Effective repricing can reduce client churn, according to new report
Fintech Sherlok has released a new report on home loan pricing and its impact on customer retention and broker revenue, revealing that effective repricing action can markedly diminish client turnover.
The report found that client churn reduced by 32% when brokers proactively repriced clients to lower interest rates with the same lender.
“This can add an additional $50,816 of revenue p.a. per broker generated from retaining trail commission and generating new upfront revenue by refinancing clients when a reprice has been unsuccessful but better rates exist in the market,” the report said.
Furthermore, Sherlok recorded an average rate reduction of 0.46%, resulting in over $77 million in annual savings for Australian homeowners.
Founder and CEO Adam Grocke (pictured left) said these findings are evidence of the “tangible benefits of proactive repricing.”
“Whilst traditionally refinancing was seen as the only path to competitive rates, our data and efforts aim to show that repricing with an existing lender can be equally effective in fostering competition and retention,” said Grocke.
“Keeping clients on competitive interest rates emerges as the most critical factor in reducing churn. From my experience as a broker, I've seen how post-settlement, the interest rate becomes a pivotal concern for clients, influencing their decision to stay or seek refinancing.”
The report also introduced the Sherlok Loyalty Index, which was designed to assess lenders’ commitment to offering competitive interest rates to existing customers. A lower index score shows that a lender is more willing to look after their existing customers by providing a competitive interest rate post settlement.
Lenders with scores under Sherlok’s industry benchmark of 7.34 include Macquarie Bank (3.21), Suncorp (5.33), Commonwealth Bank (5.64), AMP Bank (5.88), ING (7.13) and St. George Bank (7.33).
Commenting on the report, CTO Nik Pinchuk spoke about the significance of the Sherlok Loyalty Index, as well as the company’s AI-driven repricing solutions.
“Our data underscores the importance of offering attractive rates for enhancing client loyalty and ensuring brokers' sustained success,” he said.
Peter White (pictured right), CEO of the Finance Brokers Association of Australia (FBAA), also praised the report’s timing and insights.
“This report comes at a critical time for the mortgage broking industry,” he said. “The data-driven strategies outlined provide invaluable guidance for brokers seeking to enhance client retention and drive sustainable growth.”
Anya Pannek, CEO of the Mortgage & Finance Association of Australia, made a similar comment, stating that the report’s findings “offer valuable insights for brokers and lenders alike.”
