The digital banking arms race intensified today with Westpac announcing plans to approve home loans in as little as 10 minutes.
Launched in the last quarter of this year, the streamlined digital process will be available to select customers applying for Westpac’s basic Flexi First Option mortgage. The bank plans to roll out the platform to more customers next year.
Westpac responds to increased competition in the digital sector. Lenders such as Tic Toc, Nano, OneTwo Home Loans and ubank have disrupted the market by offering simple application processes and fast approval times.
The big rival banks, CBA and NAB, have already responded to this competition. In January 2021, NAB rolled out a streamlined application process and now reports that 35% of eligible branch customers are unconditionally approved within one hour, with 50% approved within 24 hours.
The ABC has also risen to the challenge by launching its new ‘Unloan’ digital platform in May this year, which announces a 10-minute application process.
How Big Banks Are Responding
|ABC||Launched Unloan in May 2022. Qualifying requests may take 10 minutes. Currently only for refinancers. Offer instant approvals later this year.|
|Westpac||Unconditional approval in 10 minutes from the end of 2022 for certain customers applying for a Flexi First Option loan. For new borrowers or refinancers.|
|NAB||Launch of a new digital platform in January 2021. To date, 35% of eligible branch loans are approved within one hour, 50% within 24 hours.|
|ANZ||Is set to launch a digital home loan pilot on its “ANZ Plus” online app this year. Invests in OneTwo home loans.|
RateCity.com.au Research Director Sally Tindall said: “Banks are engaged in a digital arms race to compete for new business, but the biggest winners in this battle will be borrowers.
“For decades, big banks have kept cumbersome legacy systems and lengthy application processes to customer frustration,” she said.
“All of that is changing thanks to the entry of a handful of tech-savvy lenders, who have challenged the status quo.
“Tic:Toc has been at the forefront of the technology-driven mortgage market for years, alongside Macquarie, which is known for its fast approval process. More recent entrants such as Nano and OneTwo Home Loans, which is backed by ANZ, have also helped drive the digitization agenda forward.
“Major banks’ processing times came under fire early in COVID when logistical challenges from lockdowns and an increase in new loans and refinances shattered their already slow approval times.
“The Big Four realized they had to fight fire with fire. They are investing in new digital platforms and spring cleaning their backend systems to deliver faster, less stressful customer experiences.
“Westpac may be a little late to the party, but the bank has shown plans to be a strong contender in digital home lending.
“A 10-minute home loan process is a sought-after service for clients seeking certainty in a daily changing real estate market.
“This new offering will also appeal to complacent borrowers who have put the tedious work of refinancing into the ‘too difficult basket’ and kept it for years.
“It should be noted that many accelerated home loans are only available to certain borrowers. If your borrowing needs are a little off the beaten track, you may find that you don’t qualify for one of these super-fast mortgages,” she said.
Other lenders offering fast application/approval processes (for eligible customers)
- Bendigo-express(powered by Tic:Toc)
- Macquarie Bank
- OneTwo Home Loans
- TIC Toc
- At the top (powered by Tic:Toc)