Rob Clifford is group commercial director at the SDL Group which is a shareholder at CENTURY 21 UK, MoneyQuest and Stonebridge Group
In a mortgage market where anything feels possible, particularly if the Bank of England cuts BBR again as anticipated before the end of the year, it is perhaps unsurprising that the focus is back on technology, consumer interaction with it, and whether this will lead to a ‘brave new world’ in the take-up of mortgage advice.
Last month Habito launched its PR-friendly system with much talk of artificial intelligence, a system learning on the job, and perhaps at some point in the future, the disappearance of ‘human’ advisers altogether. You’ll forgive me if I’m rather cynical about the future especially when you consider how complicated the ‘average’ mortgage can get, let alone all the heightened criteria, affordability assessments, stress testing, and everything else that comes with securing a mortgage these days.
The Habito ‘interface’ is an interesting proposition and I think it may have taken the consumer experience of finding a mortgage online above the rather simpler use of a sourcing system. Whether we are looking at the next stage for mortgage advice however is another point altogether. Let’s not forget that the interaction with Habito does deliver advice and a recommendation, but the customer is still handed over to a human adviser to continue with the process and to determine whether the system’s recommendation is after all the right product for them.
As pointed out at FSE London last month it may be fine for ‘straightforward cases’ – if there is such a thing – but let’s see how it copes with clients who have multiple complications from an income, property, mortgage perspective. As we all know, mortgage clients often come with an incredible amount of excess; some of it they are often loathe or reticent to unpack in its entirety.
Will they be willing or able to reveal the necessary financial details of their lives to an online proposition? Is it actually set up to take the amount of information lenders now require and need, before they are able to give that final advice and recommend a product? Show me any case and I’m pretty sure there will be all kinds of additional data requests and requirements after the initial information is taken down. Plus of course, while I’m not suggesting the system isn’t capable, lenders change products and criteria at a staggering pace; what once seemed set in stone and able to pass muster can end up resulting in an underwriting rejection. Without a human being to guide you through this complicated and shifting maze, how frustrated might the average client get with such a system?
Another side issue, which the team behind Habito might also want to beware of, is how the FCA views all of this. In talking about the Mortgage Market Study it is due to publish before the end of the year, the FCA’s director of competition, Deb Jones, highlighted at FSE London the competition areas it will focus on. One of the questions was around the potentially different experience/products that customers who go to different channels currently get? In other words, are consumers getting the right outcomes by going to an intermediary when compared to a direct lender? How might they differ? Why might they differ? One would surely have to add into this research the outcome from an A.I system, given that it’s offering advice and a recommendation albeit via use of a ‘decision tree’? Like all offering advice in today’s market, the robustness of the process will be under scrutiny, as well as the final result and whether consumers are getting the right one.
That said, this remains an interesting development. The key next stage would seem to be the removal of the human interaction with the client altogether; currently still part of the post-Habito experience. Can they make this work and still deliver what the regulator needs, combined with all the complications of today’s mortgage market?
What I do know is that, increasingly, consumers value mortgage advice, which is why the intermediary share of the market continues to grow. Whether they are willing to conduct all their mortgage adviser experience entirely online with an A.I system, without having that crucial human interaction, seems to be another question entirely.
We shall have to wait and see.