Q. What opportunities are you seeing for brokers in today’s market?
We’re entering a period of more stable interest rates, albeit briefly. Over 20 per cent of fixed-rate loans haven’t yet reached their expiry dates, meaning many clients are still enjoying rates as low as 2 per cent and haven’t felt the impact of recent rate hikes. This presents an element of uncertainty.
For brokers, this means returning to the basics: staying close to clients while also focusing on new business, as new business fuels growth. However, there’s a significant opportunity right under brokers’ noses with their existing loan book and clients.
Q. How does Sherlok help brokers find value in existing clients?
We believe a broker should maintain a relationship with their client throughout their entire borrowing journey. Once a client chooses a broker, there’s no reason for them to look elsewhere for their financial needs over the next 30 to 50 years.
Sherlok facilitates memorable interactions between brokers and their customers by predicting which clients are at risk of leaving. This enables brokers to concentrate their efforts each week on retaining clients we’ve identified as likely to leave within three months.
We also reprice their home loan interest rates to more competitive rates, sometimes saving clients tens of thousands of dollars annually. These savings can be substantial, especially for large mortgages. After that, we generate refinancing leads.
Our approach is threefold: predict which clients are at risk of leaving and are on higher rates, reprice to retain them, and refinance if better rates are available.
Q. How does Sherlok harness data to achieve this?
Brokers are great at initiating relationships with clients, but after the settlement, important client data often becomes dormant and untapped. This gap can limit a broker’s ability to provide ongoing support and personalised service.
Sherlok’s AI and ML technology continually analyse this data to identify patterns and anticipate client needs. Each week, we provide brokers with a list of clients who are likely to take action in the next two to three months, enabling brokers to proactively engage and retain these clients.
Q. What does this process look like for the broker?
Each week, brokers receive a notification saying, “Hey, you’ve got clients who are at risk of leaving; please review and approve them to be repriced.” Sherlok evaluates all existing clients and identifies those most at risk of leaving.
Once the broker approves these clients for repricing, Sherlok proactively completes the repricing directly with the lender on the broker’s behalf. While brokers may need some training to get comfortable with inviting clients to open banking and trusting AI to make escalation decisions, the technology can make accurate decisions much faster than a human. Brokers should view Sherlok as their co-pilot, allowing them to focus on building relationships and engaging in the more rewarding aspects of their work.
Sherlok proactively completes the reprice directly with the lender on behalf of the broker
Q. How can this help reduce the likelihood of churn?
Churn can be controllable or uncontrollable. Controllable churn, such as refinancing, occurs when a broker could have influenced the outcome. If a client refinances through another channel, it’s often due to a gap in the relationship or a missed opportunity, like when a fixed rate ends.
Uncontrollable events, like divorce or property sales, are harder for brokers to influence. Our focus is on the controllables—timing is crucial. During a five-year period, clients are likely to consider refinancing, and brokers need to be ready to offer solutions at that moment. Our advanced AI and ML predict churn, ensuring brokers engage clients at the right time to increase retention.
