Sherlok raises $3.4m to launch single-click refinancing

Currently, Sherlok’s AI engine assesses a consumer’s financial data (including open banking data through its partnership with Adatree) to identify whether they can access a better rate. It enables brokers to automatically reduce customers’ interest rates by repricing with their current lender.

As well as saving borrowers money, this also adds value and efficiencies to the broker proposition by reducing the risk of run-off.

Following the successful funding round, it is now working on building out the platform’s capability to allow brokers to refinance their clients through a single-click refinancing tool.

Speaking to The Adviser, Adam Grocke commented: “We’re at a really interesting inflection point in the mortgage industry and I think there’s an opportunity to be first mover in doing this, and this opportunity won’t exist again in two or three years’ time.

“The quality of open banking data and data sharing is at a point where it’s usable and there is now the capability of technology — and the demand from consumers and brokers — for a much faster, digital way of processing a refinance.

“The new capital allows us to further improve our current platform and build out really cool functionality for brokers, but — more importantly — push us into the next stage, which is helping brokers with digital refinancing and instant credit decisioning.”

According to Mr Grocke, the refinancing process will enable brokers to spend no more than 10 minutes on the refinance and doesn’t require any additional documentation.

It is expected that the tool, which is currently being built and tested, will be rolled out to brokers (whose aggregators have agreed to use the digital refinance) around September 2023.

As such, while brokers will be able to see repricing opportunities for all lenders available to them, they will also be able to push through deals through single-click refinancing to participating lenders later this year.

Several lenders are understood to have already agreed to participate in Sherlok’s single-click refinancing.

Speaking of the capital raise, Taryn Pieterse, principal at Rampersand VC, said: “Property ownership is central to the Australian economy and culture and, in a rising interest rate environment, Sherlok has built the platform that swings things back in the home owner’s favour using advanced technology and AI models.

“We were impressed by Sherlok’s strong vision as a category creator and their ability to deliver on strategic milestones with a small team. Before founding Sherlok, Adam was an award-winning broker for over a decade and that insider knowledge shines through in their product.

“This technology is built for brokers, by brokers, with a deep understanding of retention strategy and the single-click refinancing solution represents a major step forward.”

According to Sherlok, the fintech has seen 700 per cent user growth in the past year as rates have increased. Indeed, it recently found that the average length of a loan is now just 37 months, as more brokers and borrowers work to take advantage of competition in market and refinance.

[Related: Average loan life now around 3 years: Sherlok]