Mortgage brokers are being encouraged by the Financial Conduct Authority (FCA) to embrace technology, including artificial intelligence (AI), to enhance customer service.
In its initiative to shape the “mortgage market of the future,” the FCA has identified four key areas of focus. One of these areas, focusing on innovation and transparency, aims to increase the adoption of AI by brokers while still maintaining a human element in the process. The FCA emphasizes the importance of utilizing data and technology, such as AI, to assist brokers in providing more efficient and effective advice while retaining a personal touch.
Another focal point is the introduction of more flexible mortgage options to cater to first-time buyers and underserved individuals.
David Geale, the FCA’s executive director for payments and digital finance, stated, “We have made significant strides this year to enhance outcomes for individuals seeking a mortgage. By leveraging feedback from consumers and industry experts, we aim to drive further reforms and mitigate risks, ultimately increasing access to affordable mortgages to meet the evolving needs of consumers.”
While AI is increasingly utilized in the financial sector, maintaining a balance between automated processes and human interaction is crucial. Research conducted by Santander revealed that a majority of mortgage borrowers prefer working with a broker over AI when purchasing a home, citing the personalized guidance and emotional support brokers provide during the complex home-buying process.
Graham Sellar, head of intermediary channels at Santander UK, emphasized the unique value that brokers offer, stating, “It’s evident that borrowers value the expertise, guidance, and personal touch that only a broker can offer.”
Technology, including AI, plays a pivotal role in enhancing efficiency throughout the mortgage process. While AI can support initial research and exploration of deals, the trust and relationship built with a broker are irreplaceable when making significant life decisions.
These advancements represent a step towards simplifying the often convoluted and challenging process of purchasing a home. The government’s recent announcement of a collaborative effort to modernize the home-buying and selling process, spearheaded by the Centre for Finance, Innovation and Technology (CFIT), aims to eliminate common issues such as collapsed chains, excessive fees, and gazumping.
Supported by the Smart Data team at the Department for Business and Trade, this coalition is working towards developing a roadmap for implementing a smart data service in the home-buying sector, potentially revolutionizing the industry with a prototype smart data system.
