Why the banks can’t compete with brokers

Posted by Jul02, 2012 Comments Comments Off on Why the banks can’t compete with brokers
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I read with great interest an article written recently by Stuart Grimshaw, the CEO of Bank of Queensland (BoQ). I was particularly interested for two reasons. Firstly, I’m a student of the Net Promoter Score methodology and have recently implemented it in my business (more on this later). Secondly, the reasons he cited for why he believed BoQ could win customers away from the Big Four Banks are sound in my opinion and even more applicable to mortgage brokers. Click here to read the article.

Mr Grimshaw suggests that the trend in banking is moving towards “a heavier emphasis on personalisation in financial service” and that people were seeking a “trusted relationship with their banker”. He went on to suggest that BoQ is well placed to achieve this through its owner-managed branch model because it means that branch managers hang around for longer and can build personal relationships with customers. He believes that regional banks like BoQ are nimble and small enough to compete at this level. I agree with him.

If BoQ believes that size and ownership structure have positive impacts on the ability to deliver sort-after, tailored, personalised and trustworthy banking services then mortgage brokers are a step ahead of the regional banks and probably two steps ahead of the big banks.

The Net Promoter Score methodology proves that loyal clients (call Promoters) are more profitable, do more business, buy more products, generate 80% of the referrals you receive, cost less to service and so on. It is proven that the key to generating more Promoters is simply to deliver a better service experience. Brokers have the most control over service delivery compared to their competitors. Let’s make the most of it!

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