Speaking at the latest Royal Commission hearing, Elliott admitted branches were not a “terribly efficient” or “well used” avenue for mortgage origination for the bank. Being questioned by QC Rowena Orr yesterday, Elliott said less than a third of its mortgage book originated from the branch network, while 55% came from mortgage brokers.
The comments underline the bank’s reliance on the adviser channel despite growing scrutiny on adviser pay and commission throughout the Royal Commission. Only last week, Matt Comyn, the CEO of ASB-owner Commonwealth Bank of Australia, said he supported a fee-for-service model for brokers, and suggested advisers did not provide ongoing work worthy of trail commission.
Yet Elliott's comments indicate banks in Australia cannot rely on branch visits to sustain their loan books. The CEO admitted branch visits were falling as people turn to online channels for day-to-day banking. He said the bank had explored improving the efficiency of mortgage origination through technology. He later defended the closure of branches across Australia: The last report that I saw from our network was that retail traffic, the number of people coming in and the number of things they do when they are there, is falling. I can’t remember the exact numbers but from recollection it’s close to, perhaps, 10% per annum.”