Westpac confronts fresh issues in mortgage processes, despite new platform

Westpac’s attempts to streamline mortgage processes have been dealt a blow, as issues emerge from the transition to a new platform for bankers and brokers.

Westpac’s new loan platform is facing some issues. Picture: NCA NewsWire/Christian Gilles

Westpac’s attempts to streamline its mortgage processes have been dealt a blow, as issues emerge from the transition to a new platform for bankers and brokers.

Westpac has had to remove about 100 mortgage brokers from the new platform because of a jump in processing times through that channel, sources told The Australian.

The new One Bank Platform – across brands including Westpac and St George – is meant to lead to a quicker and more seamless mortgage origination and application process, but teething issues are causing headaches for brokers.

Some brokers are being told of quicker turnaround times via the legacy Westpac systems, meaning those that have transitioned to the new platform are at a disadvantage.

Brokers are also finding it difficult to get in touch with support staff for the new platform.

Westpac’s new mortgage origination platform – first piloted in late 2017 – aims to digitise and standardise systems including those in the back end of mortgage processing.

Westpac and rival ANZ have separately struggled with problems around home loan processing over the past year, although the former has started to regain some momentum.

Westpac’s managing director for mortgages Anthony Hughes said the lender had rolled out the One Bank Platform to branches and all in-house bankers, and more than half of its circa 37,000 broker partners.

The bank aims to on-board all consumer mortgages through the platform by the end of 2022.

“This will enable end-to-end digital mortgage processing for internal and third-party channels, making it simpler and faster for bankers, brokers, and customers,” Mr Hughes said.

“Westpac is now upgrading the system to further improve capability and response times as we continue the rollout.”

In November, Westpac said about 10 per cent of brokers were on the new platform and it expected the majority to be submitting loans on it by March 31.

Westpac’s median loan approval time – from application to unconditional approval – dropped to about six days in its own channels in February, from 9.6 days in September. For brokers, it sits at about seven days down from 11.7.

Investors are watching Westpac’s broader simplification program which includes selling assets and improving systems.

Westpac’s trading update this month did provide more confidence around it being able to achieve its $8bn cost target by 2024, while it was making some improvement in its mortgage unit. But Westpac’s growth in home loans still lags Commonwealth Bank and National Australia Bank.

“We think more certainty on a margin floor, early execution on cost reduction and more consistency in mortgage growth are needed to close the valuation gap,” Morgan Stanley analysts said this month.

Westpac reported a eight basis point slide in the net interest margin – what it charges for loans less funding and other costs – to 1.91 per cent for the December quarter. The exit margin at December 31 was lower and Westpac has warned of continued pressure.

At its annual results in November, Westpac chief executive Peter King said the bank had further digitised home loan processes and introduced more than 70 improvements.

His presentation at the time said Westpac had an “ongoing focus” to improve approval times.

Mr King has looked to ramp up the home loan business, but it has come amid fierce competition and a shift to fixed-rate loans, which is now abating. The bank is still offering $4000 cash back if customers refinance through St George, or $3000 if they shift their home loan to Westpac.