Written by Thora Kehoe, Chief Product Officer at Smartr365
Artificial Intelligence (AI) has been operating in the background in the financial sector for some time now, with AI-powered chatbots being developed to support customer communications over several years.
More recently though, attention has turned to tools like ChatGPT and their ability to generate content in a natural language, mimicking a ‘human’ conversation.
However, the real genius of this technology lies in the core APIs developed by OpenAI that underpin ChatGPT. There has been a recent wave of new capabilities launched to the market, opening up new possibilities for rapid innovation, such as Microsoft’s suite of capabilities, Azure AI.
Integrating this technology with existing platforms and tools has significant potential to increase efficiency and streamline processes, especially within the mortgage industry. This sentiment is shared by the UK government, which recently announced funding of £100 million to kickstart the country’s capabilities in artificial intelligence. But what value does AI have in the mortgage industry specifically, and is it really the threat many suggest?
A helping hand for advisers
A typical mortgage application involves a substantial amount of admin, both for the mortgage adviser and the homebuyer. This is where AI can come into play, automating many of the tasks that take up brokers’ time, such as data extraction and document gathering – as demonstrated in Smartr365’s Open Banking integration. By using AI powered capabilities, we can reduce the time spent on paperwork, streamlining the overall homebuying process, but they also drastically improve the experience for Homebuyers.
Outside of this administrative support, there are huge benefits for lenders leveraging AI to analyse vast amounts of data and identify trends and insights that can be used in risk assessment and underwriting. Data analysis could also be used to empower compliance teams and networks in better understanding case review and training needs.
Though the ever-increasing use of AI does also raise concerns around fraudulent mortgage applications, as criminals are able to use these tools to create forged documents, the technology can actually be turned against these criminals. AI can detect fraud and mitigate it by reviewing documents and identifying anomalies that are consistent with fraudulent activity.
Human advice still critical
The rise of AI certainly has exciting implications for the mortgage sector, but it’s important to remember that this transformation is something that will take place alongside human advisers – AI advancements should be used to complement them, not replace them.
Widespread adoption of AI could increase the use of fully digital, AI-driven platforms such as ‘robo advisers’ that offer mortgage and financial advice without any human intervention. But though these platforms already exist, and can often be a cheaper, accessible option for homebuyers, they lack the emotional intelligence and personal support that a human adviser can offer. For all brokers, establishing and maintaining strong relationships with customers is one of the most valuable and important parts of their job – that cannot be replicated by AI.
This technology also has a reduced ability to advise on complex situations, and concerns remain around regulation and compliance under the Consumer Duty Act – it is unlikely that the algorithms behind these tools will be able to ascertain whether or not a customer has a comprehensive understanding of the decisions they are making, for instance.
The mortgage industry is moving towards a digitally integrated and frictionless framework. It’s an exciting time for our sector – and I can see a future where AI isn’t there to take the place of advisers, but where it will work alongside them to streamline processes, reduce their workload and increase their time spent offering quality advice, ensuring the best customer outcomes.
About Thora Kehoe
As the Chief Product Officer at Smartr365, a leading end-to-end mortgage technology platform, Thora helps to steer the vision of the business and bring features from concept to launch. Prior to this, Thora held various fintech roles in the UK and Canada and is passionate about integrating technology to streamline business operations across financial services.
