CVM: Three letters that could cost you your client bank – Flavin

11pm on a Tuesday night. A 52-year-old man is sitting on his sofa with his phone.

His bank has sent him a message. It’s noticed his current account balance has dropped below its usual level three months running. It’s noticed his mortgage payment now takes up more of his income than it did. He hasn’t missed anything. He hasn’t rung anyone. He hasn’t told a soul that things have got tight.

The message offers to extend his mortgage term. The new payment is already modelled. It’s £180 per month lower.

Four clicks and it’s done; nine years added to a mortgage that now runs past his 68th birthday. No conversation about retirement income. No protection review. No suitability letter. Nobody asked him why the money got tight — which, had anyone bothered, would have turned up a £14,000 credit card that was the actual problem.

He was your client. You placed that mortgage in 2024. You’d have handled it properly. You didn’t know it was happening.

That’s not a prediction. McKinsey published the blueprint for it and gave it a name so dull you’d walk straight past it: customer value management (CVM).

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Three letters that sound like a middle-management department. It’s the most serious commercial threat to the mortgage intermediary in 20 years and this industry isn’t discussing it at all.

 

Two more, before you decide it’s overstated

The one you’d have earned a fee on: A payment to a local architect, then a planning application fee to the council. The engine works out she’s extending the house and offers a further advance on her existing mortgage before she’s finished getting quotes. She wasn’t shopping for finance yet. She is now, and there’s only one lender in the room.

You were never in that conversation. It happened between a card transaction and a notification.

The one that should really worry you: A nursery direct debit stops. A salary goes up. A savings balance climbs for 11 months and then plateaus. The engine reads that as a family getting ready to move and starts a sequence — affordability, agreement in principle, here’s your budget — nine months before they’ve spoken to an estate agent, never mind a broker. By the time your introducer would normally have sent them over, they’ve already been told what they can borrow by someone they already bank with.

The bank isn’t waiting for the client to enter the market. It’s identifying them before they know they’re in it.

Every high street lender already holds the data to run all three of those. What they’ve lacked is the machinery.

 

That’s what’s being built now

Hundreds of triggers at once. A balance that dips three months running. A salary that jumps. A form somebody abandoned halfway. At full automation, the engine reaches 80-100% of customers, across every product, 3-5 times per week. New campaign live in two days. Every message is written by artificial intelligence (AI) and tested forever.

They know 3-5 is safe because opt-outs don’t start until about one per day. So those three scenarios aren’t a queue. They’re happening at the same time, to different clients, every week – while you’re on your fourth case of the day.

And the reason is simple. Banks have spent around $600bn per year on technology and gone backwards. The average European customer now banks with 2.6 institutions, up from two in 2021, and half of them hold exactly one product with any given bank. So 69% now say their priority is organic growth through better development of existing customers.

Translated: we’ve already got these people. We just need to sell them more.

 

The line that matters most

There’s one sentence in that report every broker in the country should read.

McKinsey found that a digital-first sales approach significantly boosts sales across most retail banking products — with mortgages as the only notable exception.

Read it twice, because it cuts both ways.

The mortgage is the one product digital hasn’t cracked: too complicated, too emotional, too much money. People want a human being when they’re borrowing £300,000, and no amount of hyperpersonalisation has changed that yet.

But the only notable exception isn’t a permanent condition. It’s an open item on somebody’s roadmap, and a very large number of extremely well-funded people are working on closing it.

 

What happens in the meantime

Banks won’t beat you on advice. They won’t have the term extension conversation properly. They won’t ask why the money got tight. They won’t find the credit card.

They don’t need to beat you on advice.

They’ll get to your client first, more often, with something useful, until you’re the person she’d have to make an effort to remember. You won’t lose her in a competitive process. You’ll lose her the way you’re already losing half of them: quietly, to convenience, while you were busy.

 

So what?

You’re not going to out-technology a bank, so stop thinking about it.

The engine sees what your client spent. It doesn’t see what she’s worried about. It doesn’t know her mum’s not well and they’re thinking about moving closer. It doesn’t know his business is worth more than the accounts say. It can’t know, because none of that goes through a card reader.

That’s the gap. It’s a good one. But it only exists if someone’s actually asking – and in most firms, nobody is, because the annual review is a rate reminder with a nicer name.

Here’s what actually bothers me about all this: a regulated piece of advice happened on a sofa at 11pm at night, and the only party in the room was the one selling.

We spent 20 years arguing that’s why brokers exist. Now would be a good time to prove it.