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What You Don’t Know WILL Hurt You – Disruption in the Mortgage Broking Industry

 21st April 2017 by gihan

The release this week of the Sedgwick Report brings yet another major change to this fast-changing industry. If you’re a broker, you might despair because it places even tighter controls over your business, while at the same time you’re facing competition from other outside forces (such as online broking offers like uno).

If you think things are changing faster than ever before, you’re right! As one indication, the Financial Services Disruption Index, which measures changes in the small business lending sector, shows a jump in disruptive forces, led by increasing client awareness of alternatives to the traditional borrowing channels.

It’s easy to say your business – and the industry – is facing disruption, but what does that really mean? More importantly, what can you do about it?

Broadly, there are six kinds of disruptive forces that could turn your business upside down:

They don’t all affect you equally, but it pays to be aware of all of them, so you can adapt to them, embrace them, and perhaps even lead the change in the industry.

Let’s take a quick look at these disruptive forces – and examine how they might affect your business.

1. Competitors

Who are you currently fighting head to head for market share? These are the traditional “disruptors”– the existing competitors in your industry.

It’s easy to get distracted by the big changes from regulators and fintech startups, but don’t overlook your direct competitors. As the MFAA warned recently, a growing number of brokers and a slowdown in new loans mean it’s a crowded marketplace for brokers, and the broker market might be reaching saturation point.

2. Dominators

What happens to a corner store when Coles and Woolies move in? These are the dominators – the big businesses with the big budgets and deep pockets. When they move in to a market, they don’t just threaten you – they threaten all your competitors as well.

For example, in the USA, Google is moving in to the mortgage broking market, teaming up with online real estate database Zillow to sell home loans. Google is using one of its key strategic assets – the ability to store, sort and search vast amounts of information – to help borrowers compare home loans, and then connect with lenders.

Closer to home, the dominators in the industry are the regulators and other government forces. They don’t compete directly with you, but they change the way you run your business – in ways that are generally outside your control.

As noted earlier, the Sedgwick Report recommends changes to the way financial products are sold and offered – for example, replacing value-related commissions with a fee-for-service model. Already, the Big Four banks have promised to implement this recommendation (and all others).

It’s not the first – and won’t be the last – change of its kind. For example, last year, as part of the Financial System Inquiry (FSI), ASIC’s Review of Mortgage Broker Remuneration proposed other changes to the way brokers are remunerated – all in the name of increasing competition and improving consumer outcomes.

3. Start-ups

At the other end of the scale are the start-ups – the new players in your industry. They don’t have your experience, resources, and existing market share, but they also don’t have your baggage and sunk costs, so they can operate with a lean, nimble, and agile approach.

Accenture reports that one-quarter of Australian executives expect the greatest risk of disruption from this kind of competition.

Mortgage brokers – like any businesses with the words “agent” or “broker” in their name – are particularly vulnerable. Many have relied in the past on being gatekeepers to valuable information about lenders, but that information is now more readily available, so it’s easy for borrowers – and lenders – to bypass the broker.

That’s why startup platforms like uno – which bypasses the traditional mortgage broker to connect borrowers to lenders – can disrupt the industry. It’s also why big banks are so willing to invest in them (Westpac alone has invested $16.5 million in uno).

Keep in mind that your customers and clients are rapidly adopting new technology and business practices – which leads to higher expectations. When people can book a flight, call up an Uber, order restaurant food delivery, and more – all from a few clicks on their smartphone – why should they have to wait 29 hours for a lender to process a loan?

It’s not always easy to predict the start-ups in your industry, because you don’t know from where they will spring up. However, you can prepare by acting more like a start-up yourself, always asking the question, “If we were starting from scratch, is this the way we would do it?”

4. Upstarts

What if a competitor doesn’t play by the rules? These are the upstarts – competitors from outside your current space who aren’t bound by the same rules and regulations as everybody else.

Globally, KPMG reports that two-thirds of CEOs are concerned by new entrants disrupting their business models.

Upstarts can make a dent in even highly-regulated industries (as Uber and Airbnb have shown). In fact, in mortgage broking, it doesn’t even mean breaking the rules. ASIC’s Review of Mortgage Broker Remuneration report points out that mortgage referrers such as real estate agents and developers earn almost as much in commission as brokers, despite doing much less work.

5. Randoms

As difficult as it can be to compete against an upstart, it’s even more difficult when you’re blindsided by a random – somebody from outside your industry who disrupts your business without even trying to compete.

