Nonbanks poised to poach banks’ prime customers
Speaking to the rise of nonbank lending, the founding director of a commercial brokerage believes “banks need to be careful they don’t lose their relevance in the market.”
Recent research has indicated that alternative lenders may pass traditional banks as the key funders in Australia by as soon as the second half of 2020.
“As nonbank lenders build up their experience, they’re becoming more competitive because they’re starting to get a return on investment. And as they become more proficient, they’ll scale up and they could become more prime competitive while maintaining all the really positive characteristics that the banks don’t have,” explained Ian Robinson of Robinson Sewell Partners.
“I think they could end up stealing a lot of banks’ primary business.”
The speed at which nonbanks operate is a key selling point, especially as compared to the “almost dysfunctional” speed to market capability of banks.
“Even on the larger end of a commercial transaction, where it’s custom designed and the due diligence is still very similar to what the banks do, they just do it so much faster,” said Robinson.
Having yet to fully mature, nonbanks are able to flex, expand and meet the needs of the borrowers as they become apparent.
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