Succeeding in the 'age of the customer'

Mortgage brokers are all the more driven to demonstrate the value of their service to customers following the Royal Commission’s final report. And customers are expecting it.

“To succeed in the ‘age of the customer’, mortgage brokers will be looking to redesign business models that put customer needs at the heart of every decision to rebuild trust and loyalty,” Damian Kernahan, CEO and co-founder of service design consultancy Proto Partners, told MPA.        

“Customers no longer compare one mortgage broker to another; they compare their last service experience with the next, blurring the lines between categories.”

For Kernahan, there has never been more a critical time for brokers than the present to truly understand their customers’ needs, and to future-proof their industry by differentiating themselves.

Redesigning journeys
The commission’s recommendations will create the biggest impact on mortgage broking compared to other affected industries, and brokers should see this as an opportunity to create great improvements on customer experience.  

According to Kernahan, the CBA reportedly conducted “a five-year longitudinal study for ASIC which revealed broker incentives were demonstrably leading to poor customer outcomes.”

The study showed that apart from not being built to be customer centric, mortgage brokers provide products and services that require customer-informed transformation to remain competitive.   

“This means leaders need to face some difficult home truths to create impetus for change. Customers will expect to see changes that encourage greater integrity, honesty, and transparency to restore trust,” Kernahan said.

He added that the customer feedback broking leaders will receive in the coming months will be critical in redesigning the borrowing journey that rebuilds reputation, prevents high customer churn, and keeps the industry at a competitive advantage. Customers expect efficiency and transparency especially when it comes to services involving their money.

“The primary hurdle mortgage brokers need to conquer is to redesign their operating model using customer experience as a differentiator to restore customer trust,” Kernahan said.

“Through a deep understanding of customer needs, which can be uncovered using rigorous qualitative research methods, brokers will be able to empathise with customers and gleam insights on their ideal borrowing journey.”

Adopting a new approach
Kernahan said the conflict of interest between banks and mortgage brokers has affected a perceived level of trust in the broking industry that will likely result in high customer churn unless a new customer-led approach is adopted.  

According to him, the key to this is industry leaders recognising the important role customer experience and service design play in differentiating mortgage brokers. 

“Understanding and actioning customer needs and pain-points at every step of the borrowing journey will help brokers create prioritised valuable opportunities through their products and services,” Kernahan said.

“Customers quite simply seek providers who keep the promises made when they signed up for the service; that alone builds trust, improves ongoing relationships, creates customer advocacy, referrals, and repeat business.”

About Proto
Launching in Sydney in 2008 Proto Partners pioneered the introduction of service design to Australian business, helping organisations understand and communicate what is most valuable to their customers. Their mission is to enrich the lives of every Australian, one customer experience at a time. As Australia's longest practitioners of Service Design, Proto Partners have led the thinking and delivery of extraordinary service improvements for Australian and New Zealand organisations and their customers, including Optus, Westpac, AMP, Gumtree, News Limited.