Australia's fifth largest mortgage lender, ING Direct, plans to capitalise on its "strong competency" in direct distribution of savings products to develop a leading role in direct sales (using the internet and telephone) of mortgages.Last week ING Direct released its results for 2009, reporting almost four per cent growth in its mortgage portfolio, which is now worth $36 billion. That puts it behind Commonwealth Bank (with BankWest), Westpac (with St George), National Australia Bank and ANZ in the home loan market pecking order.With no branch network, ING Direct sells 75 per cent of its home loans through brokers, 20 per cent through white label arrangements and five per cent direct.The bank's executive director in charge of mortgages, Lisa Claes, said the direct channel had the potential to contribute 15 or 20 per cent of new business flows in the next few years.Claes said: "There is an emerging demographic that prefers the ease and speed and accessibility of a computer."Direct grew faster than the other channels last year. It was off a very low base but we have 1.4 million customers who are used to working through the direct channel to manage their savings accounts. They are used to dealing with us that way."Our channel strategy is to grow our direct distribution as fast as our customers want us to. We see an emerging generation that is very tech savvy."Direct distribution is still a tiny part of the home loan market. Claes said there was no question there were complexities."There are a lot of hand-offs with a mortgage sale that you don't have with setting up an online savings account. You have the involvement of lawyers and valuers."But people used to say you couldn't set up a savings account online. We have an online home loan pre-approval with a two-minute turnaround and we have online and telephone assistance."Claes said the regulatory landscape was changing, with legislation to introduce the national electronic conveyancing system due later this year. The issue of electronic verification of identity was raised in submissions to the Australian Law Reform Commission's 2007 review of the Privacy Act.Claes said: "We have not got to the end point there but the banking industry is maintaining a dialogue on the issue."