Predicting the future is as easy as looking at the past

Posted by Jennifer McGhee in Lending

Customer attrition models in the Canadian Mortgage Industry have never been as important as they are right now. With today’s market as competitive as it is for new business growth, lenders need to be proactive in identifying those customers who are at risk of switching their mortgage provider.  As a result, customer retention teams need to be more strategic when it comes to targeting retention campaigns.

Can we predict when, and where, lightning will strike?

Understanding the characteristics of the customer, the property and the customer’s mortgage product at the time of their relationship ending with the mortgage provider, can predict a great deal about what is to be expected from the existing customer base in the coming months.

Are you able to identify the characteristics of your liquidated mortgage portfolio? Perhaps you know the following details about the customers who chose to end their relationship with your organization:

• Rate
• Repayment record
• Loan to value
• Customer credit score
• Mortgage balance
• Term
• Originator
• Chequing account provider
• Age
• Employment
• Tenure

All of these characteristics, and others, can help to identify those customers who pose the greatest risk of liquidating from your current mortgage portfolio. Identifying the customers, and understanding how the variations of the critical characteristics affect the liquidation rate of your mortgage portfolio, will help your organization successfully grow your portfolio year after year.

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