For example, the Turnbull Government’s recent announcement to abolish the 457 skilled worker visa will affect some in the mortgage broker industry. It creates barriers for bringing expertise and skills into Australia, but is powerless to block the passport-less, visa-less, connected online world. That gives you an advantage if you’re already outsourcing, offshoring, crowdsourcing, or using other similar ways to engage talent from everywhere. If you’re not, there’s a danger you will fall even further behind.

6. Terminators

Finally, how will you cope with the terminators – the businesses that don’t directly compete with you, but make your industry obsolete?

The mortgage broking industry relies on home loans, which in turn piggyback on the need for property purchases. But what if this need changes?

Of course, housing affordability is a hot topic now, but that’s just one pressure point on the property market. Other emerging technologies and trends could also affect it – for example:

  • Gen Y’s (Millennials) and Gen Z’s don’t necessarily want to be saddled with 25-30 year home loans.
  • Companies like Kasita in the USA and Heijmans ONE in The Netherlands sell movable homes, which let owners move across the country without having to buy and sell property.
  • Driverless cars will make travel faster and easier, reducing the need for people to move house as often.

Some of these trends will take time to take hold, let alone become mainstream. But they should still figure in the strategic planning for your future.

What will YOU do differently?

The first three forces – competitors, dominators, and even start-ups – might already factor in to your strategic planning, because they are more visible and “in your face”. But it’s the other three – upstarts, randoms, and terminators – that could cause more damage, because they are hidden and have greater potential impact.

Don’t ignore any of them! Smart leaders and business owners use all six in their strategic planning.

It’s tempting to put this aside because you’re too busy coping with the deluge of changes right now. But that’s risky, because you’ll never have the luxury of time. Address them now – and plan for them in your future.

To quote Ernest Hemingway from his novel The Sun Also Rises:

“How did you go bankrupt?” Bill asked.

“Two ways,” Mike said. “Gradually and then suddenly.”

Don’t wait for sudden death! Act now.

Future Proof Your Strategy

For more about aligning your business strategy with future trends, download my free white paper Future Proof.

Discover how to identify the six disruptive forces that could turn your business upside down, align your business strategy with them, and find opportunities to leverage them for greater success.

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The Future of Medicine is the Patient … err, Customer

 31st March 2017 by gihan

Last year, my parents moved house after 40 years. When searching for a new local GP, my 80-year-old father’s first source of information was online reviews he found on Google. Although he’s intelligent and computer-savvy, he’s hardly the stereotype of the typical social-media-obsessed Internet user. And yet even he knew – and used – the power of the tools at his fingertips.

The last few years have seen dramatic changes in healthcare technology – such as 3-D printed organs, smartphone ECG devices, predictive analytics and Big Data, and nanotechnology robotic surgery. But the biggest change in healthcare is the profoundly different relationship between patients and providers.

It’s become a cliché to say healthcare is becoming like a business and patients are acting more like customers. And yet, many healthcare providers don’t understand this profound change in their profession.

Siemens highlighted this in their “Picture the Future” report about healthcare in Australia in 2020: We’re changing focus from cure to prevention, from sickness to wellness, from acute events to chronic diseases, and – most importantly – from patients to customers.

Eric Topol describes this shift in his book “The Patient Will See You Now”. You don’t even need to read the book – the title gives away the punchline.

But, even if you understand it, are you living it?

Healthcare consumers are customers first and patients second, and expect to be treated that way. They expect instant access to information, communication via e-mail and SMS, ownership of their private data, fast response times, and the right to review poor service (and praise exceptional service). They don’t want to sit for hours in germ-filled waiting rooms, no longer automatically trust a white coat and stethoscope, and won’t rely on an opinion from just one healthcare professional.

Deloitte’s Centre for Health Solutions asked patients how comfortable they would feel dealing differently with medical professionals. The results offer a fascinating insight into the modern patient:

  • 60% would be comfortable with video consultations rather than an in-person appointment.
  • 55% were happy to receive medical images (such as x-rays) by e-mail.
  • Almost three-quarters would be happy choosing a treatment online based on advice sent by their medical professionals.
  • Almost three-quarters would prefer e-mail and SMS consultations.

In most other industries, suppliers would be falling over each other to serve these customer needs. In healthcare … not so much, unfortunately. A Price Waterhouse Coopers survey of doctors showed many of them simply will not adopt these practices. Here are their top five reasons:

  • 45% said they have concerns about patients’ privacy and security.
  • Almost as many said they don’t get paid for things like e-mail, SMS and video consults (there’s no CMBS code for it!)
  • One in three said it would be too expensive to implement.
  • About the same number didn’t know enough to make an informed decision.
  • A quarter said it would disrupt their current workflow.

