Proprietary channel won’t push out brokers, says NAB

NAB recently hosted its Market Megatrends 2024 report launch event. Here, worries of the proprietary channel were put to rest with the major bank claiming brokers are still taking priority.

“Before I dive in, I just wanted to put a couple of things up front about our ongoing commitment to the broker channel. You will have recently heard, or maybe you haven’t, but NAB’s refresh strategy that Andrew (Irvine) has talked to in in our interview results about our ambition to be Australia and New Zealand’s most customer-centric company,” NAB executive for broker distribution Adam Brown said.

“It’s a big ambition, and it’s deliberately the most customer-centric company, not the most customer-centric bank. Big part of that is our customer obsession and doing what’s right for our customers. And you will have also probably heard there around our renewed focus on our proprietary channel. And I wanted to, I just wanted to clarify some things there for you all today, our focus on our proprietary channel is important for us because we want to be a great bank for those customers that choose to come to us directly.

“But equally, we want to be a super bank for brokers, and that’s brought about in our moniker around bank behind the broker, and nothing changes there. We are more committed than ever to supporting our brokers, supporting our aggregator partners, and being a really, really robust bank for the broker channel. But it is important that we’re also a great bank for our direct customers.”

While this ongoing broker commitment is a welcome sight, just last month, NAB reported a drop in broker-originated loans and an increase in proprietary channel loans.

The trouble with digitisation

Further touched on in Brown’s address was the rise in automation and digitisation among lenders and brokers. While it’s inevitable that tech will see advancements in the workplace, it could come at the cost of jobs.

“The tech turning point is changing the way that the brokers have to think about their businesses, whether they want to embrace or not. Chris talked about small business owners, and we all know many brokers that have been around the industry for a long time and do their work in a certain type of way, but as they start to different types of customers, what those customers now expect and how a broker interacts with the customer is critically important,” Bown said.

However, Brown drove home that he doesn’t believe the rise in automation and digitisation will have an impact on broker jobs and will, in fact, help create more opportunities.

“One of the things that I’m often asked is, is technology going to remove the role that a broker plays? [That could not] be further from the truth. Technology supports the role that a broker plays, but I don’t see it removing the role that a broker plays,” Brown said.

“And we look at direct lenders with the automation and the digitisation that I talked about before, creating opportunities for customers that want to operate that way … Going and getting that additional support, confirmation of advice, guidance from a broker or a banker is critically important, and still that human touch supports the technology piece.”

In the Q&A session that followed, Broker Daily questioned this surety. With streamlined processes becoming less of a need for people to do the administrative tasks, in turn requiring less people to perform a function.

Brown believes that those who may get pushed out will be those who are not committed to the profession.

“If you look at the latest estimate, [21,000] accredited brokers, continues to increase, but if you look at the productivity of those brokers, it’s much, much, much less. So I think there is a bit of a natural consolidation anyway, and so I think the good brokers and the good businesses will continue to thrive. But I think those that are maybe doing it part time or doing it on the side, they’re the ones that I think will drop out,” he said.

“Our industry is becoming more professional every day. All of us want that for a number of reasons, and so I think there’s going to be natural consolidation … There’s plenty of business in the system, and the natural consolidation, I think brokers will continue to have it at pace. I’d like it to, because I think we all benefit from having a more professional industry … I think it’s a natural progression of our industry.”

The impacts of automation and digitisation on the broking industry are ongoing, as it is with many industries in the modern workforce. While it may not be time for panic, healthy scepticism may be more appropriate.

[Related: NAB broker flows drop as it focuses on proprietary channel]

Jack Campbell is the editor of Broker Daily. After graduating from the University of Wollongong in 2022, Jack began his journalistic career working on Broker Daily’s sister brand, HR Leader. In August 2023 he was made the news editor and worked alongside some talented journalists writing articles and recording podcasts.

To reach Jack, email him at: This email address is being protected from spambots. You need JavaScript enabled to view it.