In this week’s episode of The Mortgage Broker Broadcast, I’m digging into a topic that’s starting to really bite in the UK mortgage world:
👉 How lenders are using AI to retain their existing customers — and what that means if your business is built on product transfers.
This follows on from:
- My recent chat with Iftikhar Mohammed about AI in the mortgage broker world
- The episode on the FCA’s advice trigger rule change and execution-only
Put bluntly:
Lenders are pouring money into AI and digital journeys to keep hold of their customers. If a big chunk of your income comes from product transfers (PTs), you need to understand what’s happening and how to respond.
Why Lender Retention Is Suddenly a Big Deal
The product transfer market in the UK is enormous.
- Over 2 million mortgages came to the end of their deal this year
- The vast majority of mortgages are fixed rate
- Over the next 12 months, millions of borrowers will need a new deal
At the same time:
- Purchase transactions have slowed down
- Buy-to-let lending has dipped in places
- Lenders are under pressure to protect margin and volumes
So what do they do?
They double down on keeping the customers they’ve already got.
A few years ago, product transfers looked very different:
- Brokers often didn’t get paid for helping clients switch rates
- That changed with the introduction of proc fees for PTs
- Now most mainstream lenders pay brokers on retention — but less than half of PTs go through intermediaries
Many borrowers just log in, click a button, and switch online without advice.
Some lenders pay the same proc fee for a PT as for new business. Others don’t. And there’s an ongoing debate about how big the broker slice of the PT market will be in future.
How Lenders Got Here: From Early Digital PTs to AI Engines
Back in 2018, several UK banks were already building self-service retention systems:
- Clients received an email or letter before their deal expired
- They could log in, see a list of retention deals, and switch in minutes
- At that time, around 45% of product transfers were execution-only
Since then, things have moved on massively.
Lenders have invested in:
- Cloud-based mortgage platforms
- AI decision engines
- Data-driven pricing and servicing
Today, some lenders can:
- Let existing customers log into online banking or a mobile app
- Present personalized retention offers
- Run internal affordability and eligibility checks in the background
- Generate a new product confirmation and payment schedule
- Complete the whole thing without human involvement
Add to that the fact that high street giants like HSBC, Lloyds, NatWest and challenger banks like Starling, Tandem are committing serious money to AI and digital infrastructure — and you can see where this is going.
They’re not just tinkering.
They’re building end-to-end AI-powered retention journeys.
What AI-Powered Retention Actually Looks Like
Think of lender retention AI as a mix of:
- Data analytics
- Machine learning
- Automated marketing
Here’s what’s happening behind the scenes:
- Systems monitor payment history, balances, LTV changes and behaviour
- They spot when a deal is coming up for renewal
- They see when market conditions might justify an early switch
- They trigger emails, texts or push notifications with pre-populated offers
Messages can be:
- Simple reminders: “Your fixed rate ends in 3 months.”
- Fully personalised: based on LTV, risk profile, income, segment (first-time buyer, landlord, high-net-worth etc.)
- Targeted: identifying at-risk customers who might jump to a competitor
And crucially, it’s not all about cutting the rate.
Lenders are increasingly focused on:
- Keeping margins sustainable
- Making the process effortless
- Communicating clearly and early
- Highlighting why staying might be convenient and sensible
If a client can tap a notification, review a rate, and accept the new deal in 60 seconds, a lot of them will.
Why This Is a Problem If You Rely on Product Transfers
If your business model is heavily dependent on PTs, this is where it gets uncomfortable.
Lenders are now:
- Doing the tracking (when deals end)
- Doing the predicting (when clients might want to switch)
- Doing the communication (emails, texts, app notifications)
- Doing the execution (digital journeys with pre-populated details)
By the time you think, “I must ring that client, their deal’s due,” they’ve already had an email, a text and an in-app prompt from their lender.
From the client’s point of view:
- It’s fast
- It’s simple
- It feels “good enough”
So they may not see the need to contact you.
Add these two extra factors:
- Retention proc fees are often lower than new business
- The FCA has removed the automatic advice trigger after interactive dialogue
Put together, you’ve got:
- Lenders building slick AI retention engines
- Clients able to proceed execution-only more easily
- A potential squeeze on broker income, especially if you’re mostly doing PTs
It’s not hard to see why some people think the broker sector could be challenged in this space.