What about you? Are these real reasons for you not to change – or just excuses? It’s always easy to find reasons to say No, but it takes real leadership to say Yes.


I wrote this article for Medical Forum WA, where it appeared in the February 2017 issue. Read the magazine online at medicalhub.com.au.

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The Future of Healthcare

 21st October 2015 by gihan

The Future of HealthcareEvery industry is facing change, but none more so than healthcare. Big data, predictive analytics and the consumerisation of healthcare are just a few of the trends affecting the way we will look at healthcare in the future.

For example:

  • What if your doctor could e-mail images (like X-rays) to you, instead of you having to go in to pick them up?
  • What if heart patients could do an ECG themselves for less than a dollar?
  • What if an iPhone app could take a photo of some food and automatically tell you the number of calories in it?

These “what if” scenarios aren’t in the future; they are available right now. I talked about these in my webinar last week.

Even if you don’t work in healthcare, you will find this webinar useful because some of the themes are common across other industries – e.g. consumers taking more control, big data providing smart diagnosis.

After the webinar, I asked participants “What was the most useful thing you learned today?” Here are some of their answers:

“All the coming technology”

“Patients want to connect to technology but healthcare professionals find the practice change difficult”

“The positive take on where we’re going – very refreshing! (sadly…)”

“Increasing use of technology in health care”

“How much more advanced technology already is than I thought!”

“Information in a field I would not normally have accessed”

The Future Proof Webinar Series

The Future Proof webinar series will keep you in touch with our future – what’s ahead, what it means for us, and how to stay ahead of the game.

In each webinar, I’ll cover an important topic about the future – for example, the shift of power to Asia, the changing workplace, healthcare technology, the shift to customer-centric business, big data, and more. This is not just theory; I’ll also give you practical examples and ideas for you to future-proof your organisation, teams, and career.

Register here

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Housing Challenges and Innovations in Our Fast, Flat and Free World

 16th October 2015 by gihan

With rising house prices, rents rising faster than inflation, and rent prices outpacing incomes, Australia is facing many challenges with affordable housing and social housing. The solutions we’ve used in the past won’t work anymore, and new innovative solutions are required to manage housing affordability.

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10 Energy and Resources Innovations in a Customer-Centric World

 18th September 2015 by gihan

In our fast, flat and free world, energy companies, resource companies and other utilities need to involve their customers and community in providing their services. Smart companies around the world are doing this in a number of innovative ways.

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Insurance Industry Challenges and Innovation in Our Fast, Flat and Free World

 25th August 2015 by gihan

Insurance Industry Challenges and InnovationThe insurance industry in Australia faces many challenges from competitors, regulators, the changing workforce and increasing customer choices. Smart organisations – large and small – can take advantage of the opportunities to stand out and thrive.

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How Real Estate Agencies Can Stay Ahead of the Game In Our Fast, Flat and Free World

 20th August 2015 by gihan

How Real Estate Agencies Can Stay Ahead of the GameThe real estate industry in Australia is facing challenges from technology, government, an uncertain market, and increasing competition.But there are also great opportunities for smart agents and agencies to stay ahead of the game.

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Five Easy Ways for Local Governments to Engage Their Community Online

 21st May 2015 by gihan

The Internet has made it so much easier now for organisations to connect with their “customers”, and for local councils this means engaging with their residents and other stakeholders. Many councils see the opportunity and recognise the need, and some even want to do this more actively. But it’s not easy to get started.

The good news is that you don’t need to start by investing a lot of time, money and other resources into, say, a Facebook page. If you already have one, great! But if you don’t, it does take significant work to make it effective. And then you have to deal with the ongoing issues of management and monitoring, and of course carefully addressing abuse and misuse.

However, there are plenty of other options available as well. Start with the attitude that your residents are proud of their town, want to help, and will gladly contribute if you make it easy for them.

Here are five examples of how local councils can reach out to their community online.

New York City: Dead Pedal project reports abandoned bikes

Local residents would gladly report things that need council attention if only there was some easy way to alert you. A variety of apps have sprung up to help in this area – for example, Los Angeles residents have an app to report water leaks and wastage. But you don’t need to go through the expensive and time-consuming process of creating your own app.

