ANZ Bank says fully automated digital home loans will be able to service up to 30 per cent of the Australian mortgage market by 2024, as it prepares to start offering digital mortgages next year.
ANZ, which has been trying to recover from a period of poor performance in home lending, on Thursday said it was on track to launch digital mortgages – which could be approved in as few as 10 minutes without human involvement – in the second half of 2023.
ANZ says it will launch a fully digital mortgage in the second half of next year.Credit:Fairfax Media
The move will be a key step for ANZ’s new digital banking platform, ANZ Plus, which the lender is hoping can fend off competition from technology-based rivals.
Managing director of design and delivery at the bank’s digital arm ANZx, Peter Dalton, said on Wednesday that ANZ research had shown more than a quarter of customers started their home loan applications online. However, almost none of these customers completed their loans digitally because banks used manual processes to assess borrowers.
Dalton said banks in Australia and overseas were increasingly heading towards digital mortgages, and ANZ’s product would initially focus on simpler owner-occupied loans where a customer was refinancing. It plans to roll out digital loans for a wider range of customers such as property investors and loans arranged via mortgage brokers.
The bank expects that by 2024 digital mortgages will be capable of servicing up to 30 per cent of the market.
“We think that we will get to quite a viable percentage of the market – 20 or 30 per cent of the market within the first 12 months. But there will always be some things that we’re adding to it,” he said.
Mortgages are a lucrative product for Australia’s banks, and the Commonwealth Bank also unveiled plans to offer a digital home loan earlier this year as it seeks to entrench its dominant position.
National Australia Bank and Westpac have also invested in speeding up their mortgage approvals by using technology, with Westpac flagging its own 10-minute mortgage earlier this year. Dalton said most other banks still used humans in their credit assessments, and he stressed that ANZ Plus would also provide staff to help customers where clients wanted that. “We are going as fast as we can, and we think this is where the industry is going,” he said.
ANZ has been seeking to turn around a period of market share losses in mortgages, and latest data showed the bank had a strong month in October.
Figures from the Australian Prudential Regulation Authority last week showed ANZ’s annualised housing credit growth in the three months to October was the fastest of the big four banks at 1.4 times the industry average, according to Goldman Sachs analysts.
ANZ plans to eventually move its retail banking customers on to the ANZ Plus platform, which launched earlier this year with a limited range of features.
The bank said this week that ANZ Plus had attracted more than $2 billion in deposits and 100,000 customers. Dalton said about 30 per cent of ANZ Plus customers had joined the platform from another bank.
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