Why Brokers Still Matter (A Lot)
Here’s the flip side.
Even with all this tech, human advice is still critical, especially in situations like:
- Capital raising
- Debt consolidation
- Changing the term
- Complex income or self-employed
- Borrowing into retirement
- Portfolio and tax planning for landlords
And under Consumer Duty, lenders must:
- Identify customers who could suffer foreseeable harm from going execution-only
- Offer advice or support where needed
We also know this:
- The most creditworthy borrowers with the best affordability often shop around
- Many clients with multiple products with their current bank still move their mortgage
So relationship depth alone doesn’t guarantee retention for lenders.
Clients still care about:
- Getting the best overall outcome
- Having someone explain the implications
- Making sure the mortgage fits their long-term plans
That’s where you come in.
AI can automate tasks.
It can’t replace trust, empathy or strategic thinking.
How Brokers Can Stay Ahead in an AI-Retention World
This isn’t a “give up and go home” moment. It’s a “level up” moment.
Here’s what you can do.
1. Use AI Yourself
You don’t need a bank-sized budget to use:
- Predictive analytics
- Automated reminders
- Trigger-based messaging
Most decent CRMs will help you:
- Track fixed-rate end dates
- Log life events
- Set reminders for reviews
- Segment clients properly
Use this to contact your clients before the lender does.
2. Deepen Relationships – Don’t Just Pop Up at Renewal
If the only time clients hear from you is when their deal ends, you’re vulnerable.
Do things like:
- Annual or bi-annual mortgage reviews
- Regular emails about rate changes and market shifts
- Updates on protection, later life lending, BTL strategy
The goal is simple:
Make yourself their go-to financial guide, not just “the person who sorted our last deal.”
3. Educate Clients: Advice vs Information
You need to make this crystal clear:
- An execution-only PT may be quick, but it puts the responsibility on them
- You consider their future plans, risks and bigger picture, not just today’s rate
When clients truly understand the difference between “clicking a button” and “receiving full advice”, they’re far more likely to choose you.
4. Diversify Your Income
If 70–80% of your income is PTs, you’re exposed.
Look at adding or expanding:
- Complex / specialist cases
- Self-employed
- Adverse credit
- Later life lending / equity release
- Protection
- Estate planning
- Full financial advice (or partnerships)
These niches are far harder to replace with automation.
5. Match Lender Convenience
You can’t be “the fax machine broker” in a TikTok world.
Offer:
- Online fact finds
- E-signature documents
- Digital document upload
- Video meetings
- WhatsApp / secure messaging (where compliant)
If a lender can deliver speed plus convenience, and you can deliver speed, convenience and advice, you win.
6. Watch What Lenders Are Doing
Pay attention to:
- When lenders send out PT offers
- What their journeys look like
- How far in advance they contact clients
If they contact at 3 months, you contact at 6 months.
If they send one email, you deliver ongoing communication and added value.
7. Lean Into Consumer Duty
Consumer Duty is not just a compliance headache; it’s a positioning tool.
You can confidently say:
- “My job is to make sure your mortgage is suitable.”
- “I’ll explain the risks and long-term impact, not just the headline rate.”
That’s a completely different proposition to a one-click online PT.
8. Review Your Business Model Now
The pace of change isn’t slowing.
Use this quarter to review:
- Revenue split (new business vs PT vs other services)
- Client communication frequency and quality
- Your tech stack (CRM, automations, AI helpers)
- How you segment and prioritise your client bank
Small changes now can protect a lot of income later.
Looking Ahead: The Game Is Changing, But So Is the Opportunity
By the end of next year, most major lenders will have AI-powered retention engines embedded into their systems.
We may see:
- Dynamic pricing on retention that reacts in real time
- AI agents collecting documents and running valuations
- Fully automated back-office processes from trigger to offer
At the same time, regulators will continue to:
- Scrutinise how firms use data
- Push for transparency, fairness and suitable outcomes
The brokers who will thrive are the ones who:
- Embrace tech instead of fearing it
- Focus on service, advice and relationships
- Diversify beyond simple PTs
- Stay proactive rather than reactive