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We're better together,” says Commonwealth Bank’s executive general manager, home buying. Talking about the relationship between the bank and its brokers, Michael Baumann says CBA is continually working to make the partnership stronger, brokers’ lives easier, and processes simpler for brokers’ customers.
Baumann joined CBA 11 years ago in group strategy, then moved on to leading teams and businesses across payments, everyday banking and consumer finance. Now, looking after home buying products and the third party banking channel, he is “excited” to work closely with the bank’s broker partners to deliver exceptional customer outcomes.
As as result of the “incredible amount of activity” over the past 12 months, particularly in the refinancing market, Baumann says there has been increased pressure on brokers, as well as on the bank’s support and operations teams.
Understanding that this level of business activity has caused turnaround times to be a pain point for brokers, Baumann says CBA has made significant investments and mobilised additional resources as demand has grown. It has brought on new team members, scheduled thousands of hours of overtime, and launched spot coaching for credit officers dealing with more complex cases.
However, Baumann knows there is more to be done. He says, “The exponential growth in home loan application volumes has placed considerable pressure on our support teams and operations, impacting turnaround times in particular for more complex applications. We are still not happy with where we are at, and there is further work underway in relation to our operating model, broker application system and processes aimed at improving data quality, the efficiency of credit officers and the processes and systems that support the broker channel.
“We have made some great improvements in our turnaround times over the past weeks; if brokers look at our Service Update page on CommBroker I hope they will be pleasantly surprised.”
Providing the right support for customers
On top of managing the growth in home loan demand and having to evaluate how to work remotely during the pandemic, Baumann says one of CBA’s biggest priorities has been supporting its customers. The bank approved more than 158,000 home loan deferrals for customers impacted by COVID-19.
Baumann says he is incredibly proud of the work done by the different teams across the business.
“Throughout COVID, our specialised hardship teams contacted every customer in a deferral to check in and ensure they were receiving the most appropriate support,” he says. “It is through this customer contact and innovative product solutions that the vast majority of our customers have now resumed regular repayments.”
While the deferment program ended in March, the bank is committed to providing tailored assistance to customers on a case-by-case basis. For example, in November, CBA announced a freeze on forced sales until September 2021 for eligible customers impacted by COVID-19 who are struggling to make loan repayments. This aims to give them peace of mind so they can focus on their health, families and getting back into the workforce.
Delivering the right technology to keep up with increased demand and make things simpler for brokers has also been a key priority for CBA over the past year and a half.
In March 2021, the bank launched its new DigiDocs process for customers with a home loan in NSW, Victoria or SA; this allows them to receive, sign and return their home loan documents digitally.
It has also uplifted ApplyOnline and its internal systems to support changes to liability and conduct verification requirements to improve the credit assessment process, while also relying on comprehensive credit reporting.
“Recently, we launched a new serviceability calculator with in-built business rules, policies and guidance text to provide a better understanding and transparency of CommBank policies and a shared view with the CommBank Credit Team, enabling consistency of technology and serviceability outcomes. We are in the process of integrating with broker head group CRMs, and some are already on board,” Baumann says.
CBA's green home loan
Beyond supporting customers with loan payment deferments and other financial matters, Commonwealth Bank is doing its bit for the environment.
“We recognise the important role we play in limiting the impacts of climate change, and as part of our commitment to the responsible global transition to net zero emissions by 2050 we announced the launch of our new CommBank Green Loan,” says EGM of home buying Michael Baumann.
“The new loan makes it easier for customers with an eligible CommBank home or investment loan to buy clean energy products, such as solar panels or battery packs, with an ultra-low 0.99% per annum secured fixed rate with no establishment fee, monthly loan service fee or early repayment fees.
Reimagined support for brokers as demand continues
Baumann expects the strong demand seen over the past year to continue across both the owner-occupier and investor segments.
He adds that fixed rate home loans will probably remain popular with borrowers, reflecting the current competitive pricing. CBA has a 2% fixed home loan rate for owner-occupiers paying principal and interest in the Mortgage Advantage package.
“Over the last 12 months, market growth rates have increased mainly through the owner segment, with recent strong growth in the investor segment,” Baumann explains.
“Market-new listings and mortgage activity have picked up strongly and recently moved above prior year levels. These factors, combined with historically low lending rates, should continue to drive mortgage growth.”
As CBA continues to support the third party channel, Baumann says the major bank has “reimagined” its service model for brokers, investing in support, education and training resources. This includes providing additional relationship managers and portfolio managers, credit coaches, educational and training resources, as well as regular credit workshops.
The bank has also simplified its accreditation process and uplifted its onboarding experience. Newly accredited brokers will benefit from a six-month relationship support program so they get the right level of support, guidance and engagement from CBA in those “critical first six months”.
Baumann says this will help set brokers up for success and let them experience the value that CBA can add to their business and customers.
“Our new third party strategy focuses on continually improving the overall experience to make our brokers’ lives easier, processes for their customers simpler, and our partnerships stronger,” he says.
“We’re doing this by transforming operations, providing brokers with enhanced support, strong engagement and recognition, simpler processes, and strong relationships across the industry to turbocharge the potential of our partnerships.”