Contact: Louise Denver
Deloitte
Financial Services Media Relations
+61 (0) 2 9322 7615

Contact: Peter Rollason
Deloitte
Partner Corporate Finance
9322 7972

Finding competitive advantage in Australia’s $200bn mortgage industry in 2005 will be increasingly difficult says a Deloitte analysis of the Australian mortgage industry, ‘At the cross roads 2005’.

‘The real battleground of the future will be for control of the distribution channels of direct, franchising and third party,’ says Deloitte banking and securities leader, Peter Rollason.

‘The long term winners will be those who control or own the distribution channels.

‘The emerging franchising channel is also of increasing interest with equity, long term relationships, brand and players committing their ‘skin in the game’ all adding up to franchising success for the lenders,’ he says.


Broker consolidation – who will be the acquirers?
Consolidation in the influential brokers' domain will also define the landscape in 2005 and 2006.

The jockeying for position has already begun as to who will be the acquirers in a sector of the industry that has grown by 37% year on year and now has 4,000 individual and organisational members. 

‘Additional customer power is on offer to the bank willing to be bold and utilise its financial planning arm to make a play for a large mortgage broker’, says Peter Riedel, Deloitte partner in Corporate Finance and one of the authors of the report.
 

Strategies for growth
“Banks, non bank lenders, mortgage managers, brokers, non conforming lenders, securitisers, mortgage insurers and others in the industry looking for growth need to come up with intelligent choices around retention, sales, regulation and risk management.

“Regulation and risk management are increasing costs but are also providing players with opportunity for growth,” says Peter Rollason. “It is an important debate in an industry that touches the pocket of all Australians.”

The articles in the Deloitte report point out that new ways of dealing with and retaining the customer are critical to sustaining and growing market share.

These include the need for new skills and competencies and new combinations of current skills to manage credit, operational and market risk. In addition reverse mortgages are new but come with inherent risks for an ageing population.

Better retention strategies based on an understanding of how customers behave are essential as the market is not always what it appears to be.  For example ‘the battler’ can be a more valuable customer than the professional as he or she remains on the books for longer.
 

Beware mortgage fraud
John Alfano, Deloitte forensic director analyses the methods being used to ‘dud’ the system and outlines 10 ways for mortgage providers to improve their resistance to fraud. 

Analysis and comment on these key strategic factors in the mortgage industry form the basis for the points of view in the Deloitte report.