Service agreements could help banks’ processing timeframes

As turnaround times at the major banks show little sign of improvement, FAMNZ wants clear service level agreements introduced.

“That’s standard in most business partnership – and this should be no different,” Leigh Hodgetts, FAMNZ country head says. 

“Right now, consumer choice is being compromised.”

FAMNZ members are consistently reporting delays of 7–10 days on average, and even longer for complex applications. These delays are adding pressure and uncertainty at critical moments in the home loan process, she says

“Right now, consumer choice is being compromised.”

“Turnaround times remain a serious and ongoing challenge – for advisers and especially for their clients. There is no “one size fits all” as each application is different and each lender has different procedures.”

The turnaround delays are largely a capacity and capability issue, Hodgetts says. 

“Banks have been onboarding new staff, but there’s a natural learning curve that comes with training and upskilling. Inexperienced teams are contributing to slower response times, asking more questions or requiring rework that resets the waiting time for an outcome,” she says.

“We’re also still seeing the effects of overly prescriptive deal assessments—a hangover from the CCCFA changes.”

Hodgetts says heads of third party banking have acknowledged the issue and are investing in automation, staffing, and process improvements. “These changes are welcome—but there’s still work to do to achieve parity and ensure consistency across all channels.”

Talks have started on service level agreements.

There are several solutions, FAMNZ says. Banks can support advisers – and  ultimately clients – by continuing to invest in training, resourcing, and consistent service models across all channels. 

 It wants fewer forms and a more standardised approach across lenders to improve efficiency. The current inconsistencies between banks add complexity and unnecessary duplication, which only slows the process down further, Hodgetts says.

“Listening to feedback and responding quickly in time-sensitive, high-stress situations is vital.”

 She says what advisers are asking for isn’t unreasonable: clear expectations, reliable processing timeframes, and a genuine partnership approach. “We want to work together to deliver the best outcomes for New Zealand borrowers. That’s a shared goal—and one we believe the industry can achieve.”

Another way around the delays for mortgage advisers is using non-bank or specialist lenders that are not always accessible to the public direct.

Non-bank or specialist lenders are getting more business as a result of their service and ability to meet clients’ needs in a timely manner,” according to FAMNZ.