1. News
2. ›Banks To Expand Cross Selling Incentives

Banks to expand cross-selling incentives

Increased cross-selling of products via the broker community will be a major plank in mortgage lenders' strategies in the coming months - and brokers will be incentivised accordingly, says Citibank's Head of Mortgages.

Steven Ramage argued in a roundtable event yesterday that using the broker community to cross-sell products – including products bundled with mortgages – will be key to lenders' strategies going forward.

"Forty to forty-five per cent of loans come through mortgage brokers: it's a big part of the market," said Ramage. "The question is now 'how can you use brokers as a distribution channel to encourage customers to take up more than just a mortgage?'

"A lot of the remuneration schemes in place are focused towards that: essentially paying more if a broker can sell more products or cross-sell the right products that will give you more revenue across the board."

Such schemes could be either direct or indirect, said Ramage. While Citibank is choosing to reward brokers indirectly through a scorecard system, where brokers will fall into different commission categories according to various criteria (including bundle sales), other banks have chosen to follow a more direct route. Citibank has been working hard to ensure that any remuneration structures are in line with the National Consumer Credit Protection Act 2009 – although ASIC have not been vetting these directly.

"It's up to us to make sure we comply with what ASIC want," added Ramage. "Therefore, we work very closely with our legal and compliance teams in developing these packages and structures, because we want to get it right."

By Kevin Eddy | 18 Jun 2010