A "mortgage retention score" grades clients on how likely they are to move on to a new institution
One of the most effective methods lenders have for improving the performance of their portfolios is retaining the clients they already have. It sounds simple enough; but if it were, lenders wouldn’t be experiencing the level of churn and mid-term attrition they are currently struggling to avoid.
A crystal ball that anticipates the needs of consumers before they reach a certain stage in their homeownership journeys may not exist, but today’s tech-driven mortgage industry generates the next best thing every day: reams and reams of data.
That’s the thinking behind a new partnership between TransUnion and Senso.ai. By combining TransUnion’s ocean of consumer data with Senso’s artificial intelligence-powered solutions, the two companies recently launched the Senso Mortgage Retention Score, a new tool available to TransUnion customers in Canada.
Simply put, the score identifies, on a five-level scale, which of a lender’s borrowers are most in need of immediate attention (and, consequently, most likely to shop for a new lender), allowing them to proactively put offers in front of them and retain those borrowers as clients.
“Typically, Canadian lenders have done a fantastic job around creating contact strategies for the early renewal window,” about four to six months before a mortgage term ends, says Senso.ai CEO Saroop Bharwani. “But anything before that four to six months leading up to term is sort of like finding a needle in a haystack”
“The cost to originate mortgages, particularly in a competitive environment, is really high,” adds TransUnion’s vice president of solutions, Paul Sy. “So, from a lender’s perspective, it’s in their best interest to identify the right customers, rep the right products, and rate the services and terms around them to make sure they’re able to retain that mortgage.”
Rather than waiting and playing catch-up with a borrower who may have already caught a glimpse of greener pastures, Senso’s tech allows lenders to meet consumer needs before they materialize, a talent even the best contact centre can’t lay claim to.
“There’s only so many people that an internal banking team that contacts customers can essentially reach at any given time,” Bharwani says. He describes the Mortgage Retention Score as a prioritization of who needs service at any given time based on a client’s individual needs. Rather than allowing (forcing?) these borrowers to do their own leg work for a refi or purchase, the score tells lenders which clients may be open to signing up for new products and services – and even what those products should be – creating a situation where lenders can better allocate their budgets and time to reach consumers who are likely to need assistance.
What lenders do with the information generated is entirely up to them. Some may choose to follow the data and allow the company’s AI-driven modelling to make their decisions for them in the form of automatically generated offers. Others may want to evaluate the data and make the call on what gets offered to clients themselves.
“Every lender will have different strategies,” Sy says. “Some lenders may take a more insights-driven approach to it while some may balance more the art and science of it. All we can do is give them better data to make those types of decisions.”
