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AI – A danger or a helping hand to mortgage advisers? Industry experts react

by | Oct 11, 2023

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AI has without doubt been one of the topics of the year within the financial advice space. How can it be used? Is it here to replace us? How can it help me? All questions that mortgage advisers have been asking themselves.

IFA Magazine reached out to our industry experts to find out the experience they have had with AI so far and where they see it going in the future.

Conor Murphy, CEO and Founder, Smartr365 and Capricorn Financial Consultancy said: “Artificial Intelligence (AI) has been a hot topic in the financial services for some time now, and while the mortgage market has made huge strides in terms of digitisation in other ways – such as with fully digital mortgage applications – its use of AI remains limited.

“For example, some systems have operated on very simple algorithms or decision trees. However, looking forward, I am confident that the mortgage market’s use of AI will advance rapidly from here. AI tools are developing quickly and being used to great effect in adjacent industries – the time is now upon us mortgage professionals to see how this exciting technology can benefit our needs.”

Jodie White, Head of Product and Transformation at Legal & General Technology said: “Artificial Intelligence (AI) is already providing a huge boost to the mortgage industry behind the scenes with varied uses. AI has huge capabilities with data analysis – promoting quicker and more consistent underwriting and better risk assessment – which could lead to personalised pricing and terms. AI is also supporting with enhanced fraud detection across the board, and helping lenders to process applications quickly and accurately.

“Notwithstanding this, AI is also widely used in the customer journey, particularly with chatbot technology and virtual assistants providing 24/7 support with customer queries. I can see a future where brokers work in tandem with AI to provide the most efficient and accurate mortgage advice, with AI tools taking the burden of admin, allowing brokers to do more of what they do best.

“Ultimately, this has the potential to develop an enhanced customer experience, more personalised advice process, and reduce costs. There is also the potential to develop AI tools which support customers to build their credit scores and become more credit aware. The rate of development and breadth of future uses are both extremely exciting.”

Howard Levy, Director of SPF Private Clients, says: “AI is great when it comes to broking vanilla mortgages or for basic information but for the specialist market I find that it is just a starting point. The complexities that arise can’t be catered for by AI, and nor would I wish that to be the case, given the bespoke nature of this segment of the market. 

“Keeping information updated is fundamental in the fast-changing market we find ourselves in – AI can provide some form of structure to these changes but is by no means the only solution. The moving of data from one system to another is useful but not at the cost of human interaction to ensure everything is correctly input to begin with.

“We also don’t want to lose the connection between a client and their broker. The more IT barriers that take away that direct interface, the more likely it is that a client would not divulge the soft facts that are also imperative to giving best advice.”

Tony Silver, Director at White House Mortgages said: “There is already far too much automation in the mortgage process, so in my view, AI should be approached with extreme caution. The vast majority of my clients have been with me for 15-20 years. Over this time I have got to know my clients and am able to advise and react to their changing needs. No machine can ever do this.

“Lenders already rely on unfathomable credit scoring, assumed affordability modules and automated valuations. Don’t be fooled into thinking that any of this is intended to assist the client in any way, shape or form. Automation is being used to reduce lenders costs, by replacing experienced staff with computers. Even when you find experienced staff members, the lenders have removed their ability to open a case to see why it may be declining due to affordability or credit scoring. Then when the valuation comes in, you can’t challenge it whether it’s accurate or not. Before automation, lenders used offshore processing teams since their wages were a 10th of those in the UK. It all smacks of lender greed wrapped up in a veil of supposed efficiency.

“Computers should be used to aid human endeavour, not to replace great swathes of it in the pursuit of greater profits for the lenders. Yes, technology has come an incredibly long way since I created my firm in January 1997. Mobile phones had only just been invented and Bank and Building Society Managers held mandates, and were responsible for their own lending book. Technology has helped make the advice process more efficient, but there has to be a line drawn. My advice for what it’s worth, is to proceed with extreme caution!”

Richard Dana, co-founder and CEO of Tembo Money said: “We are using AI more and more at Tembo Money.  This week we’ve been working on launching a new proposition and undertook user testing with 40 insight interviews with potential customers.  ChatGPT synthesised all of the findings into an insight report saving a couple of days of manual work. Arguably the insights were also more concise and comprehensive than if they have been compiled manually.

“We’re developing our own AI applications to help supercharge the brilliant human mortgage advisors we have at Tembo, helping make them more efficient and give them access to the information they need instantly. It won’t replace the need for people and advisors, but it can dramatically improve efficiency and output.” 

Robert Winfield, managing director at Chartwell Funding said: “I am getting a feeling of De Ja Vu when it comes to AI! I heard the same commentators predicting the end of mortgage brokers when the internet bought innovation in self-sourcing of mortgages through the world wide web. The reality however was pretty different and most of Charcol’s clients ticked to pay a fee and speak to an adviser at the end of the online fact find.

“Like many I am absolutely clueless when it comes to AI and the benefits it can bring. I do embrace technology and use it where required, but I am old school and feel it’s good to talk to customers. Having been in financial services for 35 years I still think it was my customer service training at Natwest in the late 80’s that gave me the foundations to run a successful business. This is why I am confident that humans will always out smart robots when it comes to providing advice, service and results!”

Stuart Phillips, Director at AALTO Mortgages Ltd said: “Having worked on a number of technology projects and currently exploring how AI can assist in the role I think there are two factors. The old sales adage: “people buy people first” matters. You don’t choose a solicitor or broker because of how efficient their back office is, or the quality of their blog posts, but how you feel about their advice and whether you trust them to look after you and that wont change.

“However in terms of the back office processes, compliance, fact finding, research; AI has the power to distil huge amounts of complex data and present it in the easiest way to make brokers advice better at the job they do.

“Current generative AI like LLAMA or GPT don’t create, they recycle very effectively what’s already out there and should be applied with that in mind.”

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