Are consumers taking the home loan sector in a new direction?

Of all the finance related categories, the Home Loans sector is the most searched in the country with 11,000,000 online searches annually. Here's a few facts from the Jan – Mar 2017 quarter to bring you up to speed.

Fast facts - Online Search (Jan to Mar 2017)

A staggering 28% of finance related Search came from consumers investigating the category and twice as many people searched for home loans during this period as those who searched for personal loans.

• There were nearly 3,000,000 online searches.
• Overall Search grew by 14% year on year (YoY).
• Mobile devices made up 45% of all Search. A 5% increase YoY.
• First Home Buyer Search was up 58% YoY.
• Refinancing related Search was up 33% YoY.
• ‘Lo Doc’ was up 24% YoY.
• Investor related Search was stagnant.
• The word ‘Online’ featured highly with a staggering 89% YoY increase.

And what’s the deal with those consumers?

Seeing a gap in any market, well that's Gold Jerry. Now all we have to do is figure out why it's happening and how to capitalise on it.

With both ‘Apply’ and ‘Online’ seeing significant year on year representation in Search queries at 39% and 89% respectively we need to ask is this a fad or will this become a trend over the coming years? And if left to their own devices do consumers display more buyer intent?

What’s the motivation of the consumer? Are they searching for an online service because they know in 2017 it should be available to them or is the younger audience, armed with Smartphones in hand, simply comfortable with asking for the service because they already have no secrets?

Is this shift visible in the younger First Home Buyers subset or is it being witnessed in the refinancing space as well?

The facts are as Smartphones continue to dominate online Search, people are becoming harder to pin down, specifically where multiple devices are more frequently being used (up 15% on last year).

Managing the consumer journey from awareness through to acquisition will become increasingly problematic. With the right tools in place your ability to effectively manage that process will set you apart from your competitors.

The collective question for the industry might be are the devices which dominate our lives and the needs we receive from them shifting us away from the traditional mortgage broking model?

You might ask, how can an online service be better than face to face engagement? That answer, at its core is simple; find ways consumers can receive a regular dopamine fix.

A daily burst of dopamine will be more rewarding and sustainable than the brokers hand shake and the annual christmas card...it'll certainly decrease churn.

Where did all the competition go in January?

How did the Oct-Dec 2016 quarter differ to the Jan-Mar 2017 quarter?

It appears some competitors took their foot off the pedal in the Jan-Mar 2017 quarter allowing those who continued to advertise to experience greater coverage and higher consumer intent at a lower cost.

The average online spend per advertiser in the Jan-Mar 2017 quarter was $256,000 ($85,333 per month), up 37% on the previous quarter of $187,000 ($62,333 per month).

The increase in advertising spend suggests several seasoned players anticipated this in advance and by increasing their budgets they collectively hauled in a 79% increase in consumer enquiry for the month.

At a state level, in January 2017 if you were a broker in South Australia you would have experienced a 17% increase in consumer enquiry over the same time last year. Queensland was just behind at 16% and Victoria came in third at 15%.

In light of this, as a broker it might be best to get your holidays over early.

Conclusion

The days of online advertising being the great leveller have almost disappeared. The traditional model of pressing the flesh will work for most people most of the time but the shift to the online application opens new opportunities for savvy first adopters willing to get ahead of the bell curve.

You don’t need to pay an algorithm commission.

It will be interesting to see how companies like HashChing, Tic Toc, Uno and Online Home Loans cater to this new market and how far ahead they can run before the establishment catches up.

It's not like it hasn't been done before either, the new peer to peer lenders have been around for only 18-24 months and what they know about loan origination and good credit risk translates to the mortgage sector. In addition if you get it right you don't need to pay the backend of your website a commission.

Can you smell ‘inevitability’ in the air?

Who's Showtime Digital

We're excited about why consumers do what they do online. We create user journeys so simple and compelling; a consumer doesn’t need to think during the process.

That’s why we convert more consumers online.