US Fintech SoFi Targets Mortgage Lending in Australia

Social Finance to break into the trillion dollar Australian mortgage market? "Industry disruptor" alert! $16bn in loans already...

May be paywalled for some US fintech SoFi targets mortgage lending in Australia

 

There's going to be a few more of these types of 'disruptors' in the lending industry over the next couple of years, mostly P2P. Some will survive, most wont but will be interesting to see the landscape in 3-5 years from now

 

For those of us who go back a decade or two it is a repeat of the 90's when a lot of the UK / European lenders tried their hand in the Australian market either thru direct lending or via a distribution channel.

Might have been a matter of getting even with Australian Banks invasion into the UK but most of them put their bat under their arms and walked away circa GFC.

Lenders will come and lenders will go but all in all competition has to be a good thing.

 

A good broker has far more to offer than these so called disruptors. Users of these products probably not an ideal client anyway.

 

These sorts of business models can and do work well in the personal lending/smaller secured/unsecured lending spectrum as generally the borrower profile is fairly small in terms of data, can self-apply and easy to assess. Soon as they hit any person with multiple facilities, non standard income (read anyone who doesnt get a set base full time set salary and nothing else) the decline rate sky rockets.

One of the more aggressive credit unions in Australia has tried to go down the route of having people apply for their own mortgages in recent times, whilst closing down branches as a supposed 'cost effective' move. I know their decline rate shot up to over 80% of applications.

 

Now all we need is a disruptor from Australia to help get mortgages in the US, based on assets/incomes in Australia. Every second fellow with a hat will line up and @MTR s inbox wont stop buzzzing

 

The average Aussie struggles to read a bank statement. Let alone understand what a bank is looking for to get a loan approved.

I dont dismiss that the industry is ripe and ready for disruption, I just dont believe that an online 'self source' platform is going to be the solution.

Blacky

 

Agreed - it's just a lazy mans version of productivity improvement to palm of as much work to the consumer. That's not exactly what lending needs.

I would be saying the lending market needs greater product diversity as the number 1 disruptor - good luck finding a young IT techie interested in that.