In New York, for example, the “Dead Pedal NY” project allows residents to use Instagram to report bicycles that have been abandoned (but still tethered to bike racks), so the council can remove them.

This doesn’t require any special technology. The resident just takes a photo, tags it with the hashtag #deadpedalny, and posts it on Instagram. The council simply monitors that hashtag to be alerted of new sightings.

In fact, this project wasn’t even started by the local council; it was an initiative of a local resident who saw a problem and an easy way to address it!

How can you use this idea in your local area to help residents alert you? All you have to do is promote an Instagram hashtag!

Auckland: Residents design street layouts

When you want to share planning ideas with residents for public comment, the old way is to just show them the plans (in print or online) and ask for their comments. That might sometimes still be the only feasible option, but it’s possible that you can tap into existing technology as well.

For example, the Streetmix Web site is a dynamic tool to help users design the layout of a street – showing traffic lanes, cycle lanes, footpaths, bus stops, and so on. It was developed in the USA, but is available to everybody.

For example, in Auckland, a transport advocacy group uses it to blog about proposed street changes and encourage other users to offer their own suggestions. Again, this project wasn’t initiated by the town council, but there’s no reason you can’t start such a project yourself.

And don’t limit yourself to street design. Consider other online collaboration tools like mind mapping tools, online bulletin boards, photo boards, and more. They could all be simple ways to get input easily from residents and other stakeholders.

Heifi City, China: QR code badges help lost seniors

In a pilot project, the local government in this community has issued senior citizens with badges displaying a QR code, so other residents can help them if they get lost. Scanning the QR code shows the person’s ID card number, family phone numbers, and address details. Of course, you could achieve a similar outcome using a business card, but the badges can contain more information, and are made of durable plastic.

QR codes look like complicated technology, but they are dead easy to set up and use. They are simply a way of storing data (or a link to a Web page) in a way that smartphones can read. Could you provide individual QR codes to certain people in your community (it doesn’t need to be senior citizens) to help them in some way?

Monmouth, Wales: Wikipedia town

While we’re talking about QR codes, I’ll mention Monmouth in Wales, which is the world’s first “Wikipedia town”. Online, Monmouthpedia is a mini-encyclopedia about Monmouth, with thousands of articles and photographs about the town. That’s nothing to sneeze at, but the real magic comes with the connection to the “real world”, with QR codes on plaques and labels all around the town, each linking to the relevant online article. That means anybody visiting a place of interest with a QR code can just scan it with their phone to immediately read more about it online.

Admittedly, this project does cost money to create and installing the ceramic plaques. But it’s easy to create versions of this project that don’t cost as much money. For example, the Monmouth Library has added QR codes (in the form of low-cost sticky labels) to some of their books, so readers can scan the code to find out more about the book and author.

How can you use QR codes to give people more information about objects or places of interest?

Create Jauntful city guides

You probably print local guides to highlight places of interest, services and other facilities for your community. However, these guides never cover everything, and different people want to know different things. What if residents could create their own guides, based on their interests, for visitors and locals? The free Jauntful service allows them to do exactly that.

It was designed for consumers – travellers and locals – to create guides about the towns and cities they love. You create a guide that shows a map of the town, highlighted spots on the map, and a short description of each spot. They can use it for anything – for example, favourite restaurants, night life, historical landmarks, shopping hot spots, public toilets, or whatever. Just like a professional brochure, the guide can be printed for offline access (and it’s available online, of course).

Although this wasn’t designed with local councils in mind, you can use the technology yourself. Of course, you could just create your own guides, but an even better option is to invite residents to create their own. Perhaps you could run a competition asking for submissions, and then link to the best guides from your Web site. You could even print the best guides and make them available at council offices, libraries and community centres.

Which of these ideas could YOU use?

As you can see, these are all simple, low-cost ideas for reaching out to your community online – without breaking your budget or overstretching your limited resources. You might not be able to do them all, but I’m sure you could easily do one or two of them immediately. At the very least, do one of them now (just to get some momentum), and then think about other ways to engage your community using the power of the Internet.

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The Future of Private Hospital Healthcare in our Fast, Flat and Free World

 8th May 2015 by gihan

Private hospitals in Australia face increasing pressure and challenges, and need to constantly change, grow and innovate to remain viable. This presentation shows some of the biggest challenges private hospitals face, what’s happening elsewhere in the world, and what they can do to stay ahead.

