AI & Chatbots enter the market

The digital revolution in the mortgage market is nothing new. Indeed, much of the conversation in the industry in 2017 centred around how the intermediary sector could compete with technological developments in the lender community. However, late last year, things took an even more interesting turn with the introduction of artificial intelligence.

Mortgage broker Nuvo soft-launched into the market in December. The broker uses specially developed smart technology and AI to power a chatbot that talks to borrowers through Facebook messenger. According to reports the chatbot will ask the borrower a series of questions before searching over 50,000 mortgage products in a matter of minutes and recommending the right product for the borrower.

It’s a service that is responding to the desires of the social media generation and is likely to be popular as a result but it does raise some questions.

The boundary between advice and information has always been somewhat murky and the development of chatbots only adds to this confusion. Such technology is being developed to fill the gap between brokers and price comparison websites – and that’s certainly a gap that needs filling – but its role remains undefined, particularly from a compliance point of view.

The key question in this situation is whether such chatbots are giving advice and how that advice is given. Are conversations controlled and monitored by an experienced – and qualified – broker? In which case, is this really an AI-powered technological advancement or simply a broker using a chat facility? Or is it more likely the case that a number of conversations are not monitored? That often conversations go unchecked and the borrower is shown a number of suitable products is much the same way a sourcing system will do, under the illusion they are recommended by a qualified professional? This is where things get complicated.

Technology is the future of the mortgage market but we must make sure risk is not increased as a result and any new developments are always supported by proper compliance and safety considerations.