Sony Bank ?not a threat? to Australian brokers

Experts believe Japan?s Sony Bank is unlikely to pose a threat to mortgage brokers, following last week?s announcement of its plans to launch in Australia.

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Sony Bank is an online business which, in theory, cuts out the need for brokers with its direct-to-lender approach.

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Speaking to Australian Broker Online, SAKS Consulting?s principal, Steve Patterson, was sceptical of its impact on intermediaries.

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?If brokers do their jobs properly, and are there to help people through the biggest financial decision of their lives, there will always be a need for them,? he said.

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?It?s a complicated process, and most people welcome someone on the other side of the kitchen table to explain everything.?

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Patterson believes the Big Four have too much of a stronghold on the market to be sidelined by a foreign bank.

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?Firstly, new and foreign entrants to the market traditionally haven?t done well. This is largely due to the strength, distribution and reach of the Big Four. ING Direct has been on the market for a while now, and is very aggressive, but still cannot compete with the majors.?

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?A lot have come and go with big plans ? none have gone that far. I would suspect the Big Four have 85% to 90% of the market. They [Sony Bank] have a hard road to walk,? he said.

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Patterson warned online banks would be more of a threat in the future, as a younger generation ? already adept at technology ? embrace online lending.

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?We may see more and more people seeking online means. However, that?s still a way away. There?s still the overriding issue of hand holding. There?s nothing brokers need worry about at the moment,? he said.

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If approved, Sony Bank will be the first Japanese bank to target private mortgages in Australia.

The Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui Financial Group and the Mizuho Group already provide corporate loans to Australian businesses.?

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Total: 7 comment(s)

Country Broker on 09 Jul 2012 10:36 AM

Very hard to see how a broker customer would change to an on line application suitation, customers come for advice and to discuss their requirments. This is why brokers have such a large market share. This will probably see more competition for the borrower who wants to and always was going to go on to a direct on line application.
They are not our market unless they find the on line application process that difficult they will end up with a broker anyway.

Damien on 09 Jul 2012 11:19 AM

Sony would be well advised to review just how unsuccessful Virgin's attempt at the same strategy was. If Sony seriously want market share,they would embrace Brokers, not ignore them. Just another Ubank

KT on 09 Jul 2012 11:30 AM

If price is the ONLY consideration, people will flock to it. Unfortunately many FHB and younger borrowers are thinking that way. It is the mortgage brokers role to ensure borrowers are not sucked in by cheap rates alone.

Borrowers need to think about product features (offset vs redraw), to cross or not cross-collateralise, to fix or not fix rates, think about repaying your loan in such a way that you don't miss out maximising your options when it comes to refinancing some time down the track.

These things brokers should be good at and adding value to their clients and it is something I'm sure online channels will not be able to provide

Phil from Brisbane on 09 Jul 2012 12:56 PM

They (Sony Bank) will do better than anyone is saying. The brokers , consultants and advisers tend to promote their own self interest,rather than the customer.The terms and conditions of many offers skew all the risk onto the customer and a high by world standards profit to the lender and broker . Customers now realise this is the new normal in the global economy and can compare online whats on offer and the terms and conditions as a best fit for their needs.

Mark Hewitt on 09 Jul 2012 01:10 PM

We do need to be very conscious that consumer behavior is changing fast and going forward people will be more and more willing to source a home loan online. Fulfillment is still a challenge but it won't be that way for ever and that is why AFG is investing in systems and tools to help its members with the evolving online world. Other brokers need to ask their aggregator what they are doing to help them.

Garry on 09 Jul 2012 02:10 PM

If they are foolish enough to use an online system without proper and professional advice then they deserve to get stung. Not the client type I deal with so it will never affect me. I wish them all the luck as they will need it.

A Broker on 09 Jul 2012 03:15 PM

I wonder if Sony Bany will give away a free TV or PlayStation with every new loan sold?

Source: http://www.brokernews.com.au/article/sony-bank-not-a-threat-to-australian-brokers-141460.aspx

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