What counts as instant gratification for home loan approvals? Try 10 minutes. This is the Commonwealth Bank’s latest salvo on the mortgage market wars.
In the time we might take to take a quick shower, buy a coffee, wait for a bus or change for the gym, the bank is now promising that some applicants will be able to apply for a home loan digitally. It’s the oddly marked “Unloan” that won’t initially be available to many or even most. It is more of a do-it-yourself loan where a certain digitally savvy but simple borrower can get a quick and “cheap” loan.
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Eventually the loan verification time will also be 10 minutes.
For banks, reducing the time it takes to approve home loans is the competitive holy grail.
In the industry, this is known as the “time for yes” and it is an important factor in a potential client’s choice of lender.
In recent years, significant changes in mortgage market share between banks have occurred due to the speed of the mortgage approval process. Westpac and ANZ lost mortgage market share because turnaround times were too slow.
Commonwealth Bank has been the most aggressive of the big four banks in recent years – particularly in developing new products designed to increase its appeal to a younger demographic.
ABC’s new high-speed digital mortgage product is another in a series of products and services that include a buy now, pay later product, a cryptocurrency purchase platform, and a credit card now. reinvented children’s savings/spending called Kit – (a kind of digital Dollarmites with certain security mechanisms and financial educational properties).
Unloan is further evidence of the bank’s recognition that fintech is as serious a financial threat as its big-bank counterparts.
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