Technology is changing the game in many industries, such as home-lending, where digital mortgage providers are beginning to compete with brick-and mortar banks.
While online lenders are not new to Australia, digital banks such as 86 400 are a different matter. The Australian Prudential Regulation Authority has recently given these neobanks licences to be fully authorised deposit-taking institution (ADIs). These banks are now able to offer transaction and savings accounts.
86 400 differentiates itself from other neobanks by branding itself as a digital-first bank — in other words, the bank will not be using any existing legacy or infrastructure systems that are already being used by existing financial institutions in Australia.
“We didn’t set out to build a small bank or do something different than what is already available. We are focused on providing the best customer experience possible. Melissa Christy, home loan lead at 86 400, said that this means products and services that are specifically designed to help customers, not catch them out.
Name behind 86 400
Its name is 86 400, which is quite interesting. Christy explained that the bank’s name represents the number seconds in a day, and also symbolizes a promise to future clients that their time would be valued.
“We are building a smartbank that tells customers what is happening with their money right now, in the past and in the future. This will allow them to feel in control of their money every moment of the day, every minute. She said that there were eighty-six and four hundred of them.
Home-loan offers from 86 400
Apart from home loans and savings accounts, the bank also plans to offer transactions and transaction accounts. Christy stated that the bank has been working on its home-loan products for the past few months.
She explained that the smartbank’s home loans will feature a digitalized process. Customers and brokers will not have to spend as much time applying as with other lenders.
The bank will simplify the application process so that it focuses on the most important pain points. This will reduce paperwork and cut down the time required to get approval.
Many borrowers feel like they’ve been through enough when applying to mortgages and don’t want it all over again. Christy explained that nearly all 86400 loan documents will now be sent electronically and signed electronically. This makes it easier for borrowers.
A mobile app will also be developed to support the bank’s mortgage customers.
The broker channel
The broker channel will allow home loans starting at 86400 to be arranged. The bank is still working out details of the launch, but it recently partnered with Vow Financial Group and Specialist Finance Group to allow it access to a network of brokers.
Christy stated, “We are also in discussion with other broker partners and we look forward working with a sustainable mortgage broker industry in future.”
Christy explained that the bank offered loans through brokers to take advantage of the market’s competition.
She stated that they offer comfort to home loan customers who still wish to meet face-to-face to find the right lender for them.
Christy stated that part of 86400’s plan was to make it easier for brokers to apply for home loans.
“Brokers waste too much time going through paperwork. She said that smart technology allows them to make that happen for them. This gives them more time to provide real value to clients and allows them to prioritize the things that really matter.