Digital arms race ramps up as Westpac announces 10 minute home loans

The digital banking arms race has ramped up today with Westpac announcing plans to approve home loans in as little as 10 minutes.

Launching in the last quarter of this year, the simplified digital process will be available for select customers applying for Westpac’s basic Flexi First Option mortgage. The bank expects to roll out the platform to more customers next year.

Westpac is responding to increased competition in the digital sector. Lenders such as Tic Toc, Nano, OneTwo Home Loans and ubank have shaken up the market by offering simple application processes and fast approval times.

Big bank rivals, CBA and NAB, have already responded to this competition. In January 2021, NAB rolled out a streamlined application process and now says 35 per cent of eligible branch customers are unconditionally approved in less than an hour, with 50 per cent approved within 24 hours.

CBA has also risen to the challenge, launching its new digital platform ‘Unloan’ in May of this year, which heralds a 10-minute application process.

How the big banks are responding

RateCity.com.au research director, Sally Tindall, said: “The banks are engaged in a digital arms race to compete for new business, but the biggest winners from this battle will be borrowers.”

“For decades, the big banks have held on to cumbersome legacy systems and lengthy application processes at the frustration of customers,” she said.

“That’s all changing thanks to the entrance of a handful of tech-savvy lenders, which have challenged the status quo.

“Tic:Toc has been leading the way in the tech-driven mortgage market for years, alongside Macquarie, which is known for its speedy approval process. More recent entrants such as Nano and OneTwo Home Loans, which is backed by ANZ, have also helped push the digitalisation agenda.

“The big banks’ processing times came under fire at the start of COVID when the logistical challenges of lockdowns and a surge in new lending and refinancing blew out their already sluggish approval times.

“The big four have realised they need to fight fire with fire. They’re investing in new digital platforms and spring cleaning their backend systems to deliver faster, less stressful experiences for customers.

“Westpac might be a bit late to the party, but the bank has shown it plans to be a serious contender in the digital home loan space.

“A 10-minute home loan process is a sought-after service for customers looking for certainty in a property market that’s changing by the day.

“This new offering will also appeal to complacent borrowers who’ve put the tedious job of refinancing in the ‘too-hard basket’ and kept it there for years.

“It’s worth noting many fast-tracked home loans are only for select borrowers. If your borrowing needs are ever so slightly out of the box, you might find you’re not eligible for one of these lightning-fast mortgages,” she said.

Other lenders offering fast application/approval processes (for eligible customers)

• Bendigo Express(powered by Tic:Toc)
• Nano
• Macquarie Bank
• OneTwo Home Loans
• Tic:Toc
• ubank
• Unloan
• Up (powered by Tic:Toc)

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