partner Paul Armstrong, said one issue that could make it difficult for lenders to offer online-only mortgage sales was the emphasis placed by regulators on responsible lending rules.

Armstrong said: "The question is: how do lenders demonstrate that they are lending responsibly when they are only dealing with their client through a portal?

"I can see a situation where, if there is a dispute over a loan, the customer will argue that they did not know what they were getting into because no one sat down to go through it with them.

"The regulators are looking at the issue of responsible lending more closely."