Westpac's home loan app criticised
Mortgage brokers are up in arms at a banker's suggestion that their jobs could be replaced by a smartphone app.
Westpac this week announced that customers would be able to get home loans pre-approved on their mobiles, a first in the New Zealand and Australian markets.
In an interview with financial website Good Returns, the bank's general manager of customer strategy and experience Callum Wilson said the app was a potential threat to mortgage brokers.
The Professional Advisers' Association, which represents 1200 brokers and advisers around New Zealand, fired off a sharply worded warning in response.
"I don't think threatened is the right word," said general manager Jenny Campbell.
Instead, she said brokers would be concerned about the dumbing down of literacy around financial products.
"These apps will give you an almost meaningless loan approval," Campbell said.
The most it could offer was a very conditional nod with several "gaping loopholes", she said, warning buyers not to count on them as a serious offer for finance.
Campbell agreed that phone apps and online approvals were a useful tool for browsing, but said they could never deliver the same level of service or support as a human being.
"Using a mortgage broker you will get a home loan that is tailored to your circumstances, not to the bank," she said.
Brokers also had useful contacts with local valuers, solicitors, building inspectors and others who could help support buyers through an often stressful process.
"It's the biggest purchase you'll ever make. Is it something you'll be buying off an app?" Campbell said.
Wilson's original comments included the caveat that online services were not for everyone.
"Lots of people still want to have those complex conversations in person," he said.
Late last year Westpac became the first major bank besides Kiwibank to offer online mortgage approvals, a channel that has proved popular.
Customers still eventually have to visit a branch to sign documents and confirm income details, but conditional approval makes the home-hunting process easier.