New AI loan repricing platform launches

Craggle – a fintech that specialises in “crowd haggling” – has launched a new AI open banking tool to help borrowers negotiate a better rate on their home loans.

The AI open-banking powered tool aims to help borrowers save money on their loan while assisting lenders in retaining more customers by ensuring that they are on a competitive rate.

Co-founded by two former Westpac employees – Luke Oxley (Westpac’s former national head of retail transformation (and a previous state manager for home lending at St.George) and Ben Baume (a former Westpac senior manager for implementation and efficiency) – the tool aims to help lenders retain their customers by offering customers a better rate on their home loans.

Borrowers who sign up and input relevant information are then pooled into tranches of similar loan types. Craggle conducts automated weekly “events” that “lobbies” lenders to present these tranches with pricing offers.

Customers are then presented with their pricing options, which may include a retention offer from their existing lender.

If the customer accepts the retention offer, this is processed immediately. Any refinance offers are handed off to relevant “partners” for execution – including, currently, a small pool of mortgage brokers.

The new AI tool leverages open banking technology to automatically populate cells in loan forms in a bid to remove the back-and-forth communications that can delay the refinancing process.

While the fintech has said it is currently working with a small group of brokers to assist with specific customer scenarios (such as complex deals or commercial loans), there are no plans to broaden this pool at the moment.

Indeed, the co-founders have said that the aim of the platform is to “remove all the friction of refinancing and enacting all the basic tasks of a mortgage broker”.

They added that they will have in place an automated end-to-end loan origination process using AI “by the end of the year”. The AI tech was developed in partnership with developers Hello Again and Emergent Labs AI.

Craggle chief executive officer and co-founder Luke Oxley said the tool was a “first-of-its-kind” in Australia and was “one of the few real-life applications of open banking”.

Speaking to Mortgage Business, Mr Oxley said: “When we were designing Craggle we had two key goals in mind: using the power of the crowd to help customers get a better deal on their loan and helping banks retain their customers.

“To gain traction both with consumers and the banks, we knew that the process had to be incredibly simple with a quick turnaround for the end customer. It’s why we’ve automated as much of it as we can, and now have introduced AI into the mix to further alleviate any pain points with the process.

“Where brokers are valuable in our process is in the human relationship between the bank and their customers.

“There always has been a human element to lending that sometimes gets buried in admin and process.”

He added that the service was launched amid a high refinancing and repricing market – given hundreds of thousands of borrowers are still rolling off their super-low fixed rates from the pandemic and are seeking to find better deals following the fastest rate-hiking cycle on record.

“Many Australians unwittingly end up paying more for their loan than they need to simply because they don’t have the time or the patience to navigate the refinancing process.

“Conversely, banks end up losing because they punish their existing loyal clientele with redundant paperwork, when they already have all the information they need on hand.

“We’re solving for both of these problems, using AI to power a private, secure solution that gives the banks the information they need to navigate the query and also saves time for the customer looking to refinance,” he said.

Since launching last year, Craggle has reportedly facilitated over $354 million worth in loans and has saved Australians an estimated $1.8 million in interest.

[Related: NAB to connect borrowers to home loan bankers in 15 mins]