Heritage Bank is overhauling its mortgage servicing platform in a bid to originate more home loans through its broker channels outside of Queensland.The reorganisation of mortgage servicing coincides with a move by the bank to open two proprietary branches in Sydney later this year.Chief executive Peter Lock said Heritage was preparing to add to its branch network outside of Queensland over the next three years, with plans to eventually expand in Victoria."We are starting with branches in Castle Hill and Parramatta in Sydney," he said."We will hopefully get that up to six sites in NSW and when that's bedded down we will look to Melbourne."Lock said he still sees value in branch distribution despite the increasing consumer preference  for digital channels."We don't think the physical branch is dead," he said."We think it will decline because of the rise of digital platforms, but we think the combination of the two is a great strategy."Lock said the bank was also considering adding to its 59 branches parts of north Queensland."We're looking at ways we might do that, including by building on the community branch model that we've introduced in areas such as Palmwoods on the Sunshine Coast," he said.Heritage is heavily reliant on third party distribution outside of Queensland, with around one third of its $8 billion mortgage book originated through brokers in NSW and Victoria.The bank decided to re-engineer its mortgage servicing platform after a survey of brokers revealed shortcomings with the existing system.Details of the changes were outlined in a memo sent to brokers, in which the bank said it was moving to a "case-ownership model" that guarantees all stages of a home loan application will be serviced by a single staff member.Heritage concedes in the memo that its mortgage processing process had not always met the expectations of brokers. "At Heritage, we understand that sometimes our service levels have not met the expectations of you or your clients," the bank said."This feedback has been very important in driving change at Heritage and we are investing a significant amount to improve our broker and customer experience."There will be a raft of changes that you will start to experience as we improve our mortgage process."Heritage also revealed in the memo that it was temporarily suspending sales of its consumer credit insurance product following a report published by ASIC last week found rampant mis-selling of poorly designed policies by the major banks.While Heritage's CCI product was not cited in the regulator's report, the bank has decided to withdraw it from sale pending changes to how it is structured."This is an interim decision while the CCI industry redesigns its products to improve outcomes for customers," the bank said in the memo."Heritage will continue to monitor the market for new and improved CCI products and will consider offering CCI again once a more customer-focused CCI product solution is identified."