In Conversation: The NBL Market – Opportunities, Challenges & the Future
Non-Banks’ Expanding Role in Finance: NBLs are thriving in a well-regulated environment with strong balance sheets, positioned to support home ownership and SME lending. They’re filling market gaps left by traditional banks and embracing innovation to drive inclusive financial access.
Technology Reshaping Lending: Rapid tech adoption is transforming lending processes, with shorter customer lifecycles and competitive mortgage markets. Technology is enhancing efficiency and enabling cost savings for consumers.
AI Adoption & Operational Impact: AI is improving productivity in software development and customer service, with potential to detect financial hardship and reduce human error. However, credit assessment remains a human-led art, with healthy scepticism toward full automation.
Cultural Shift in Credit Assessment: Institutions are experimenting with algorithms and large language models (LLMs), but seasoned credit professionals still outperform AI. The tension between human instinct and automation is driving innovation and performance benchmarking.
Regulatory Landscape & Innovation Tension: While regulation has built resilience, excessive red tape risks stifling innovation. Concerns include inconsistent broker duties, SMSF complexity, and the lingering impact of the Royal Commission. Calls for smarter, streamlined regulation are growing.
Maintaining Balance & Consumer Trust: NBLs must navigate trust and responsibility carefully, especially as they serve customers excluded by traditional banks. Regulation must evolve to support innovation without compromising consumer protection or financial stability.