"Thanks to the FCA’s dogged determination to make Consumer Duty its flagship regulation rather than a TCF enhancement, companies have been forced to up their risk and compliance game."
For mortgage brokers the squeeze is real. With increased compliance and a challenged interest rate and housing market, brokers’ margins are getting tighter and the need to maximise client service whilst also ensuring efficiency is being felt more than ever.
A slew of manual processes clogging up the financial advice machine is not helping. Advisers scribbling notes, taking voice notes, or memorising the key points of meetings to be typed and keyed into CRM systems later are not efficient. On the occasions that advisers do record their calls, there hasn’t been a good way of extracting information from them. Until now.
Generative AI will remove the admin burden, or at least significantly reduce it for advisers. The technology has gone from being relatively niche, to being used as a ‘copilot’ for humans in the last 18 months. It sits on client calls, automatically records, transcribes and extracts all the relevant information an adviser needs to auto-administer their CRM, draft a post-call client email or meeting brief and even create a personalised suitability report. It really does boost productivity but essentially leaves brokers responsible for their output. The next step in this evolution is to become ‘AI first’, when we trust the technology enough to fully automate existing processes and that’s where truly game-changing productivity will be achieved.
As well as real-time case checking, risk and compliance continues to be a major focus. Thanks to the FCA’s dogged determination to make Consumer Duty its flagship regulation rather than a TCF enhancement, companies have been forced to up their risk and compliance game. Many small advisory firms that sell-up or leave the market often cite the cost of compliance and ever-increasing regulatory burden as a key factor. Generative AI has the opportunity to turn this on its head. With companies required to measure, record, analyse and report on much more data than before the only economically feasible way this can happen is if companies use technology to do this.
However, there are areas to be aware of. The data that generic GenAI chatbots have currently been trained on is pretty much the internet in all its biased and inaccurate glory. A more established focus on vertical AI with specially-developed GenAI solutions designed for financial services, mortgage and protection has the potential to be a game changer for the brokerage market. Utilising financial advice specific data, and having financial industry regulations and guardrails built into AI platforms will offer solutions that are accurate, powerful, transparent and ethical. This will be transformative.
This perfect storm of GenAI innovation, coupled with regulatory pressures, market dynamics, and a drive for cost efficiency, sets the stage for an accelerated adoption of AI within the financial advice sector. Investment in technology has the potential to reap significant rewards and ensure that the independent mortgage broker still remains the face of the industry and not overtaken by the bigger banks or lenders.
