Machine Learning (ML) and Artificial Intelligence (AI) are starting to transform the mortgage industry.

The technology is already utilized to automatically populate certain documents, to automatically check for compliance with federal and state requirements in real-time and to enhance workflow, among many other uses. It wasn’t too long ago that all of these processes required human involvement to enter figures in documents or to transfer information from one system to another. The use of AI and ML eliminates these time-consuming processes as well as the errors that emerge when re-entering data (i.e., transposed numbers).

The technology has become a strategic growth imperative, according to a National Mortgage News article.

According to a KMPG survey conducted at the publication’s recent digital mortgage conference, managers tend to see adoption of AI as critical for their strategic growth, while others see it as a driver for core operations and as a way to explore and experiment. Nearly half (46%) use the technology in their underwriting, while nearly one quarter (24%) use it for customer acquisition and 16% use AI in fulfillment, and 10% in their origination of mortgages.

Despite the positive outlook for the technology, there are many impediments for those looking to add AI to their mortgage lending operations. According to the survey, nearly one-quarter (24.8%) said their organizations have technology constraints, while only slightly less (22.8%) cited lack of financing/willingness to invest, gaps in talent (21.8%) and execution challenges (19.8%).

All of these challenges can be addressed by working with a technology partner with deep capabilities in these areas, enabling you to focus on the business of mortgage lending, rather than the intricacies of AI and ML.

By working with a technology partner, you can use the technology to help improve the customer experience, automate routine tasks, predict market trends and customer behavior, improve risk assessment, optimize process, manage processes and help detect fraud. With AI and ML handling these, your staff is then free to provide the still needed human element of mortgage lending – building relationships with customers and prospects and providing personalized advice to borrowers. The human touch will remain a critical element of mortgage lending, even as automation continues to make the process much more efficient.

As Alec Hanson, senior vice president, west division, of loanDepot, writes in a Forbes article: “While AI can provide valuable insights and data-driven recommendations, mortgage advisors should always make the final decision, based on their own expertise and understanding of customer’s needs. This human-centered approach can help build trust and establish strong relationships with their customers.”

AI Concerns

Despite the benefits of AI and ML, there are serious concerns regarding these technologies as well, much like there has been over other technologies, like online mortgage applications, online approvals and electronic mortgage payments when they first debuted.

As reported in National Mortgage News, Congress has already held hearings on the potential impact of AI, including the potential compliance burdens on mortgage lenders and others in the financial services business.

The Congressional hearings arose out of concern of the potential negative impacts of the technology as it becomes more powerful and more ingrained in the daily business of mortgage lenders, other financial services providers and businesses in general.

Much of the questioning surrounded the potential impact of AI on society, including risks from using the technology to advance misinformation campaigns during elections, manipulating or anticipating public opinion and the risks to children.

So the more AI is used in the mortgage industry, there could be additional regulations on its use and more of a compliance burden on mortgage lenders and their business partners.