Customers choosing home loans have traditionally either negotiated directly with banks or worked with a broker to secure the best loan that particular broker could find them.
But with hundreds of lending products on the market and many brokers working with panels that limited them to a small subset of loans, consumers lacked the information to ensure they were getting the best rates and product features.
Fintech Hashching has turned the process on its head by negotiating and de-branding a range of home loan products, which are then referred to brokers along with customer prospects.
Because customers choose loans based on their attributes and aren’t told which organisation the loan comes from, brokers can’t rely on simply steering customers to banks they are familiar with – or that provide the biggest commissions.
Customers rate brokers based on their service and outcomes – providing clarity for buyers and positioning the company as a disruptive force in an industry that has long been more top-heavy than most.
As chief operating officer of Hashching, Siobhan Hayden has helped guide the firm – founded by a team of ex Westpac bankers – from the seed of an idea into a disruptive force in the mortgage broker business by using social-media conceits to restructure the relationship between banks, customers, and brokers.
“Traditional incumbents have been comfortable that they’re too big to fail or to be disrupted,” she told Information Age.
“But there hasn’t been an industry to date with significant power at the incumbency level, that hasn’t been significantly interrupted or disrupted.”
Hashching COO, Siobhan Hayden.
Customers expecting more
Hayden – who will this Thursday morning present a talk ‘How fintech start-ups are successfully challenging the big banks at an ACS NSW breakfast this Thursday – believes the consumer-driven aspect of the business has been key to its securing the business of more than 30,000 customers in the two years since it began.
“Fintechs have emerged primarily because of the inversion of the consumer model, which is delivering and enhancing customer experience,” she told Information Age.
“We won’t book a trip without looking at Trivago,” she says, “and we won’t book an Uber driver with less than 4 stars. So how has this [structure] been in place without brokers?”
Mobile devices’ ubiquity had made them a key driver of industry disruption because they allow consumers to casually and regularly participate in “a mutually beneficial ecosystem which we all benefit from.”
“When we didn’t have mobile devices this never happened,” she added. But financial-service providers were now beholden to “our continually curated existence on social media, and their demands and expectations from service delivery.”
Life in the fintech community
The company has settled $1.1 billion worth of home loans in its three years.
But building up the business to that point had been an experience in itself, with the “very collegiate” team of ten people working “around the clock” to build the company to the stage where its attempts at disruption began to gain ground.
“Sprinting up a hill every day is not unlike how it feels,” Hayden said, “and it’s always work in rattling the cage to present the argument for a different way of skinning the cat.”
Yet strong support from the Federal Government – which has been working to parlay Australia’s active fintech community into a leading transformative force, with considerable success – has empowered entrepreneurs wanting to join what Hayden called a “good and strong ecosystem”.
“As a practitioner, I think there are definitely resources and conversations, and enough oxygen at this point in time, to continually foster the industry,” she said, although she would like to see better collaboration with universities and other learning institutions.
The push to disrupt the financial-services sector was also been fuelled by the outcomes of the Royal Commission into Misconduct in the Banking, Superannuation, and Financial Services Industry – which reinforced concerns that customers were often at the mercy of a system that was working to exploit them.
“Today, customers expect far more than specialist knowledge,” she said. “They want to be updated on their applications, and dealt with in an attentive, warm, and customer-friendly manner.”
“The service model is emerging as being equally as important as your lending products and policy knowledge.”
Siobhan Hayden is speaking at the ACS Fintech Leaders’ breakfast on Thursday 15 November from 7.30am at the ACS Innovation and Technology Hub. If you would like to attend, please email email@example.com.