Brokers are optimistic despite regulatory challenges – survey

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    MyState Bank’s brokers are optimistic on the industry’s short-term and long-term future despite regulatory changes, increasingly risk-averse clients, and the growth of online lending portals, according to a recent survey by the Tasmanian-based bank.

    No one in the survey said they expected to make a loss in the second half of 2018. In fact, more than 70% said they expected either strong (19%) or moderate (52%) business growth.

    “The positive outlook brokers have for their segment of the industry is encouraging for smaller regional banks like MyState Bank who have a strong mortgage broker focus,” said MyState Bank group executive broker distribution Huw Bough.

    Over 90% of brokers said they needed either significantly (59%) or moderately (32%) more time and resources to do their jobs because of regulatory changes forcing them to increase scrutiny over client information.

    Respondents also expected the share of residential mortgage origination to grow in the future. Almost 40% predicted it would increase from the current 55% to 60% or more. Similarly, almost a quarter (24%) predicted broker market share would increase to 65% or more and just under 15% of respondents expected broker market share to rise to 70% or more.

    Faster application processing (35%), superior relationship management skills (26%), and more automated artificial intelligence systems (16%) were ranked as the top three things needed to sustain a successful broking business in the future.

    However, more than 40% believed their current business model was robust and would not need to be adjusted to succeed, while 27% said they were looking to adopt new technology and software to remain competitive.

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    Original Article