Target Group has urged lenders to rethink mortgage servicing by reframing it as a “strategic asset for customer retention”, rather than a cost centre.

The software provider made the call to lenders with 1.8 million mortgages due for renewal in 2025.

Speaking at an industry event, Target challenged lenders to look beyond originations as the end point and consider the wider mortgage journey. The firm argued that 90% of the customer relationship happens after the deal is done, making customer-centric servicing “essential” in driving loyalty, retention and long-term profitability.

With customer acquisition costs up to five times higher than retention costs, Target believes that a 5% increase in client retention could boost by profits by more than 25%.

Growth director at Target, Melanie Spencer, said: “With lending targets to hit and tough competition, there’s no question that customer acquisition remains absolutely critical. But lenders must also consider what happens when the ink is dry and the keys are handed over. We have to challenge the mindset that the mortgage journey ends at origination. There is massive untapped potential in mortgage servicing to drive customer retention and profitable growth.

“With high mortgage maturity and high churn, it’s a clear wake-up call for the mortgage market. It requires lenders to re-think their post-origination strategies – moving away from just statements and arrears and focusing on building relationships, earning trust and delivering long-term value. Today, smart servicing leverages emerging technologies to transform the experience into something that is proactive, personal and ultimately profitable.

“To keep seeing servicing as a cost centre is a huge mistake and one that if not corrected will leave lenders lagging behind the competition.”

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