9 October 2000
ONE of the leading non-bank lenders, Wizard, is typical of its breed - brash, aggressive and totally customer focused.
Since opening its doors in Sydney in 1996, the company has steadily expanded throughout New South Wales, Queensland and Victoria to provide an integrated service accessible via shop fronts, the Internet, telephone or mobile staff.
Over the past year this expansion has gathered pace, with an average of one new shop front opening each week, bringing the total number of shops to 55 in the three states, and with plans under way to add another 10 in South Australia, Western Australia and New Zealand before next year.
``Wizard is leading a new wave of competition in the financial services industry," says Wizard chairman Mr Mark Bouris.
``Wizard's goal is to provide customers access to value-for-money financial products and services that are designed to deliver real benefits.
``Any new product must add value to the existing relationship Wizard has with each customer," he says.
Wizard has a track record of using strategic partnerships to enable it to deliver quality products and services. For example, it has gone into partnership with ABN-Amro subsidiary Australian Mortgage Securities to deliver mortgage products, and with Permanent Trustees to deliver cash-management services.
This strategy is allowing Wizard to reach a broad consumer base while keeping overheads low to keep the real cost of borrowing down and offering attractive cash-management rates. The financial services group is also well placed to take advantage of the Internet as an integral part of its business.
Banking deregulation in the 1980s dramatically changed the provision of financial services. New players hold about 15 per cent of the home-loan market in Australia - now valued at about $230 billion - and are estimated to be capturing more than 40 per cent of new business.
For Wizard, this means the number of home-loan applications processed has risen by more 500 per cent in the past year to more than 700 a month, with the average size of the loans at $208,000.
Wizard has about three per cent of the total new mortgage market each month, and 20 per cent of the total non-bank market each month, making one in five non-bank loans a Wizard loan.
Almost 90 per cent of new loans written by Wizard are its standard variable ``smart loan" - a high-value, low-cost product.
Last year Wizard launched its cash management service called ``money Wizard", the first plank in its strategy to become a total provider.
This service offers one rate of return for all amounts, with no entry or exit fees. With a rate above five per cent, it is consistently one of the top rates available on the market.
The recently launched Wizard ``construction loan", introduced by customer demand, gives customers the opportunity to settle the finance for land before providing council-approved construction plans, simplifying the loan process.
Wizard personal loans were the second non-mortgage product introduced into its portfolio and are designed to assist customers with their mortgage and non-mortgage lending needs. It also gives Wizard the chance to build relationships with customers not seeking a mortgage.
Underwritten by Capital Finance Australia, a subsidiary of the Bank of Scotland, Wizard loans can be used for any consumer or domestic purpose, are available for amounts ranging from $5000 to $20,000, unsecured, for terms of up to five years, and usually able to be approved within 24 hours.
Wizard was the first non-bank lender to launch an Internet site. Using eWizard, borrowers can apply online for a loan. The site was also designed for those researching the home-loan market, as it includes calculators for working out rate comparisons and repayment amounts.
Each month, the eWizard site has more than 12,000 visits and Wizard processes more than 200 loan applications over the Internet. It predicts its online applications will grow to more than 400 a month over the next year, 30 per cent of new business.