Since the onset of digital mortgage brokers in 2015, the mortgage landscape has become increasingly reliant on technology. Artificial intelligence (AI) is the most recent innovation to be embraced by the industry, but is it capable of replacing traditional mortgage brokers?
The end of human mortgage advice?
Recent Financial Conduct Authority (FCA) data highlights that 75% of financial services firms currently use AI, with a further 10% planning to adopt it within the next three years. In fact, the FCA has been keen to support implementation, creating guidelines to ensure best practice is adhered to while using AI within the mortgage industry.
We’ve also seen a handful of fintech companies offering ‘digital mortgages’ in recent years, although in reality, they all operate some degree of hybrid operation. This typically includes digital platforms with an increasing number of AI elements, but ultimately, still has some human interaction from qualified mortgage brokers. This suggests that while the industry is adapting, human mortgage advice remains key to a successful brokerage.
How are automation and AI tools being well-utilised in the industry?
Those mortgage firms utilising AI tools well within the industry are predominantly doing so with automation. This aids in tasks like information gathering and verification, as well as mining collected data. Automation saves substantial time wasted on repetitive tasks, and allows brokers to quickly filter out clients they’re unable to serve.
Crawling lender criteria to match client circumstances more quickly is another beneficial use. Although a pitfall here could be crawling outdated lender pages, so it’s important to ensure human checks support this function, especially where there are niche requirements.
Other areas where AI can be useful in all businesses, but are also being adapted to the mortgage industry, are in cybersecurity and fraud detection, as well as maintaining predominantly data-led web content, such as rates tables, and industry statistics.
Why human brokers are still necessary
There are several reasons that human mortgage brokers are still vital to the industry. Firstly, the sheer complexity of the mortgage industry and applicant circumstances. While AI can match data clients input into application forms with suitable lenders, it can’t necessarily provide advice about tweaking applications, or ask the questions that may have been sidestepped in an automated form.
Secondly, attributes not yet replicated convincingly by AI, such as trust, empathy, and understanding. While AI is gaining credence, most clients are more comfortable being reassured by another person with expertise and experience. Especially when deciding on what’s likely the biggest financial commitment they will ever make.
Last, but by no means least, flexibility. Not all lenders have their criteria and rates set in stone, and AI relies on set data to operate. Particularly in more commercial mortgage transactions, there are still elements of negotiation and decision-making that require human intuition.
Kellie Steed - Content Writer
Conclusion
Although it’s unlikely that Artificial Intelligence will fully replace human mortgage advice any time soon, those brokers who entirely reject the concept of its use may struggle to compete within the industry for too long. Firms using AI to automate certain processes can serve many more clients per day compared to traditional brokers, based purely on the speed at which they’re able to turn around applications.
When considered alongside the fact that for younger generations. technology-led solutions to financial products are already their ‘normal’, it’s easy to imagine that a swift, minimal contact approach to organising mortgages will be strongly preferred in the future, as it often is now.
However, as outlined above, while ‘vanilla’ mortgage applications have the potential to be entirely automated and AI-led at some point, specialist mortgage transactions are likely to be supported by humans for years to come. There are simply too many potential borrower circumstances for every scenario and resolution to be pre-programmed. At least for the time being, a hybrid approach to mortgage broker services seems to be the optimum solution for longevity and success.
