Large ADI turnarounds at fastest pace yet

Turnaround times have reached new record speeds at the biggest banks, while small ADI and non-bank turnarounds have also reduced, according to new research.

Brokers have suggested that turnaround times are improving at record paces across the lending industry.

Analysis of the latest Broker Pulse survey by Agile Market Intelligence – conducted between 1 and 15 February 2024 – has revealed that turnaround times shrunk in January 2024 to a record low of 3.8 days across large authorised deposit-taking institutions [ADIs] (those used by more than 20 per cent of the Broker Pulse survey respondents).

The turnaround time marked an improvement on the 4.4 days reported by brokers in December 2023, according to the survey of 267 brokers.

The number of business days taken to reach an initial credit decision decreased across five out of 12 lenders in the large ADI segment, including AMP Bank, the Commonwealth Bank of Australia (CBA), National Australia Bank (NAB), Westpac, and ANZ.

Macquarie Bank had the fastest turnaround time in this lender segment at two days, followed by ING and Bankwest at three days.

All four major banks (ANZ, CBA, NAB, and Westpac) took four business days to reach an initial credit decision in January.

St.George Banking Group and ME Bank had the slowest turnaround times, however, at five days each, the survey revealed.

Brighter results across the board

There was a pattern of improved turnaround times in other lender segments in January, too, contracting by three days month-on-month to 6.2 days across small ADIs (used by less than 20 per cent of broker respondents) and by over a day to 4.3 days across non-banks.

The reduction in the small ADI segment was spurred by a significant improvement at HSBC, where turnaround times had remained stubbornly high at around five weeks for several weeks (and increasing to as high as an average of 30 days in August 2023).

However, turnaround times tumbled to six days in January 2024, its lowest since November 2022 when it was also at six days.

Turnaround times also declined at six other small ADIs between December 2023 and January this year, including Bank of Sydney where it dropped from 13 days to five days, the survey found.

On the other hand, time to initial credit decision increased month-on-month at Newcastle Permanent from 12 days to 17 days.

In the non-bank segment, seven out of 10 lenders managed to speed-up their time to an initial credit decision.

Notably, RedZed’s turnaround times shortened from 13 days in December 2023 to four days in January 2024, while AFG Home Loans’ turnaround times decreased from eight to two days.

La Trobe Financial had the slowest turnaround times in the non-bank segment but it also reduced from 10 to seven days.

Three-month satisfaction ratings

The non-bank’s average three-month broker experience rating fell between November 2023 and January 2024 to 69 per cent (the lowest rating in the segment). This was driven by a slump in satisfaction ratings across its business development managers (BDM), as well as its application, assessment, and settlement processes.

Brokers were most satisfied with Advantedge across the non-bank at 94 per cent. Satisfaction ratings increased with its BDMs, while 100 per cent of brokers who used it were satisfied with its settlement process.

Brokers were most satisfied with Macquarie Bank in the large ADI segment, with the three-month average (covering November and December 2023, and January 2024) standing at 94 per cent.

Across the major banks, CBA earned the highest average three-month satisfaction rating (85 per cent), followed by NAB (80 per cent), while 72 per cent of brokers said they were satisfied with ANZ and Westpac.

Nevertheless, broker usage of CBA fell in January to 32 per cent, the third lowest on record, as reported in our sister brand The Adviser.

However, St.George Banking Group provided the least positive experience, with only 69 per cent of brokers responding that they were satisfied with the lender.

Client circumstances drive broker choice

Lender usage remained stable month-on-month, with 85 per cent of brokers using a non-major bank, 73 per cent using a major bank, and 46 per cent using a non-bank.

While client circumstances topped the primary reason for brokers using both the major banks and non-banks (72 per cent), 73 per cent of brokers were attracted to non-major banks for their product pricing, while 61 per cent used them due to client circumstances.

Despite earning the highest three-month satisfaction rating, Macquarie Bank was the second most used lender by brokers (34 per cent).

ANZ was the most commonly used lender in January (40 per cent) while CBA ranked third (32 per cent), NAB placed fourth (31 per cent), and Westpac was in fifth position (29 per cent).

To participate in next month’s Broker Pulse survey or for more information, click here.

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