Banks beware: Fast, cheap loans set to disrupt $1.9 trillion mortgage market

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There are predictions an Uber-like disruption is coming to the $1.9 trillion home loan market.

When you think about businesses that are most exposed to digital disruption, industries like taxis, retail or, ahem, newspapers are probably what spring to mind.

Market share will always bounce around for all sorts of reasons. But in an age of sweeping digital change, these trends raise an intriguing question. Is digital disruption a threat to the banks’ mortgage engine rooms, which are a pillar of bank profitability? A case in point is the United States digital lender Rocket Mortgage, a $US39 billion company that has expanded its market share from 1.3 per cent in 2009 to about 9 per cent at the time it floated last year.Many have tried to disrupt home lending in similar ways in Australia, with limited success.

Nano, a digital lender founded by former Westpac executives Andrew Walker and Chris Lumby, claims to have a fully digital process that can complete an approval for lower-risk loans in under 10 minutes. They are undoubtedly trying, through multibillion-dollar technology spending and their own in-house venture capital units.But those tipping a wave of mortgage disruption, such as Airtree Ventures partner James Cameron, point out banks have often struggled with major technology transformations. Cameron, whose fund is invested in home lender Athena, says banks are in some ways “victims of their own success”.

 

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Banks beware: Fast, cheap loans set to disrupt $1.9 trillion mortgage marketThe combination of excess returns and new tech-based rivals have stoked predictions an Uber-like disruption is coming to the $1.9 trillion home loan market. clancyyeates You forget that the Government uses interest rates to control the economy through monetary policy. Home loans rates are set by the government. If fintechs are offering rates lower than what the Reserve Bank wants then they will force them to increase rates.
Herkunft: smh - 🏆 6. / 80 Weiterlesen »

Banks beware: Fast, cheap loans set to disrupt $1.9 trillion mortgage marketThe combination of excess returns and new tech-based rivals have stoked predictions an Uber-like disruption is coming to the $1.9 trillion home loan market. clancyyeates You forget that the Government uses interest rates to control the economy through monetary policy. Home loans rates are set by the government. If fintechs are offering rates lower than what the Reserve Bank wants then they will force them to increase rates.
Herkunft: smh - 🏆 6. / 80 Weiterlesen »