Commonwealth Bank is planning a new offensive in the critical mortgage market to counter the growing threat from financial technology, offering fully digital home loans that can be approved in just 10 minutes.
As the CBA seeks to use its technological clout to strengthen its dominant position, retail banking group leader Angus Sullivan said on Friday that mortgages will be the next front in the battle against fintechs.
Mr Sullivan also said the housing market will continue to grow despite restrictions in Sydney and Melbourne, predicting that low fixed rates will boost confidence in the upcoming spring auction season.
The CBA, which already has more than one in four home loans, said this week that it will launch a digital-only home loan that will process customer data to ensure quick approval.
Sullivan revealed further details on Friday, saying the product will initially target simpler loans of less than $ 3 million with a lower loan-to-value ratio. For this group of clients, he said the central bank would seek to decide whether or not to approve loans in just 10 minutes.
“We will be looking to get mortgages between 10 and 20 minutes, and this will be a tremendous opportunity for more Australians to take advantage of high rate fixing through easier refinancing,” Mr Sullivan told reporters.
It will be more difficult to automate higher value mortgages or more complex loans, such as using trusts, he said.
Evans and Partners analyst Matthew Wilson said several smaller players, including Nano, Athena Home Loans, and Bendigo and Adelaide Bank, Tick: Toc offered digital housing loans for a while, but now the Central Bank was trying to match them.