On whether branch closures are likely to drive more consumers into the arms of intermediaries, John Charcol’s Ray Boulger said: “For most customers looking for a face to face experience, people tend to go to their own bank. If they can’t get to their own bank, they are more likely to seek out a broker.”
The majority of the product transfer market is non-advised at the moment, with 75% of customers going to direct to their lender, added Boulger, who said that this is in conflict with the FCA’s insistence on advised sales.
Without any officially recorded figures, the market is thought to be worth about £100bn a year, with remortgages at about £65bn, but this is likely to spike from next year.
Today’s announcement follows RBS’ closure of 180 branches in March earlier this year, as the rise of digital continues to change the shape of banking and advice relationships, and the move to encourage consumers toward online and mobile services.
Union Unite accused the taxpayer-backed bank of betraying communities and said questions need to be asked about whether this signals ‘the end of high street network banking.’
The rise of the robots
Every high street mortgage lender is working on improving its digital offering both to consumers and the intermediary channel. However, smaller lenders Shawbrook and Together have already launched single product Application Programming Interfaces (APIs) and TSB launched its API-enabled broker platform yesterday.
Andrew Montlake, director at London-based broker Coreco said: “Branch closures could be both good and bad for brokers. It’s inevitable that there will be more closures over the coming years as consumer behaviour moves online. Also, with 75% of remortgaging already through brokers, consumers have already voted with their feet.”
He added that with direct to lender product transfers, where providers are offering better rates where customers can sidestep legal and other fees, brokers were never in this business anyway and would never expect to have 100% of the market.
“It’s the lack of advice at this point that’s the danger, with consumers simply pressing a button, unaware there are far better deals for them elsewhere,” he added.