The mortgage technology provider has leveraged open banking data, which will power its one-click refinance tool to be launched later this year.
Sherlok has become the country’s first representative under the new Consumer Data Right (CDR) primary access model – securing a path to open banking data through its partnership with data intermediary and fintech Adatree.
The access model is a recent amendment to the CDR legislation, allowing unlimited data recipients, such as Adatree, to act as principals to other companies wishing to access the data.
As part of the partnership, Sherlok, which offers an automated repricing and refinancing tool for mortgage brokers that monitors approximately 35,000 home loans, will receive real-time data.
Managing Director and Founder of Sherlok, Adam Grocke, told The Adviser that leveraging live data will allow the system to offer brokers live information on product pricing and customer data, promising to improve results and customer loyalty.
“That means we can 24/7 monitor their interest rate, we can look for patterns in that consumer’s data to better predict if they’re going to leave,” Grocke explained. .
Access to open banking data underpins a new one-click refinance offering from Sherlok, which is expected to launch in the second half of the year.
The product will be tested with brokers before being rolled out to the market, Mr Grocke told The Adviser. The company is currently working with lenders on the product.
Sherlok aims to reduce refinancing time from weeks to minutes, through the use of data, analytics and artificial intelligence.
Mr Grocke believes the tool will “reshape the industry”.
“At the moment, to come to a credit decision, it can take up to three weeks, on average, for lenders to get unconditional approval. What we’re going to do is work to bring that back to a decision. instant credit,” he said.
“It will be an instant credit decision, which will mark it as approved unconditionally for the broker, for the client, as soon as they click on the button, which is to change lenders and then they can choose their settlement date. afterwards.”
By becoming an Adatree representative, Sherlok will also avoid the time, cost and effort required to access CDR data if he had requested his own data recipient credential.
Mr Grocke told The Adviser that the company originally considered the data recipient route 12 months ago when it saw the potential for mortgage brokers to use customer data as part of the CDR program.
“What we saw was that the legislation was constantly changing. So we would need to potentially have an in-house consultant or team that would constantly manage our requirements as an accredited data recipient,” he explained.
“The cost and process to get that data recipient status was actually going to be between $150,000 and $300,000 and it was going to take between six and 12 months to do it.”
Instead, Adatree essentially sponsors Sherlok’s access to CDR, shouldering the costs and compliance obligations — and giving the refinance tool provider access to open banking data within weeks.
“The main benefit for us and other companies looking to do this is that it makes it more accessible,” Mr Grocke said.
“And if it’s more accessible for fintechs to embrace open banking and CDR, consumers will be more likely to consent to their data being shared.”
Jill Berry, CEO and co-founder of Adatree, echoed Mr Grocke, noting that the CDR participation process is “very long and complex”, with “high barriers to entry”.
“Hundreds of companies are registered as interested in becoming data recipients, but have not yet started the process,” Ms Berry said.
Senator Jane Hume, Minister for Pensions, Financial Services and the Digital Economy, also spoke, commenting that the industry has embraced the new primary access model weeks after it was formalized.
“Greater adoption of CDR means better, cheaper and more personalized products and services for consumers and businesses,” she said.
[Related: Broker feedback wanted on ‘complex’ financial services legislation]
Sarah Simpkins is the managing editor of Mortgage Business and The Adviser.
Previously, she reported on banking, financial services and wealth management for InvestorDaily and ifa.