Professionals in a range of sectors across North America are sitting up and taking notice of a new report by MIT’s Project Iceberg, a simulation of the US labour market that found nearly 12% of workforce tasks could be completed by current artificial intelligence (AI) tools.
That model represents about 151 million workers across 923 occupations and over 32,000 skills. Its findings have seen a familiar debate rear its head once more: whether the mortgage industry and brokering profession are under threat from the rapid rise of AI.
The prospect of brokers being replaced by AI remains a distant one. High Iceberg scores were driven mainly by the model’s ability to replicate cognitive work, described by MIT as “financial analysis, administrative coordination, and professional services.”
That might mean backend tasks and administrative duties, rather than the most important day-to-day responsibilities of a frontline broker. And many mortgage pros believe brokers’ ability to produce tailored solutions for a client’s extremely specific needs and contexts is something that will continue to set them apart from automated tools.
Consider a homebuyer with a sizeable down payment. One option might be to use that money to pay off debt, take on a larger mortgage, but reduce monthly liabilities and get into the housing market now instead of waiting. That’s the kind of complex trade-off not many buyers would feel comfortable entrusting to an AI model.
“I feel like this is where the real humans are going to survive over the AI tools,” Sharon Davis a Vancouver-based broker, told Canadian Mortgage Professional. “AI doesn’t think that way. AI doesn’t say, ‘Well, let’s look at everything.’”
Some Canadians still uneasy with AI-driven mortgages
For most Canadians entering the housing market, a home purchase is one of the biggest investments they’ll ever make. Trusting a computerized model with a transaction totalling hundreds of thousands of dollars isn’t a decision many would take lightly, and plenty would still prefer to place that trust in a human.
While younger, more tech-savvy buyers might be more comfortable with an AI-fuelled mortgage, the prominence of the so-called “Bank of Mom and Dad” in today’s mortgage market also suggests human involvement will still be important.
“Thirty-year-olds who have all their own money and are making all their own decisions are super-techie,” Davis said. “But their parents, if they’re giving them any sort of money, want to know: ‘What are you dealing with? Are you dealing with a bank?’ Or ‘I want to talk to that person.’”
The pros and cons of AI in mortgages
Digital mortgage lender nesto spelled out some of the drawbacks potentially associated with AI in the mortgage sector in a recent blog post – including a potential lack of deeper understanding of borrower profiles, possible miscommunication without human support, and the risk of unintentional exclusion of applicants because of strict criteria used by an algorithm.
On the flipside, it could also enable 24/7 interaction with borrowers, minimize human error in data entry, clear manual paperwork, and enhance fraud detection with pattern recognition.
Of course, brokers are well aware that staying up to speed with technological advancements is essential to keeping up pace with the competition – and that means embracing AI and some of the ways it can automate or accelerate tasks.
Striking that balance can be difficult, but Davis said it’s one that’s important for every mortgage professional as they map a path forward in the industry amid a time of rapid change.
“I feel like there’s definitely still a lot of space for the human touch and for brokers that are not using the combo [of AI mixed with their own approach], they’re cutting out a huge segment that still wants them,” she said.
“We have to be a hybrid. We need AI to keep us moving forward and help us be more efficient.”
Published by Fergal McAlinden of Canadian Mortgage Professionals Magazine