Key implication: Distribution has become destiny in Australian mortgages. Mortgage brokers now control around 77% of new home-loan flows, according to recent Mortgage & Finance Association of Australia (MFAA) data reported by industry outlets in June and September 2025. In practical terms, banks that underinvest in broker experience, pricing agility and decisioning speed are surrendering market share—while broker-centric lenders are compounding gains.

1) Distribution power shift: applying Porter’s lens

Porter’s Five Forces says channel power matters as much as product. Australia’s broker channel is now the de facto customer acquisition system for home lending. When one route to market captures three quarters of new volume, buyer power consolidates on the intermediary side. The result: lenders face a new equilibrium of pricing, service-level agreements (SLAs) and product design anchored to broker expectations (and their clients’), not to branch-led playbooks.

Context matters. Australians are increasingly seeking guidance through complex rate cycles and product churn, a trend highlighted by trade press through 2025. As with search, where the ACCC notes Google holds roughly 94% market share in Australia (2024), a dominant gateway can set the terms of engagement. In mortgages, the broker “gateway” is now the stadium, not the turnstile.

2) Economics and ROI: the new calculus for lenders

For banks, the broker channel is a variable-cost acquisition engine that can scale without branch fixed costs—but only if conversion and retention keep pace. Consider a simplified lens:

• Acquisition: Broker commissions translate into predictable unit economics per funded loan, often offset by reduced direct marketing and branch overheads.
• Speed-to-yes: File cycle time now directly drives win-rate. Each day shaved from “time to decision” materially improves conversion in a broker-quoted environment.
• Lifetime value: With refinancing more habitual, retention workflows (pricing triggers, proactive repricing) are as valuable as acquisition. A 2–3 percentage point uplift in annual retention can comfortably offset commission differentials.

SME strategy research consistently links disciplined strategy choices to competitive advantage and performance (see studies of construction and real estate SMEs), and the same logic applies here: choosing to win “via broker” demands capital allocation into broker tech rails, not just product rate cards.

3) Technology and AI: from compliance drag to growth engine

Australia’s AI conversation has swung from ethics to enablement. The government’s AI Ethics Principles (2019) and the ATO’s governance framing for general-purpose AI (2024) underscore the need for robust guardrails. Yet industry research in 2025 points to a gap between adoption and commercialisation in Australia’s AI ecosystem—markets are experimenting, not yet extracting full value.

For brokers and lenders, this gap is a competitive opening. Practical AI use cases that deliver immediate ROI include:

• Intelligent pre-assessment: Automated document triage, income verification and policy fit scoring can cut hours from initial file preparation and reduce lender rework.
• Advice co-pilots: Generative AI can summarise lender policies and scenarios for clients, with transparent source links to meet conduct standards.
• Compliance by design: Real-time prompts for best interest duty records, file notes and fee disclosures reduce remediation risk and audit time.
• Decisioning acceleration: Lenders deploying ML-assisted risk scoring and exception workflows are achieving faster “time to yes” without relaxing risk appetite.

The technical hinge is orchestration: integrating AI into broker CRMs, aggregator platforms and lender APIs to shorten the loop from customer query to conditional approval. Firms that treat AI as workflow infrastructure—not a point solution—will see the step-change in conversion and cost-to-serve.

4) Competitive landscape: case evidence and playbooks

Recent reporting has highlighted how broker-powered distribution is boosting challenger lenders. Macquarie Bank’s mortgage growth in 2025 has been repeatedly linked to its digital excellence and strong broker engagement, underscoring a clear playbook: meet brokers where they work, integrate deeply, and outperform on consistency and speed.

Aggregators and franchise networks are also moving up the value stack—investing in data, compliance tooling and customer lifecycle marketing. As brokers become relationship owners for life events (first home, upgrade, refinance), they can steer cross-sell to insurers and wealth partners, incrementally eroding banks’ direct cross-sell advantage.

5) Conduct, regulation and trust capital

With distribution concentration comes scrutiny. Australia’s broker remuneration framework is designed to align incentives with consumer outcomes, and regulators will watch for conflicts as AI enters advice workflows. The lesson from other concentrated markets (again, ACCC’s search findings are instructive) is that gatekeeper power attracts policy attention—on transparency, switching friction and competition.

Trust is the asset that compounds. Files that are complete, consistent and compliant reduce friction for lenders and speed approvals for customers—creating a positive feedback loop for the broker channel. Expect increased investment in auditability features (immutable logs, explainable AI, consent capture) to maintain trust with both lenders and regulators.

6) Outlook: scenarios and strategic moves for 2025–2027

Even as the global cycle points to easing in some markets in 2025 (J.P. Morgan Research expects emerging-market central banks to continue cutting rates), Australia’s path will depend on local inflation dynamics. Two scenarios matter:

• Refi rebound: If rates ease, churn rises. Brokers, already the default switching channel, gain further share of flows. Lenders should prepare retention squads, targeted repricing and instant discharge counter-offers.
• Higher-for-longer: If rates stick, volumes slow but complexity rises (co-borrowers, multiple incomes, policy nuances). Brokers’ advice value increases, keeping share elevated. Lenders must double down on policy clarity and pre-qualification tools.

Either way, the broker share “ceiling” is not obvious. With the channel above 75%, incremental share gains are still available for lenders that differentiate on SLA reliability, policy transparency and broker experience.

What executives should do now

• Rebase the P&L: Treat broker commissions and tech enablement as core acquisition cost. Build a 24-month view of unit economics across broker, digital-direct and branch to guide capital allocation.
• Compete on time: Publish and meet broker SLAs to the hour. Instrument every stage—doc receipt, verification, credit decision—to target a measurable reduction in cycle time.
• Industrialise AI safely: Deploy AI where it shortens work (triage, policy search, compliance notes) with governance aligned to national ethics principles and ATO-style control frameworks.
• Own retention: Stand up real-time pricing triggers and broker-friendly retention offers. Share data with brokers on customer risk of churn to enable joint saves.
• Deepen platform ties: Integrate with major aggregator CRMs and e-lodgement tools. Make your policy machine-readable; treat brokers as developers and expose APIs accordingly.

The strategic takeaway: in a market where brokers command the funnel, lenders win by being the easiest partner to place business with—technically, operationally and ethically. The rest is commentary.