How to get paid the same amount for doing less work

Brokers across the country are feeling the push of digital technology after the emergence of so-called disruptors threatened to change the nature of lending forever. But, according to former broker and founder of SHERLOK, Adam Grocke, the future of broking is looking bright.

“I’m super excited about what technology is going to do for brokers and how it’s going to completely change what a broker is today,” he told MPA.

He said that in five to seven years’ time, the role of brokers will have changed from being advisors and processing houses to exclusively being advisors – meaning less work per client for the same pay.

“I think commissions will stay as they are for the foreseeable future, but the time for an application will be cut by half over the next two to three years and by 80% over the next five years – for the brokers that adopt technology,” he said. “Everyone’s offshoring loan processing at the moment. That’s just going to be completely digitised. They won’t even need PAs or offshore assistants.”

While several direct-to-consumer digital home loan channels have emerged recently, Grocke believes the value proposition of brokers will only grow as the digitisation of lending continues.

Read more: Industry responds to Aussie direct to consumer offering

“There’s going to be a lot more complexity that will come into lending, and higher complexity means the broker’s value proposition increases,” he said. “Brokers are going to be in more demand in the future, but what they’re going to be doing is providing much deeper advice and that’s where I think it’s going to change. They will be true advisors and then all the technology is just automating the processing and everything that happens in the background.”

Grocke has been playing his part in this transformation with the launch of SHERLOK, an AI engine that cuts out all the grunt from the repricing process.

Currently across 38 lenders, the software uses screen scraping to generate an automated list of repricing opportunities for a broker.

“It takes about five minutes for a broker to sign up and connect their data,” Grocke explained.

The engine then looks at 150 data points to build a retention score for each loan in the broker’s CRM.

“That actually predicts how likely it is that a person is going to leave the broker in the next six months,” he said. “The higher the score, the higher the likelihood of that person leaving.”

This then generates a priority list of the loans the engine should focus on repricing.

“Then it simply provides the brokers with a list of clients that should be repriced, going by the highest rating first,” he said. “It chews that up every week and the broker just goes in and clicks a button and that pushes it straight through the repricing process. When it comes back from the lender, whether it be a successful or a declined repricing, then the broker’s got the decision to allow the engine to automatically run a comparison and see what else is in the market for that loan profile.”

The process also generates broker-branded communication with the client.

“It sends out an SMS and email that says, you’re a valued client, we’re always keeping an eye on what’s happening in the market. We’ve repriced your interest rate with the same lender, you’ve now got a cheaper rate that’s now saving you x amount a year, however, we’ve also noticed you can save another $2000 a year by refinancing. Here’s the lowest fixed and variable,” said Grocke. “It entices that homeowner to click a button that will notify the broker there is a lead and that they need to call that client.

“We’ve tried to automate as much as possible, so really from a broker’s perspective they’ve just got two clicks to do. They click one button to approve the reprice as they get geared up and then they just click a button to run a comparison.

“The broker really looks like the hero while the tech’s doing all the hard work.”

Read next: Unconditional approval in a matter of minutes

At the moment, SHERLOK is working on a single-click refinance and instant credit decisioning process that it hopes to make available early next year.

“The idea is how can we instant refinance a residential mortgage,” he said. “At the moment our engine is already creating that refinancing conversation for the brokers. Next, we’re going to start automating a lot of that updating of the data.”

Kate McIntyre is an online writer for Mortgage Professional Australia. She has a wealth of experience as a storyteller and journalist for a range of leading media outlets, particularly in real estate, property investing and finance. She loves uncovering the heart behind every story and aims to inspire others through the artful simplicity of well-written words.
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