Australia has lost its confidence in major banks, and non-major banks are on the rise. Now more competitive and more trusted than major banks, these challenger banks are starting to be considered the better choice among mortgage customers and brokers.
In this article, we take a look at how non-major banks are dethroning major banks in Australia and what this could mean for you.
As innovative lenders come into the scene, it’s becoming inarguable: the Big 4 are losing the market share dominance.
In fact, the biggest takeaways from last year’s KPMG Major Australian Banks report and Third-Party Lending Survey were that the major banks’ combined market share decreased by 81.2% and non-major banks were already leading, with the top banks being Bankwest, Macquarie Bank, and MyState Bank.
Part of this can be attributed to simple loss of vigilance. Big banks had so little competition for so long that they didn’t need to adapt as quickly to changing market forces or the new technology that customers have become accustomed to.
But part of this also has to do with a new perception that major banks are not to be trusted. In the wake of the Banking Royal Commission, Deloitte Trust Index revealed that financial institutions have a lot of work to do when it comes to restoring customer trust.
The most important thing for us brokers is that our customers’ needs are met. Our delight is in delighting our customers. Bearing this in mind, let’s take a detailed look at what we look for in lenders, and why non-major banks are winning compared to older, more traditional banking services.
In general, non-major banks in Australia are growing in leaps and bounds by embracing customer-centricity and fostering healthier relationships with brokers and in turn the customer.
While major banks have suffered considerably in terms of reputation, non-major banks have been building that reputation. We are finding it easier to work with non-major banks as we can get our customers what they need.
For customers, the rise of non-major banks is entirely positive. This is primarily because of competition. With dozens of non-major banks vying for a customer base, it drives the prices down. It also forces even major banks to compete with smaller banks and, ultimately saves money for the customer in a variety of ways.
Customers are going to find that they have far more options than they did even just a few years ago and that they can work with smaller banks to get exactly the products and services they need.
This leads to better customer care, more affordable rates, and an overall more positive experience.
Since customers can shop around, they’re also more likely to find and qualify for the products they need.
Major banks have a long way to go if they want to restore customer faith and become competitive again. More competition is only a good thing, and major banks are going to need to win back their customer base after the Royal Banking Commission findings.
Are you looking to buy your first home or refinance your property? Shore Financial has access to over 65 non-major lenders. We can provide low rates, quick transactions, and an entire panel of competitive choices to help you maximise your opportunity through strategic home loans. Contact us today to find out more.
Disclaimer: This is general information only and should not be taken as financial advice. Please speak to a Shore financial planning professional before making a decision on your home loan.