Talk work, the future of fintech, advice and a ghost
(As interviewed by Veronica Gravolin, editor) Firstmac is Australia’s largest non-bank lender and has provided over 100,000 home loans since it was first started by Kim Cannon 40 years ago and currently has over $11 Billion in loans under management. Today Kim Cannon is still the CEO & Owner of FirstMac AND Marie Mortimer is the Managing Director of loans.com.au. Marie Mortimer is the most exceptional MD in her own right and also happens to be Kim Cannon’s daughter. Talk about a gene pool… When I asked if it would be possible to interview Marie and Kim and have them on our cover, I really did not expect a yes. I’m basically the luckiest person I know though, and turns out that as well as being ridiculously smart and successful, they are also incredibly, incredibly kind and generous. So here we are. I’m still starstruck and here’s some insight into Kim and Marie’s world.
Kim, how did it all get started 40 years ago and what prompted starting the business?
I started the business with my wife when we were in our early 20s. We were originally in the equipment finance business. In the early 1990s, our business was changed for good when we started offering home loans. I was there at the beginning of the home loan revolution in Australia in the 1990s when non-bank lenders first appeared to take on the big banks. Within the first five years, the big banks stood up and took notice and they dropped their home loan rates to compete with us.
Over the years, the direction of the company has changed from being a mortgage broker to becoming a mortgage manager and now we are a funder with our own securitisation program that has raised more than $24 billion in RMBS to fund prime home loans in Australia.
We’ve done all of this over the last 40 years from our head office in Brisbane. We are a family business that has come from some very humble beginnings to become the large company we are today.
What do you think has led to the long term growth and success of Firstmac in such a competitive and constantly changing environment?
Firstmac is a 40-year old FinTech. Our business has changed as technology has changed and we see ourselves as a tech company first, and a finance company second. Our mindset is to “build it ourselves” so we have stayed ahead of the market because we have stayed up to date with technology. We have built our own proprietary systems that can process and approve a loan very quickly. We don’t run on legacy systems, we evolve our systems over time to stay ahead of the game. Staying up to date with technology has enabled us to focus on the service we offer our customers.
At Firstmac, we are very nimble and if we see an
opportunity in the market we are able to roll out a new product or a new service very quickly. The major banks and credit unions in Australia can’t do this, so it allows us to stay ahead of the market at all times.
How do Firstmac and loans.com.au differ and what was the driving force behind Marie launching loans.com.au in 2011?
Firstmac has been funding home loans in Australia for many years. A lot of people still don’t know who Firstmac is and don’t know just how big we are because we have traditionally distributed loans via our 3rd party partners such as Mortgage Brokers and Mortgage Managers.
Marie launched loans.com.au as a new initiative for the company where she took our innovative online application that had been used by our brokers for many years and converted it for customers to use on a website, allowing Australians to apply directly with us themselves. This
concept allowed borrowers to access lower rate home loans directly from a wholesale lender, saving them thousands of dollars. From the very beginning, loans.com.au has been a huge success and Firstmac currently funds and manages an $11 billion home loan book with loans.com.au representing approximately $6 billion of that amount. Firstmac is Australia’s largest non-bank lender in the prime home loan space and we are the 14th largest lender in Australia by book size behind the major banks and large credit unions.
What are your top 5 tips for prospective borrowers to get home loan finance?
1. Do your research online to find the best rates and products that suit you.
2. Don’t just take for granted that your bank is offering you the best deal. There are some much better alternatives out there once you start looking.
3. Have all of your documents ready to go before you apply so your approval isn’t delayed as you search for payslips and bank statements etc.
4. Before you apply, use your chosen lender’s borrowing power calculator and complete any prequalification forms to see if you are likely to be successful. Only then should you invest the time in making a full application.
5. Calculate how much deposit you have versus how much money you want to borrow. The Loan-to Value (LVR) ratio is important because the lower it is, the better the interest rate you can get. An LVR below 80% will also let you avoid buying Lender’s Mortgage Insurance which can be many thousands of dollars.
Why do your customers borrow through Firstmac and not through a major bank?
People are disgruntled with how the major banks have been treating them over the years and the high interest rates they have been charging. As technology has moved forward, people can readily research home loans themselves and they are becoming more educated that there are
alternatives readily available outside the major banks.
People select Firstmac and loans.com.au over a bank because we offer a better personalised service and our products are more competitive. Because we don’t run legacy systems like the traditional bricks and mortar banks and our business model isn’t branch based, we have a lower cost base which we pass onto our customers in the form of lower interest rates.
The Banking Royal Commission has left many people wondering if the future of lending will be different, particularly where it comes to mortgage brokers. What thoughts do you have on how the future of home loans in Australia might differ as compared to how it works today?
We are going through another iteration of finance in Australia at the moment that we haven’t seen since the early 1990’s when non-bank lenders started to compete against the major banks. We know that banking and finance in Australia is changing and it is different today from what it was 10 years ago and it will be different again in the next 10 years. The government and
regulators are making changes to allow even more competition into the banking space and there are a lot of new FinTechs taking advantage of this.
Lending is different but the technology can also be adopted by mortgage brokers to facilitate the lending process with their customers. Technology won’t replace people, but it will make brokers and lenders more efficient and enable them to offer better service to their customers. Using technology well, they can build better relationships with the customers with a long-term view.
How will your businesses utilise technology to further support your customers and drive further efficiencies in your business?
At Firstmac, we are always adding new things to our tech stack to make the finance process less about the process and more about the customer experience. Our technology directly and indirectly impacts our customers and, to be honest, we know that finance is boring and the goal at the end of the day is to own that new home or car and pay off the loan as quickly as possible. We think that by staying innovative, we create a meaningful experience for our customers and we save them a lot of money in the process. We stay nimble and cost effective so that at the end of the day it’s our customers who recieve the benefit.
What advice would you give yourself back when you first started Firstmac with all the knowledge and lessons you know today?
When you are innovating in any industry you should never accept “no” as an answer. There is always a way around “no”.
What exciting things do Kim, Marie and the businesses have coming up? Anything you can share with our readers?
We have some pretty cool things coming on board for new and existing customers in the coming 12 months. We have spent a lot of time recently focusing on our app technology and we have a roadmap to deliver even more to our customers very soon. We are also in the middle of acquiring an ADI which means that you will start to see more banking products distributed through Firstmac and loans.com.au. We have forced competition in lending and our dream is to do the same thing with banking. We are a 40 year old FinTech with some very good commercial experience and we know that we can work with our customers and our partners to be at the front of the current banking revolution in Australia.
You previously owned the building where “Keeping It Real Estate” is now headquartered and I’ve heard you have quite the ghost... Could you possibly share that with us?
We had our very first offices up on Petrie Terrace in Brisbane. I can confirm that some spooky activity has occured in the past in your building. In the early 80s I was working by myself on a Saturday and we used to have a telex machine to send messages. I recall one morning while I was working, the telex machine started typing by itself and I got a message asking ‘How are you?’. I packed up and went home very quickly after that! We also had a few other situations over the years in that building that used to spook us and our staff! Hopefully, those ghosts are being good to you guys!
So there you have it. I’m now never going to be alone at work EVER AGAIN. And if anyone is ever wanting to lose a bet, just tell Kim Cannon or Marie Mortimer that something can’t be done.
CEO & Owner