Artificial intelligence (AI) can help streamline certain parts of the mortgage process but there is still uncertainty as to whether it will lead to more broker consolidation.
Speaking at The Specialist Lending Event, Jack Rogers, founder of Keychain, said that AI was “really good at some things and really not good at other things”.
He said it was good for repetitive tasks, such as checking documents, flagging transactions on bank statements and whether documents were within the required timeframe, but it was not great at having conversations.
“I still think customers won’t be as keen on interacting completely with an AI agent, and I think we’ve seen that play out over different technology cycles.
“For something as big as a property transaction, I can’t see that there’s not going to be an adviser in the loop,” Rogers noted.
He continued that there were also concerns from a regulation perspective as more complex cases with vulnerable customers need a “human in the loop” and “need more explaining”.
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“The regulator will never be happy with that [complex process] completely being handled by an AI company or some AI technology.
“I think there’s minimal risk of that whole advice process being taken over but there are definitely some tasks, particularly more on the admin side, that the AI is already good at and a lot of advisers are already utilising those tools.”
Ben Nadel, co-founder of Woodhurst, said AI could possibly help in the initial triage stage, which could allow for more “quality conversations with the human adviser”.
“In mortgages in particular, AI is definitely starting to move things forward, but again, it will take time to permeate through the industry,” he explained.
Nadel said there were a few lenders at the moment experimenting with an AI-powered broker portal, so once the broker enters the borrower’s name, it will connect to a database and then change the fields automatically, which the broker can then augment.
He noted that in theory this should limit rekeying and mean the exact information or documents are asked for to limit back and forth.
Nadel explained that AI will only be as good as the data it can pull, and potentially where people may get “frustrated” is if the data being pulled “brings out the wrong result” and then they have to speak to someone and go through a more “manual experience”.
Matt Mawdesley, CEO and co-founder of Morpheus Lending, said he believed the “hype” around AI was real but “how quickly it gets into our market is to be decided”.
He agreed that AI’s usefulness is dependent on “really good data”, and this may not be the case for some lenders who may not have great data warehousing and clean levels of data.
He continued: “That being said, I think from to the basic tasks it’s going to work really well. We will probably get to, I suspect, within a month or two, is a broker can go from one meeting to another they can do a voice note on Whatsapp and by the time they hit the office they’ve pre-populated a case, and they’ve probably got an initial set of terms without any human ever touching it.
“I would still always have a human looking at the underwrite, but I would like them to be looking at 10 or 15 minutes of work when it’s needed, not the full hour or two hours it needs to underwrite the case.
“It’s very much there. I think the data is there for us to start using… it’s about picking the right things at the right time and making that journey really easy.”
Mawdesley said AI was the “closest thing” the mortgage market has to start “amalgamating all these different platforms” but “we’re just not there yet”.
“If you’re not talking about AI internally, you’re not talking about that level of technology, then start getting up to speed because I think sooner rather than later, it’s going to be here en masse,” he said.
Is broker consolidation on the cards with the rise in AI?
Some panellists disagreed on whether increased use of AI and other technology would lead to broker consolidation and fewer advisers in the market.
Rogers said in terms of the number of advisers, he expected it to grow as the “need for personalised advice is increasing in the UK rather than decreasing”, especially as individual borrower circumstances become more complex.
“Over the next few years, we will see shifts in terms of kind of how people are employed, potentially on the admin side, in terms of not necessarily those jobs being cut down, but what those jobs look like, and the type of tasks that those jobs are doing. They may be doing more of the business development or client relationship building,” he noted.
Mawdesley said he didn’t think broker jobs were at risk now but they “will be in the medium term”.
“I think the brokers that embrace new technology will win. But when new technology comes into a market probably, I think the number of brokers will reduce, primarily because if brokers can do two, three or four times as many deals with the same amount of lifting power, then the number of those smaller broker starts contracting.
“Any new sort of broad technology… when it comes into a market causes consolidation,” he explained.
Mawdesley said brokers who are “starting to look at that technology now” will “drive better margin, drive a USP and it will drive a better customer focus”.
“I think now is the time to jump in and get involved. But in the short term, I don’t see the number of advisers massively moving. I think AI will work on some of that admin and therefore you’ll have to hire [fewer] people to help you do that but that human element will always be there.
“But if you can do two, three or four times as many deals with a certain number of staff, because you’re leveraging technology, you will win in this market. You will get better margins, and you will get better customer outcomes as well. So, I think we will see some contraction, but it will be those who don’t invest in technology,” he explained.
The Specialist Lending Event continues around the country and will take place in Aston Villa and East Sussex this week.
