Much is being made of the march of technology predicted to make redundant the traditional mortgage broker. Apparently we are soon to see the application of Artificial Intelligence, robo-advice models, enhanced sourcing, propensity modelling and direct to lender application and approval processes which spells the end for traditional approaches. As a child of the 1960s I remember Robert the Robot from the early Supermarionation TV programme Fireball XL 5. Unlike much of what we encounter today, this Robert the Robot was transparent.
This was an early view of what the world might be like in our future. For me the tales of technology blowing away the human element in the transaction is a long way off. The technology I have seen to date still requires broker intervention to comply with the regulatory standards brought in after the last financial crisis to protect both consumers and national economies from systemic risk. Consumers still profess to want to talk and the systems still need lots of development before they can achieve the true mantle of regulated advice.
Lest I am accused on joining the Luddites, I have always have been an advocate of progress. Change is the constant, and innovation and new technology has been ever present since humans rose on two legs. It is a large part of what makes us human with the ability to adapt and evolve. However the current hubris surrounding the new breed of advice firms appears to me a little overdone.
Investment in new technology that simplifies processes will reduce the unit cost for lenders and should speed the process for all involved. Our sector must not stand in the way of progress but ensure we are at its heart. Lenders must build their new technology propositions with the broker option present from day one. For our part firms must look at how they work with technology to ensure great customer outcomes. They need to be alive not just to new business but also to existing customers. I am worried that not enough firms have websites and those that do, do not cover re-mortgaging effectively.
We will soon see more systems coming to market which will help brokers match customer profiles and needs with products – criteria based matching systems which can then be used with more traditional sourcing systems to ensure the best recommendation. The arrival of open banking standards will give consumers more control over their data and the ability to shop around more easily. Having software that interfaces into this space will be crucial.
The battle between app-based approaches which may work for initial enquiries and early data gathering, must switch seamlessly to the more traditional web-based portals for more complex and secure application and offer elements. I am sure that advice will remain a human thing, with the delivery of full algorithms that are truly advice being at the margins with significant risks. I have no doubt that in time this will form a significant part of our market. However true robo-advice where there is no human intervention remains a long way off.