Stephen Moore: 20 years of adaption

As Choice reaches two decades in business its CEO looks at the huge changes the industry has experienced

Stephen Moore: 20 years of adaption
As Choice reaches two decades in business its CEO looks at the huge changes the industry has experienced

Broking has come a long way since the 1990s, when it first started to take the shape of an industry and when Choice was first established in 1997.

While brokers had been operating for decades in select pockets around the country, the deregulation of the financial system in the 1980s saw non-bank lenders start to enter the market with interest rates well below those being offered by banks.

As banks reduced their interest rates to compete, entrepreneurial operators emerged to represent the interests of consumers – and mortgage brokers as we now know them established themselves.

The boom of the ‘90s marked a turning point for the industry, with broad lender support for the broker channel. Growth in the industry was driven by huge demand from consumers looking to take advantage of the favourable economic conditions by borrowing or refinancing, as well as the vast array of new products on the market.

Two decades on, brokers have firmly established a leadership position, with the broker share of the home loan market tipping over 50%. 

This period of significant growth has not been without challenges, however, what is particularly evident is the resilience of brokers. We continue to see brokers weather changing economic cycles and adapt to changing regulatory requirements all the while providing great customer experiences and value. Brokers should be proud of our industry as I certainly am.

Economic and regulatory change

As broking experienced a meteoric rise in the early 2000s, the important role of aggregators as business partners has also evolved – as did the importance of technology, which continues to play as essential role in running an efficient business. The 2000s also brought with the Global Financial Crisis (GFC) - a real test of faith for many businesses including broking. 

Despite lender closures, job losses, restricted credit access and falling house prices, the period proved to be a testament to the resilience and dedication of the broking industry, which adapted to the new environment and went on to flourish better than ever. Following the GFC, brokers have diversified their product offerings, strengthened their client value propositions and continued to grow their share of the market.

The industry has also weathered periods of regulatory change, including the National Consumer Credit Protection Act (NCCP), which imposed additional rules on mortgage lending and required brokers to follow more stringent processes and documentation. 

While the changes required a transition period for brokers, in the years following the NCCP the integrity of the credit market in Australia has been significantly enhanced. What has emerged is an industry with high ethical and professional standards, and with lending standards that provide sound consumer outcomes. 

Rising to meet the challenges

With the current heightened focus on the industry, there is an opportunity for brokers to showcase the quality service they provide. We know that the great service and support broker provide is the reason more Australians continue to vote with their feet and seek services from brokers.  We are leading the market and now is the time for all of us to embrace our leadership position and set the highest standards. 

At Choice, there are some fundamentals we continue to focus on – quality in business systems and processes, quality advice and most importantly quality customer experience. We are excited to work with our broker partners to explore opportunities to streamline and improve business processes, seek opportunities to build out their business offering and look for ways to deliver a seamless customer experience.

While changes to the industry continue to create challenges and opportunities, at Choice we are committed to supporting brokers to adapt and improve to meet the increasing expectations of customers.

Stephen Moore has been the CEO of Choice Aggregation and Choice Home Loans since 2010. Choice Aggregation reached its 20th birthday this year, in addition to surpassing $60bn in the value of its trail book and 1500 brokers.