NAB targets broker channel lending
(14 July 2017 – Australia) National Australia Bank (NAB) has revealed a new campaign targeting brokers, to help them with increasing their small business loan book.
The campaign encourages brokers to ask their customers ‘How’s Business?’ in the hopes that it could lead to a range of new business opportunities, and deepen the broker-customer relationship.
This comes at a time where recent research from East & Partners reveals that small businesses are increasingly moving away from primary lending relationships to transaction banking. Less than half of all small businesses cite lending as their primary relationship requirement with banks, down from two thirds in 2013. Meanwhile, median account life for transaction banking (4-5 years) exceeding that of lending (2-3 years) and expanding at a faster rate.
General manager of broker distribution at NAB, Steve Kane said: “This campaign is designed to start conversations between brokers and their customers, and to help brokers diversify into small business lending.
“By responding to more client needs, brokers save their customers time and deepen their customer relationships. Many brokers are small business owners themselves, so there is a natural affinity as well.”
“There is immense opportunity in the small business market, and we hope by asking ‘How’s Business?’ brokers open up the door to new revenue streams,” Kane added.
The campaign follows NAB’s continued bid to target the small business lending, which applies to loans of up to A$1 million, and includes access to equipment finance such as finance lease, hire purchases and equipment loans.
According to the lender, brokers are able to write one combined application for residential and small business deals, and are provider access to a specialist BDM and banker team with expertise in small business and residential lending.
“We’re not just suggesting brokers start a conversation with customers – we are enhancing our services to make the transition into small business lending as smooth as possible for brokers and make NAB easier to do business with for those already writing small business loans,” Kane said.
NAB’s leading market share in the small business segment is being challenged by Big Four rival Commonwealth Bank (CBA). East's SME Transaction Banking Program, which interviews around 1,500 businesses every six months, shows consistent multiyear declines averaging 60-70 basis points, compared to CBA’s 50 basis points increase. Should these trends continue, East predicts that that CBA will surpass NAB leading market share position within four years.