On Thursday 23rd June, I attended an ‘Open Mic’ session at a local FinTech innovation space. Established to help up and coming innovators harness their ideas and secure access to investor funding, the innovations coming out of these spaces are important to watch.

Given Australian’s love of residential property, it is no surprise that the home loan market has been targeted by a segment of FinTech Startups more specifically known as ‘PropTech’.

Whilst PropTech innovations can be a competitive threat to the mutual industry, they can also present partnership opportunities for our clients.

Below is a summary, in no particular order, of the most interesting ‘PropTech’ innovations presented on the evening.

HashChing

“HashChing is Australia’s first online marketplace allowing consumers to access great home loan deals without having to shop around. Completely FREE to consumers, HashChing connects you directly to verified mortgage brokers who can further negotiate a better rate from the lenders and save you time, hassle and money.”

Consumers can either search for a registered broker (using the site’s social proof to help their decision); or compare Home Loan deals relevant to them using a product selector tool.

Fig 1: Search for a broker

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Fig 2: Product selector tool 

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Fig 3: Compare home loan deals

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HashChing have recently secured over $1m in investor funding via H2 Ventures.

Learn more at: http://www.hashching.com.au/

Loan Dolphin

“IS YOUR BANK TAKING YOU FOR GRANTED? ARE YOU TIRED OF SHOPPING FOR A BETTER DEAL?
LoanDolphin lets Banks and Brokers fight for your loan with their best offers while your details remain anonymous – for Free!”

LoanDolphin is looking to turn the traditional Home Loan comparison website on its head. With LoanDolphin consumers create a profile and participating banks and brokers bid for the business. The consumer can view the details of each lender and select their lender of choice. LoanDolphin also offer CashBack with every deal.

LoanDolphin launched to the on the 1st February 2016. At the end of May, they had written $53m in loans. They have calculated that on a $600,000 home loan if a consumer was to approach the banks, the average rate would be 4.45%. Using LoanDolphin consumers can expect an average of 3.52%. LoanDolphin makes between 0.22 and 0.44 basis points on settlement or $2.2k on average.

Learn more at: https://www.loandolphin.com.au/

HeroBroker

“BROKER YOUR OWN LOAN. We believe in changing the way we do banking. We believe that everyone should have the capability to make the best decisions, on events that impact their lives and be rewarded for it. We Believe in You, Our Hero, the one who wants to take control and change the banking world.”

HeroBroker purport to provide consumers with all of the tools they need to broker their own loan. They provide a list of lenders and rates which they state are not advertised to the general public. Once a consumer brokers a loan, they are provided with any commission that a broker would make.

HeroBroker have recognised the importance of marketing and have partnered with a Social Media media marketing firm to maximise their social media reach. They are also looking to partner with employers to provide its service as an employee benefit.

Learn more at: http://www.herobroker.org/

LoanFlare

“TAKE CONTROL OF YOUR HOME LOAN. We’re an online mortgage platform that empowers you to apply for and manage your loan with greater efficiency and transparency, and get rewarded for doing so.”

LoanFlare, like HeroBroker is designed to empower the consumers to broker their own home loan and get incentivised for doing so. LoanFlare have recognised that Brokers have a conflict of interest. They are incentivised by commissions they receive from the home loan providers. Therefore they might not provide the best loan to the consumer but simply the one that makes them the most commission. This results in a poor customer experience.

LoanFlare makes approximately 0.60 basis points at settlement plus a trail of 0.20 basis points.

Learn more at: http://loanflare.launchrock.com/

Key findings

It appears that that key losers in regards to these innovations are predominately the home loan comparison sites and brokers.

The innovations are predominately targeting those people who want to self-serve and therefore they offer an additional online distribution platform for the mutual industry. Mutual banks and credit unions are likely to compare favourably on these sites due to their competitive rates when compared to the major banks.

Are you interested in partnering with any of the companies listed above? If so, please let us know. We can approach them on your behalf.