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Real Estate Agents: Turn Your Letterbox Drops Into Client Magnets

 7th May 2015 by gihan

Real Estate Agents - Getting More LeadsMany real estate agents still use old-fashioned letterbox drops to promote their services. Why? Because they work! But are they working as well as they could? If your letterbox drop just announces that you’ve sold another house, it just looks like everybody else’s. What’s worse, it’s not really useful to the resident – unless they just happen to be thinking about selling their own house. But what are the odds of that?

What if you could stack the odds in your favour by creating letterbox drops that people want to keep – even if they aren’t in the market for selling their home? That would make you stand out from everybody else, and make people more likely to call you when they are ready to sell. In other words, you turn your flyer from a boring advertisement (that most people would bin as junk mail) into a client magnet that will attract them to you.

The secret: Focus on them, not on you.

To do this, give them something useful – not just an advertisement for your services. Put yourself in a typical homeowner’s shoes and ask yourself what you know that could be useful for them to know. This has nothing to do with selling their property (because remember, at any time, most people are not in the market to sell) and everything to do with making their lives better.

For example, you know some quick tips for vendors to make their home more attractive for a Home Open. Those same tips could be useful for anybody making their home more attractive to host a dinner party.

As another example, your property managers know what tenants and landlords should be doing to prepare their property for winter (clearing gutters, for example). That same advice applies to all residents – whether or not you manage their property.

So how does this apply to letterbox drops?

Simple. Instead of creating a flyer advertising your services, create a flyer with some useful tips for the occupant.

That’s it! Just create tip sheets with relevant suggestions, so they are valuable for the reader. Of course, you will include your name, photograph, logo and contact information as well. But that’s secondary – the main purpose is to provide practical, valuable advice.

Here’s how to get started …

If you’re not sure how to get started, take a leaf out of trashy magazines! Go to your local newsagent and pick up the latest issue of Cosmopolitan, Men’s Health, or Dolly. Then browse the headlines on the cover, look for headlines with numbers in them, and use them as inspiration for titles for your tip sheets.

For example, here are some headlines from recent issues of Cosmo:

  • 5 Hot Tips for Hot Lips, Hair, Skin and Nails
  • 176 Shoes and Bags You’ll Love
  • Bye-Bye Belly! 3 Easy Ways to Lose It
  • Better Abs in 5 Easy Moves
  • 15 Secrets Slim Women Know
  • 75 Crazy-Hot First Date Moves

Now just change the numbers (aim for 5 to 12 tips, not 75 or 176!) and a few of the words to create titles for your tip sheets.

Want some examples? OK, here goes – based on the six examples above:

  • 5 Hot Tips for Hot Summer Days (tips on how to keep your home cool in summer)
  • 6 Local Restaurants You’ll Love (this is even better if you negotiate special deals with these places for people who bring in your flyer)
  • Bye-Bye Clutter! 7 Easy Ways to Lose It (tips on how to tidy up quickly)
  • Better Home Security in 5 Easy Moves (tips on how to quickly and affordably make a home more secure)
  • 6 Secret Picnic Spots North Shore Locals Know (this shows you’re a real expert in the local area)
  • 8 Crazy-Hot Smartphone Apps (interesting and useful lifestyle apps – not real estate listing apps)

If you plan your topics around dates or coming events, they can be even more powerful – for example:

  • Bye-Bye Crowds! 5 of the Best Local Spots for Watching the New Year’s Eve Fireworks
  • 6 Local Shops for Creative Mother’s Day Gifts
  • 8 Secret Romantic Spots North Shore Locals Know (for Valentine’s Day)

These are just a few of the ideas you could generate from those headlines. It doesn’t take much to come up with even more, especially if you ask everybody in the office to play around with them for a few minutes. You’ll be amazed at the results.

Then create the tip sheets.

Of course, the process above only gives you the headline for your tip sheet, not the tips! But it should now be easy for you to write up the tips, because they are based on your knowledge and expertise.

Again, you can tap into the knowledge and expertise of everybody else in your office. Just send around an e-mail with your proposed headline and ask for ideas. You’ll probably get more ideas than you need, which means you can pick those that you think are the most useful.

Each tip only needs to be a sentence or two, so you don’t have to be an expert writer to create the tip sheet.

If it’s not easy and you’re struggling to get started, try another topic.

Can you use this to make YOUR next letterbox drop stand out?

This is an easy idea to put into practice – and costs nothing more than what you’re paying already. And yet, most agents won’t do it! So if you do, you’ll stand out from everybody else – and will create something memorable in the minds of your future clients. Isn’t that worth giving it a try?

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