A deterioration in the major bank’s assessments processes has coincided with a decline in their share of mortgage applications via the third-party channel, new data has revealed.
According to Momentum Intelligence’s latest Broker Pulse research, both NAB and Westpac lost ground in the third-party space over the month of May, with the share of brokers submitting mortgage applications to the lenders (broker usage) slipping to 25 per cent (down from 29 per cent) and 16 per cent (down from 21 per cent), respectively.
Over the past few months, the share of brokers sending business to Westpac has almost halved, from a peak of 30 per cent in March.
The decline in broker usage has coincided with deteriorations in both NAB and Westpac’s turnaround times for mortgage applications.
Despite a decline over the month of May, Westpac’s turnaround times remained elevated at an average of 16 business days, while NAB’s rose from an average of just over 12 business days in April to 14 business days in May.
Accordingly, the net promoter scores (NPS) of both majors remain high relative to their competitors.
NAB’s NPS slipped deeper into negative territory, falling from -30.9 in April to -48.1 in May.
Westpac’s NPS improved but from a low base, ticking up from -53.3 to -35.2 – in line with the slight reduction in its turnaround times.
ANZ bucks trend
Conversely, the share of mortgage applications submitted to ANZ and the Commonwealth Bank of Australia (CBA) increased over the same period.
When excluding subsidiaries, ANZ boasts the largest share of broker usage at 65 per cent, up from 56 per cent in April.
But in contrast to NAB and Westpac, ANZ’s share improved in spite of a sharp spike in its turnaround times, from an average of 10 business days in April to an average of 22 business days in May.
The major bank has publicly acknowledged the deterioration in turnaround times, attributing the increase to “record daily volumes”.
In response, ANZ has overhauled its process, onboarding and reallocating 150 staff to its assessment team and prioritising “time-sensitive” applications.
Shortcomings in ANZ’s mortgage approval process have been reflected in the bank’s NPS, which fell sharply from -2.4 to -37.6.
Meanwhile, CBA’s share of broker business increased from 39 per cent in April to 49 per cent.
CBA continues to post the lowest turnaround times of the big four banks at six business days – half the length of its nearest big four peer (NAB).
The Commonwealth Bank’s NPS increased sharply over the same period, from 8.7 to 27.7.