Clients lack trust in the technology, but broker MD says advisers should embrace it
Despite artificial intelligence rapidly infiltrating our everyday lives, the prospect of an AI broker may seem like a sci-fi vision of the future - it is not, though, beyond the realms of possibility.
Yet consumers are far from ready to accept an AI mortgage adviser it seems – and are overwhelmingly distrustful of AI being used to help them make decisions about borrowing.
New research from Boon Brokers finds that a whopping 83.7% of homeowners would not trust an AI broker to assess their mortgage requirements and 92.8% believe that they would make more errors than human advisers. Additionally, 27.8% of those surveyed said they would never seek AI-based advice, regardless of the technology’ advancements.
AI is currently being used to assist brokers with their daily operations, but an entirely AI mortgage broker that replaces all functions of a regular broker service remains a concept – for now.
Gerard Boon (pictured), managing director of Boon Brokers, believes that AI will be far more of a friend than a foe for mortgage brokerages.
“The technology will be able to assist with every aspect of the mortgage broker service,” he told Mortgage Introducer. “It’s infinite capacity for learning and adapting will eventually make the technology far more productive than human counterparts. Due to this extreme productivity, it seems inevitable that AI will be adopted in every industry.
“AI will only become a foe if brokerages refuse to adapt to it. It could be compared to companies refusing to accept the internet when that was first innovated. Refusal to adapt will likely result in the brokerage becoming uncompetitive due to the productivity gap.”
The study of 1,500 homeowners was conducted to gauge consumers’ thoughts on the adoption of AI in the UK intermediary mortgage market, to establish their current understanding of the technology, and how likely they are to trust it in the short and longer-term.
Study will provide comfort to brokers, for now…
Boon believes the research should reassure human brokers that they have time to react to developments in AI, he suggests too that they shouldn’t rest on their laurels.
“Unlike other industries, where AI is being adopted immediately, the study finds that it will take time before consumers trust the technology,” he observed. “However, even though human brokers have time to adapt, they should be mindful of AI developments and use the technology to their advantage as soon as possible. It seems likely that a hybrid model of working will work best for mortgage brokerages in the long-run.”
He added: “It is true that AI can offer live chat and text communication. However, there is currently no evidence to show that the technology can perform phone calls or e-mails to the same standard as humans. The ability to offer an AI mortgage advice option, along with a human alternative, covers all bases and should keep all clients happy.”
Read more: UK financial services firms hesitant to adopt new technologies – study
What should AI developers do?
The study may provide sobering food for thought for developers in terms of making sure that their technology is safe enough for consumers to trust its use in the mortgage industry.
“Developers will need to rigorously test AI before it is launched in the mortgage industry,” considered Boon. “As there are so many moving parts in a mortgage broker service, errors seem more likely in our industry than others. I believe it’s important that the FCA have full access to the coding behind any AI mortgage broker that is introduced to the market. They will then be able to quickly address any issues that arise, which may have significant consequences for the end-consumer.”
Unsurprisingly perhaps, younger homebuyers are more receptive to the prospect of consulting an AI mortgage broker. In the 25-34 age bracket, 50.2% said they would not trust the technology, compared to 88.3% of those aged 65 and over. Interestingly too, there’s a gender divide on the issue - 22.8% of male respondents confirmed that they would trust AI, whereas, just 11.1% of female respondents were supportive of the idea.
Furthermore, 94.1% of respondents believe that AI would not protect their data and may use it for other means. Some 34.3% of respondents do not believe that AI will ever fully replace human advisers.
“The survey highlights consumers’ need for a personalised broker service,” Boon concluded. “This need should be a priority for any brokerage, regardless of their technological vision for the future.”
