Algorithms and machine learning

As buzzwords become more ubiquitous, it’s easy to tune out. Disruption, virtual reality, fintech, chatbots, blockchain, robo-somethings, robo-everythings, algorithms, machine learning… the list goes on.

The good news is we’re here to wade through it all for you, serving you up what you need to know when you need to know it, and breaking down in simple human-speak what this means for your business, and what we can adopt on your behalf to help your bottom line.

We do want to talk to you here about algorithms and machine learning, as we’ve been doing some great work behind the scenes in this space, and we have high expectations when it comes to the tangible benefits on offer to you as an AFG broker.

We’re fortunate in that we have a vast repository of data, as do our lenders and our business partners. The more data we have, the richer it becomes, and the easier it is to turn into proprietary algorithms which is where the real value of data lies.

In tech speak algorithms are encoded rules of operation guiding how customers interact with your products or with your services. In human speak, think how Facebook knows who to tag in your photos, think Amazon or Alibaba who know what else you may like to add to your cart, even before you do, think Uber who use algorithms to connect drivers and passengers, or drivers and hungry homebodies.

And what exactly is machine learning? Machine learning essentially means deep learning or pattern recognition — giving computers the ability to learn without being explicitly programmed. It devises algorithms that lend themselves to predictive accuracy and uncovers hidden insights to keep businesses on the front foot, leading to strategies to fuel profitability.

The application of the algorithm and machine learning in the mortgage broking space means figuring out how different finance customers behave and respond, helping us to define ideal products, processes, experiences and messages to help create a tailored customer experience time and time again. What this enables is better customer experience, and helping build better business and better bottom lines.

Machine learning needs data, and a lot of it, and it also needs it sorted cleverly, tagged correctly and categorised perfectly, and that’s just what we’ve been doing. This sort of human recognition at computer scale can be used to drive desired behaviours into sales, predicting propensities to buy and to discharge, forecast loyalty, anticipate risk, and help better segment at customer level and better cross and upsell.

Watch this space as we roll out machine learning across our SMART program, starting with the red alert campaign as we take this powerful campaign to even greater heights when it comes to best predicting customers at risk of discharge.

A healthy broking business needs a healthy state of mind

Our role is to help support and help you grow your business, and we’ve talked a lot on this blog about just some of the ways we achieve these aims.

Something somewhat outside our remit, but something that is important to mention, particularly on the back of the presentation held at this year’s National Broker Conference by the Hon. Jeff Kennett AC, is mental health within the workplace.

We are not experts in this space and do not pretend to be, but there are a host of Australian businesses and online resources you can go to when wanting to learn more about the importance of mentally healthy workplaces.

Running a Facebook Advertising Campaign

There are four mandatory requirements for a Facebook advertising campaign to be successful;

  1. Well worded ad/s that capture the interest of viewers in 2 seconds or less
  2. Images that suit the campaign and increase engagement
  3. A call to action or lead magnet that makes people want to click
  4. An active Facebook business page to support the campaign

Many fall short on number 4, thinking that a great campaign will work on its own. However, many users will choose to view your page before converting or following and an inactive page is where their engagement will end. We’ve put together some great links and our tips to help you run your Facebook campaign.

Understanding how and why Facebook ads work

Spend some time browsing the Facebook training library to understand what your options are. You may find an idea you had no idea existed. For example, many are surprised to learn of Lookalike Audience targeting, a tool that can be very beneficial in reaching niche

If you’re keen to read more, scroll and enter your email to download your free guide. 

AFG Mortgage Index – June Quarter 2017

Non-majors and fixed rates in favour

Australian Finance Group (ASX: AFG) has today released the AFG Mortgage Index for the final quarter of the 2016/17 financial year.

AFG CEO David Bailey welcomed the news that the non-major share of the market is now at 35%. “Significant structural change to the lending market brought about by tighter lending rules has seen increased flows of business to the non-major lenders.”

“As the majors re-price their mortgages and change lending policies to meet regulatory caps, consumers are turning to mortgage brokers to get a full picture of the choices on offer in such a competitive market,” he said.

“The non-major lenders are helping fill the void left by some of the majors and consumers are benefiting from the fact that a mortgage broker can offer products from those lenders without a branch network.”

A series of rate rises and policy changes?has?also had an impact on the investment market. “In what will no doubt be welcome news for the regulator, investment lending has dropped to 31% of our total lending for the quarter as lenders continue to tighten their criteria,” said Mr Bailey.

Refinancing figures are also down from 35% to 29% as refinance options for borrowers with interest only or higher LVR investment loans decrease and others choose to stay put until the market settles. Lender policy restrictions have also seen the average loan size fall in every state apart from Queensland.

“The part of the market that has been virtually untouched by regulators and lenders is the principle and interest owner category. As a result, those opting to upgrade their homes have increased from 34% to 39% in response to some attractive lending offers,” he concluded.

In a sign that homeowners are picking the bottom of the market for interest rates, the number choosing to fix their rate has jumped significantly to finish the quarter at 23.7%.

Download full report: AFG – Mortgage Index – June 2017

The ABC Guide to Better Business Growth

“ABC… it’s as easy as…”

If you’re humming the tune of ABC by the Jackson 5, you’re not alone. And they were right when they said it’s easy.

Helping fuel growth

It’s easy to build your business in a smart and efficient way when you make the most of the innovation and the initiatives AFG undertakes on your behalf. It’s easy because we provide training, tools, automation and integration to satisfy so many of your requirements, help mitigate the risks and leverage the opportunities.

Helping fuel competition

With growth comes success, and we’ve got a lot of success to celebrate. Broker market share continues to grow, with the AFG broker network seeing solid growth in a very competitive space, with a combined loan book that today sits at over $133B.

We also celebrate the competition and good consumer outcomes we as mortgage brokers bring to the Australian marketplace. In an increasingly complex lending landscape, mortgage brokers are working in the interests of consumers trying to negotiate one of the biggest financial decisions they will likely make, whether on the residential or the commercial front. The probability of those consumers knowing the options available to them without you and the broker channel is remote.

Your value proposition as a broker remains strong. Consumer appetite for choice and competition is high.

We all need to make sure we are doing what we can to continue to provide great outcomes for customers and build strong resilient businesses. It’s important not to be complacent and let our success stop us from continuing to improve. In an industry that can change as quickly as ours, innovation and constant re-assessment of processes and customer experience are key.

Not only are we bringing more competition to the table, we’re also helping you diversify your income to protect against, and best leverage both an ever-changing lender market and ever-changing consumer behaviours.

What more does the future hold? We’ll continue to help you stay ahead of the curve and the pack when it comes to smart growth strategies, helping you meet increasing legal and regulatory obligations, all whilst leveraging tomorrow’s technology.

If you’re keen to read more, scroll to download the PDF version of our brochure available at our recent National Broker Conference. It covers topics such as automating business growth, diversifying your business, and custom digital solutions.