Traditionally, the mortgage industry has been slow to incorporate new technology into the sector, with paper-based and manual processes considered the norm.
An overhaul of established systems and processes can disrupt workflow and be expensive, making the industry cautious when it comes to implementing new solutions.
However, as advanced technologies such as AI become adopted by companies and consumers across the board, it is crucial that this time, the mortgage industry is not left behind.
When it comes to the lending process, not only does AI have the potential to reduce costs, spot inefficiencies and provide brokers more time to advise their clients, but it can also vastly improve the user experience.
I’d like to use this article to highlight how the technology is being utilised by the industry at the moment and what we can expect moving forward.
What is AI and how can it help?
AI can generally be understood as the capability of machines to display attributes that could be considered as intelligence. It encompasses a range of technologies that aim to emulate and even build on human intelligence.
Importantly, AI is able to automate and solve complex issues at pace by imitating, but also executing, cognitive learning processes, problem-solving, critical reasoning, and decision-making.
While the concept of AI is by no means new, generative AI systems like ChatGPT, which drew over a million users after its launch, have brought the discussion about what AI can achieve back to the forefront of the public eye.
While its broader place in society is very much still being debated, what has become clear for the mortgage industry is that AI’s unique capabilities can dramatically improve the lending process for brokers and consumers, generating better outcomes for all involved.
How is AI being used in the mortgage industry today?
The mortgage industry is already starting to benefit from the introduction of AI-enabled systems into the mortgage journey, as efficiency is increased, risk reduced, and more opportunities are created. At the most basic level, AI is being used as a time- and cost-saving tool to automate various administrative tasks, such as ID verification, data entry and document processing.
Some companies are also using AI to power automated valuation models, completing a task in seconds that would have previously required a human to go out and visit a property.
Beyond improved efficiency, AI is increasingly being used as a tool to ensure regulatory compliance and information security. For example, AI-enabled fraud detection software can cross-reference records from a range of data sources, supporting the prevention of fraud and the protection of fraud victims.
At MPowered Mortgages, we are going one step further and implementing AI-enabled solutions to tackle the underwriting process, allowing our underwriters to spend their time focussing on some of the more complex and challenging cases.
This is enabling us to transform a process that can traditionally take several weeks – due to red tape delays and the constant back-and-forth communication between underwriters and brokers – into a process that only takes seconds.
Ultimately, this gives brokers more time to advise their clients, who in turn have the certainty and control to find what they are looking for, sooner.
How do AI and humans co-exist in the mortgage world?
One of the major debates that has surfaced time and time again in regard to AI is whether it can replace humans, particularly when it comes to jobs.
While it can be, and is already being, utilised to automate many of the administrative processes in the mortgage industry, mortgage advice more generally is unlikely to be replaced by machines. A critical characteristic of a good broker is to be able to offer high quality advice – something that requires high levels of intuition and social intelligence.
We predict that AI will not be able to fulfil this function, but instead, will be able to take the less important tasks off brokers hands, and allow them to spend more time understanding and advising their customers.
At MPowered Mortgages, we have adopted a framework that allows AI and human expertise to co-exist, a perfect collaboration that has placed us in a position to thrive in a competitive market.
Our service can eliminate the heavy lifting, allowing brokers to put a greater emphasis on advising and guiding clients, and underwriters less time assessing documents and more time assessing risk, focusing on the nuances of complex cases that benefit from human judgement.
Stuart Cheetham is CEO at MPowered Mortgages
