But as more people depend on tech-based advice, how will brokers maintain their competitive edge?
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The technology in driverless cars is still maturing, but it is compelling: With laser-based radar systems, cameras and accurate point mapping, they can capture 1,000 times more data than the human eye and process it 70% faster, said American futurist and startup founder Brett King at the AMP Amplify event on Wednesday.
And that’s just some of the incredible progress being made in the auto industry. The banking industry is not immune to the increasingly sophisticated disruptions flooding the market, and the future of financial advice, including broking, could feel the pinch.
“Once they have more data plugged into an AI, I’ll be able to get consistently better advice and decision making than I get from a human [who is] limited to the … set of data they can remember,” King said.
“In the advisory space, we already see robo advisors starting to match human-led firms in terms of performance with 11 to 12% portfolio returns over the last couple of years. So we can assume that they’re going to get better at this technology over time.”
According to King, the scenario where AI becomes more relevant than human advice is not as far off as one might expect.
“It’s not man vs. machine in the near term; it’s man with machine vs. man without machine that is going to differentiate. In seven years, maybe earlier, it will be AI vs AI, which AI platform is best.”
So how should brokers get ahead?
Getting a mortgage is about buying a house. So brokers need to consider the whole home buying experience, moving beyond just the nitty-gritty details of the mortgage. There will also be more emphasis on providing real-time updates and context.
Brokers should be able to provide property advice to their clients, such as where, when and what to buy, he suggested.
“That advice becomes far more critical in terms of connecting with the customer for delivery of a mortgage product than the features of the product itself.”
AMP Bank group executive Sally Bruce said all industries, including financial services and mortgage brokers, will be forced to evolve as technology continues to drive change. “It is both smart and necessary to be actively working to anticipate these changes,” she said.
“At AMP Bank we look forward to working closely with our partners to anticipate consumers’ changing expectations and to be best placed to meet them.”
A futurist’s projections for 2025
- More people will have signed up for a bank account through their mobile phone than a bank branch, redefining the concept of a bank account
- More people will get advice on a daily basis from a tech-based solution rather than through a human
- 20% of transactions will migrate through voice-enabled commands
