"We see the natural next step for AI in the mortgage process is to automate and simplify the manual and time-consuming processes of cross-validating information."
It is often said that there are two sides to every story and this is certainly true when it comes to AI and the mortgage industry. Those in favour advocate loudly for AI’s efficiency benefits, the potential for a smoother customer experience, and faster decisions from lenders. Those against cite scepticism of implementing brand new processes, the loss of a personal touch, and perhaps more personally, the risk of job losses from automation.
As a strong advocate for AI in the mortgage industry, I have often heard brokers express these concerns. My answer is let’s first look at how some earlier fintech innovations played out. And then draw conclusions on the most likely path for AI in mortgages.
Credit scoring is now a great example of an innovation that at first seemed like deskilling the expert judgement of local bank managers. But the result is faster decisions, more consistency, and the elimination of non-compliant or discriminatory decisions. And from consumers’ perspectives, borrowing became easier, cheaper, more predictable, and with many more options.
More recent fintech solutions such as identity verification (using customers’ own phones to scan ID documents and conduct video liveness checks), open banking (to check their financial position and confirm control over bank accounts) and automated anti-money laundering checks (AML) all contribute to increased automation of processes that previously were fragmented and took considerable time in the mortgage advisory process.
We see the natural next step for AI in the mortgage process is to automate and simplify the manual and time-consuming processes of cross-validating information. For instance, payslip verification, reviewing bank statements, calculating affordability and doing salary and employer checks. Today many of these are generally managed manually or with just basic workflow support in CRM systems.
AI can help by quickly ingesting these customer documents and conducting automated checks to help create significant time savings and improve the customer experience. Customers get instant updates as soon as they submit their documents, so they immediately know if what they have supplied is correct.
So what will this mean for the role of the AI-assisted broker?
Firstly, AI will not replace the role of the broker. Rather it will help brokers work smarter, reduce the risk of human errors, and give them more time to handle complex cases and understand customers’ real needs. Real-time insights into customers’ preferences and behaviours can help brokers identify potential leads and maximise sales opportunities. AI processes also support brokers on the regulatory compliance side too, with Consumer Duty and vulnerable customer obligations met in a systematic and auditable way.
Secondly, current mortgage business processes will evolve to automate progressively more routine administrative tasks. AI is certainly not a silver bullet. But as the technology matures, the mortgage industry will quickly figure out the best way to leverage these new capabilities. Sikoia is working closely with a number of leading mortgage origination platforms to make AI-powered processes a fully integrated part of brokers’ existing workflows. This will make it easy to adopt best practices and let brokers benefit with no technology investment on their side.
While there will inevitably be some level of concern about how far AI can go, the fact is that this type of technology should be viewed as an enabler to the mortgage process, not a threat. Brokers will always be needed and skilled elements of the mortgage process such as underwriting complex cases will always require a human touch.
