AI & Mortgages – Those pesky robots are at it again
by Phil Bailey - Managing Director, Meet Parker • 13 September 2022
Without digging up the past too much, who remembers the fleeting moment “Robo-Advice” was the buzz word of the year for mortgages?
It may have been a lot of hype, wasn’t advice, or very robotic for that matter. It did however have one knock-on effect to the wider mortgage industry. The need to digitise!
Which has been steadily increasing more and more these past few years as everyone, from lenders and advisers, fintech’s and providers, to estate agents and developers try to add efficiency, tech and most importantly – meet the growing needs of the 24/7 consumer.
The year is now 2022 and guess what, the robots are back and this time… I believe they have learnt their lesson; no longer are they trying to give mortgage advice or replace a professional adviser or broker.
This time they have found their calling, found their rightful place and with a focus firmly on enhancing those that already serve this complex industry.
Bot, AI, API, Augmented Intelligence, Machine Learning, Algorithms or whatever you wish to call the latest phase of robotic involvement in mortgages… it’s already here and in use.
Let’s get one thing straight from the very beginning, when we use the word ‘AI’ – Artificial Intelligence, we are in fact talking about some of the many branches or sub-categories of AI. Machine Learning (ML) or Augmented Intelligence (AI).
“Artificial Intelligence (AI) is the part of computer science concerned with designing intelligent computer systems, that is, systems that exhibit characteristics we associate with intelligence in human behaviour” (Barr & Feigenbaum, 1981)
There is no self-awareness going on in these wider branches of AI and the robots won’t suddenly start discussing US politics with your customers.
They follow a process, a flow and can learn within the parameters set. If we feed the robots data on mortgage queries - they will begin to learn about mortgages, terminology, phases, likely questions, outcomes etc. Sticking firmly within the confines of their data sets.
Lenders / Banks
Did you know, most lenders and banks already use some form of AI.
In fact, anyone that has ever used Microsoft Teams is technically using AI to improve their video and call quality. Every time you join a meeting AI is enhancing your experience, lighting, audio and background noise without you even realising it.
See, the robots are here and you didn’t even know it.
Most lenders, particularly the top 20 are now using some form of AI. Be this in Conversational AI (chatbots), Fraud Detection, Behavioural ML, Decision Making, Income Categorisation, Valuations, Risk Modelling or general Productivity Enhancements & Process Automation.
AI is making huge waves with Banks & Lenders and its way more than just “Computer Says No”.
From how quickly you type your password, to how you navigate and fill in an application form. AI is helping lenders spot potential issues, fraud and risk - before they escalate.
KYC & AML checks are faster and it’s even possible to check someone’s details, in real-time across multiple social media platforms in one hit, to see if they are who they say they are.
AI can already classify cases into different processing areas and maintain a real-time status update for staff and external partners. This can streamline operations and help Case Managers and Underwriters with their decisions and the time it takes to action these.
Valuations (AVMs) use data, lots of it to build a picture of the property. In turn ML is used to understand the risk, value and model the data against other transactions and valuations. Couple this with a desktop valuation and you have your ‘Augmented Intelligence’.
AI is also helping to triage applications, queries and processes – wait times should decrease as the right questions and applications are landing with the right people, first time.
You may all sit here with a loathing of chatbots and for the most part, they can often fail at the first hurdle.
“The UK is one of the top 5 AI-powered chatbot-using countries in the world” (cybercrew.uk)
We need to come to embrace the fact these are not going away, and will continue to become more dominant in our day to day lives. The mortgage industry is data rich, regulation heavy and has many touch points. AI is made for this landscape.
We are now beginning to see a steady move from traditional chatbot to AI Forms, in order to improve user experience and almost ditch the ‘Not another chatbot’ stigma. This is where the real change begins.
Chatbots are however, getting smarter and far more advanced. A good chatbot or AI form can transform a business and we are beginning to see more and more of these utilised in the mortgage market. A focus on user experience (UX) and value to the end user, over the traditional reason of “let’s add a chatbot to our website to save operational costs”… which as you guessed, rarely works out that way.
In this digitalised world, 88% of people trust online reviews over personal recommendations, with a recent McKinsey study showing that “after a positive customer experience, over 85% of customers buy more”
Intermediaries
It's now time for the intermediary and their customers to gain some of these benefits, directly into their business. Without the enormous costs and complexity usually associated with ‘AI’.
One huge benefit bots are providing to advisers is website engagement. Think past the traditional chatbot that everyone feels obliged to stick in the bottom right corner of their page, look towards more interaction and intelligence through AI Forms and Assistants.
Guided customer journeys - starting on your social media, marketing campaign or website can involve and empower the customer far more than any typical chatbot. No more ‘Contact Us’ buttons or misleading ‘Best Buy’ mortgage rate tables littering your website. An intelligent and welcoming journey for the customer to engage with yourself and your brand.
Want to take the best parts of a digital mortgage broker and combine them with the value of your current advice business? Get an AI Form / UX and add some real engagement to your website, brand and social channels.
If you wish to stay relevant in today’s market, make sure you have more than just a ‘Website’ and bring it to life with the help of a robot. You will be surprised at how helpful they can be when they stay away from the advice and stick to other areas.