Robo-adviceOct 6 2017

How technology is set to transform mortgage advice

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How technology is set to transform mortgage advice

Technology is not the end of the broker but will have a big impact on the relationship between client and intermediary.

That was the unanimous verdict of mortgage industry speakers at the Legal & General Mortgage Club Live conference in London yesterday (5 October), during a discussion of the impact of robo-advice on the intermediary sector.

Rather than a choice between human and machine, the business model of the future will involve a hybrid approach to advice that provides a better outcome from the borrower, they said.

Pat Bunton, operations and client director at mortgage adviser London & Country, pointed out that the pace of technological change was now so rapid that innovations such as open banking and Amazon’s Alexa would soon allow people to apply for a mortgage online.

Open banking is an innovation that allows third-party providers to share a customer’s data in order to provide a personalised advice service, promising to simplify the mortgage process.

He said: “I do believe technology, if harnessed in the right way, can improve the customer journey. Perhaps it will change an adviser’s job, but we genuinely believe that will change for the better and the consumer journey will be radically simplified.”

He added that the Financial Conduct Authority had “a bit of a love affair with fintech” and was keen to encourage innovation that will benefit consumers.

Stuart Cheetham, chief executive at Spring Financial – a new lender that hopes to receive a banking licence in 2018 – said he expected his firm to be able to complete even the most complex mortgage cases within 24 hours.

He said once artificial intelligence was able to analyse and collate personal data it would have a “huge impact”, but that a hybrid approach would still be necessary.

Mr Cheetham added: “It is only a highly regulated intermediary channel that offers the consumer real choice and advice. That is not going to change – it will morph into a different format. 

“All advisers will be focusing on doing less admin and more advice.”

Andrew Montlake, director at London-based Coreco Group, said technology “absolutely needs to be embraced” by brokers. 

He said the service customers expect was now benchmarked against their last good experience, which was often with tech firms such as Amazon and Uber.

Customers increasingly start their journey on their mobile phones before switching to their laptop and only arrange a face-to-face meeting further down the line, he added.

Mr Montlake said: “As a broker, don’t worry about it. We are fighters and we are survivors. We think it is going to be the end of the world, but we always adapt.

“Embrace technology, let it do the heavy lifting and keep beating the drum about advice. We are integral to the process. There will be fewer brokers in the future, but earning more money and helping more people.”

simon.allin@ft.com