TUC wades in as jobs threatened by new tech
Lenders have been cost cutting enthusiastically as the battle for mortgage market share heats up. And as the mortgage industry increasingly integrates artificial intelligence (AI) to boost efficiency, concerns about the impact on jobs are coming to the forefront. Lenders, like Klarna are already leveraging AI to streamline processes and have predicted that they could cut staff numbers by 50% in total.
“AI enables companies to enhance their value proposition by better predicting and therefore preventing risks,” noted Michael Bruch, global head of risk consulting advisory services at Allianz Commercial, highlighting the technology's potential in the broader financial sector.
With the rapid adoption of AI, UK unions are stepping in to ensure that workers in the mortgage industry, along with other financial services, are not left behind. At the upcoming Trades Union Congress (TUC) in Brighton, union leaders plan to call on mortgage lenders and other financial institutions to invest in large-scale reskilling programmes to prepare their workforce for the AI-driven changes ahead.
Accord, a union representing financial sector employees, is leading the charge by pushing for a comprehensive reskilling initiative targeting the nearly 2.5 million workers in the UK’s financial services industry. This initiative, which will be presented at the TUC’s annual conference, underscores the potential disruption AI could cause in the sector.
Read more: Yes AI is smarter than you, but can it replace you?
A recent report by Citigroup emphasised the significant threat AI poses to jobs, with up to half of positions in banking potentially at risk due to automation. “Congress notes with concern a report from June 2024 stating that up to 54 per cent of banking jobs and 48 per cent of insurance roles could be displaced by AI in the future,” the Accord motion states. The concern extends to the mortgage sector, where AI could similarly disrupt traditional roles.
Sharon Graham, general secretary of Unite, one of the UK’s largest unions, voiced her concerns about the country's slow preparation for the effect of new technologies. She stressed the importance of a coordinated effort among the government, employers, and unions to mitigate the risks of AI, such as job loss and increased inequality.
As AI becomes more integral to the mortgage industry, companies will need to balance the benefits of technological advancements with the potential impact on their workforce. At the TUC conference in September, union leaders will push Labour ministers to consider regulations that govern AI’s use by employers, with a focus on transparency, worker protections, and what it calls ‘ethical AI deployment’.
Read more: Can AI replace mortgage intermediaries?
The growing reliance on AI in the mortgage sector has raised alarms about job security, with industry experts predicting significant shifts in job roles. Accord’s motion is just one of several AI-related topics that will be discussed at the conference. Any resolutions passed could shape future policies and practices within the industry.
The implications for the mortgage industry are significant. As AI becomes more widespread, lenders will need to develop strategies that address the potential for job displacement while also taking advantage of the new opportunities that technology presents. This will likely involve retraining programmes and careful planning to help employees transition into roles that AI creates. “The dramatic appearance of AI on the scene will lead to wholesale changes going forward, and slow adopters will be left behind,” Bob Singh, the founder of Chess Mortgages told Mortgage Introducer in an interview.
Last year, the TUC proposed a framework for regulating AI in the workplace, advocating for workers’ rights to be informed about AI usage and protections against unfair dismissals. TUC assistant general secretary Kate Bell stressed the need for these measures, noting that AI is already making "life-changing calls" in employment decisions.
Mortgage lenders, operating within a tightly regulated environment, are cautiously adopting AI. Jana Mackintosh, managing director of payments, innovation, and resilience at UK Finance, noted that companies are not only investing in AI talent but also focusing on upskilling their existing workforce to ensure responsible AI use.
The mortgage industry will be closely monitoring the outcomes of the TUC conference and any potential government actions that might regulate AI adoption, potentially affecting how the industry can utilize this transformative technology.
Which mortgage lenders are already using AI?
HSBC: HSBC has been integrating AI into its mortgage processes to help with customer interactions, automating parts of the application process, and improving decision-making by analysing large datasets.
Barclays: Barclays has adopted AI to enhance the mortgage application process, including using chatbots for customer service and AI-driven algorithms for assessing mortgage applications.
Nationwide Building Society: Nationwide uses AI to improve the speed and efficiency of its mortgage processes. They have implemented machine learning algorithms to assess creditworthiness and process applications more quickly.
Lloyds Banking Group: Lloyds has been utilising AI across various parts of its business, including mortgage lending, where it uses AI to analyse credit risk and streamline application processes.
NatWest: NatWest is using AI to automate parts of the mortgage process, such as documentation and application handling, improving both speed and accuracy in lending decisions.
Santander UK: Santander has integrated AI to enhance its mortgage lending operations by improving the customer journey and using predictive analytics for better decision-making.
Metro Bank: Metro Bank has introduced AI to improve its mortgage processing efficiency, utilizing AI to quickly assess and process applications.
Atom Bank: As a digital-only bank, Atom Bank has heavily invested in AI technology to offer a fully digital mortgage experience, from application to approval.
MPowered Mortgages: Has enabled a ChatGPT powered chatbot that already handles 30% of broker/intermediary enquiries without human intervention.
Bath Building Society: Has similarly enabled an intermediary only chatbot.
