There is no question that the mortgage market is more open to technology today than it was even just a few years ago. You don’t need to have been in the industry decades to remember a time when processes were largely carried out offline by lenders, brokers, distributors and the like, but thankfully practices have improved steadily since then.
For example, we have seen the introduction of specialised CRM tools, the growth of sourcing systems, and more recently the increasing integration with credit bureaus, public databases, anti-money laundering providers and other third-party solutions.
Yet there remain great areas of untapped potential, in my view. Certain technological developments which have become central in other areas of financial services, and even other areas of lending, have not quite had their moment within the mortgage industry yet.
Open Banking is a good example of this, an innovation that has led to fantastic improvements in the customer experience in other forms of credit, and yet has gained little traction within mortgages.
There is definitely real room for improvement on how technology is incorporated. Particularly in a market with high broker intermediation, opportunities exist to put technology to use in ways which will take some of the burden away from staff and deliver a smoother experience for customers.
Room for improvement
I think there are three key elements which would represent the ideal future for the mortgage market, based on its use of technology.
First and foremost, there needs to be greater connectivity between brokers and lenders. There’s too much double keying of information, too much task repetition which only leads to delays and inefficiencies. Sharing data between different systems is something that can largely be automated today.
Secondly, we need to improve the format of the data we share. Establishing a more standardised way of presenting information can greatly reduce inefficiencies. Consider all the variety of inputs and methods lenders use today to assess income and affordability, along the differing documents they may require from customers. This lack of consistency adds complexity and increases costs.
Finally, there is the greater use of AI, given its incredible potential for both delivering a better experience for customers and drastically reduce the time staff spends on admin tasks.
The role of AI
There is a real opportunity to utilise AI in ways which can result in enormous time savings for the various parties involved in the mortgage process.
At Sikoia for example we have developed an AI-powered tool which is able to automatically process a diverse range of customer application documents, things like payslips, bank statements and tax returns.
Imagine giving customers instant updates as soon as they submit their application documents, without the need to review manually. Picture customers saving 20 minutes on filling out budget planners and fact finds, while automated checks quickly verify income, employer details, and affordability behind the scenes.
Just a few years ago, having a technological solution which could do this would have not only involved prohibitively high costs but often a lack of reliability. Yet AI is now filing that gap and at far more palatable costs.
Our own proprietary system has been built to do exactly that: ingest the data from those documents swiftly, and automatically generate checks covering the likes of proof of income, employer, single affordability and application completeness.
That’s hours of work - which in itself always carries the risk of human error - being cut down to a matter of moments, and with an impeccable rate of accuracy. Time saved that can now be used to better support more customers.
The benefits to all parties involved are substantial, providing near-instant certainty compared to current, more lengthy and costly methods. The best part is that AI can be implemented in a way that requires minimal changes to current processes and behaviours.
The human touch
A common criticism of the use of technology in mortgages previously has centred on the importance of the human touch. A mortgage is a massive undertaking, and most borrowers feel more comfortable dealing with a real person, someone they can talk to about their various issues or concerns.
I’d argue there is a misconception that technology will replace that interaction; at its best, sensible technology will supplement human advice, not take its place. Effectively, AI can be used to support providers in working more consistently and efficiently, taking on some of the heavy lifting, rather than providing a rival service.
Delivering a faster, smoother experience
I believe we are on the cusp of a period of great digital transformation, where across the mortgage industry technology is integrated more fully into the way we work.
There are such substantial benefits available from doing so, not just in terms of the timesaving but the better understanding lenders will be able to build of their customers.
Today’s borrowers are already seeing AI playing a more central role in the various aspects of their lives and will come to expect it from mortgages too. The only real question is how quickly mortgage businesses recognise the potential improvements it delivers and incorporate it into their plans.
