What makes mortgage professionals embrace, or balk at, AI use

March 20, 2024 12:01 AM

After making headlines throughout 2023, artificial intelligence looks set to remain a dominant technology theme, with many mortgage professionals looking at how to make it work for them this year.

But new technology trends also cause disruption, particularly when they lead to potential job loss. And the rise of generative AI continues to raise as many questions as it does answers regarding accuracy and fairness.

While opinions about where AI tools fit across the financial services landscape vary depending on the industry, common themes are also emerging over the benefits and risks, according to a report released this week by Arizent, parent company of National Mortgage News. In the research, Arizent surveyed professionals across seven different financial segments: banking, insurance, mortgage, wealth management, municipal bonds, accounting and technology.

Comments from mortgage respondents ran the gamut from "I don't see AI as being for the greater good" to "The uses for AI in the industry are infinite."

Here are a few findings from the survey results looking at how mortgage businesses are approaching the growth of AI.

Compared to their peers in other fields, mortgage professionals appear to be dipping their toe in the generative AI waters more hesitantly, perhaps out of uncertainty, a wish to wait and see how technology develops or budget constraints.

Industry voices have also long expressed concerns about the penalties behind unintended bias and potential noncompliance.

While the portion of mortgage companies already implementing generative AI in some processes are not far off the level across all financial services, the share who said they were not sure about future adoption plans over the next 18 months exceeded the average by 10 percentage points.

With buyers making some of the most important financial decisions in their lives when purchasing a home, the highest ranking concern over artificial intelligence in the mortgage industry is the loss of the personal touch when communicating with customers. While this was also the top negative AI prospect overall, with 66% listing it as a potential risk to their work, the share of mortgage respondents who noted this aspect of AI as harmful came in at 76%.

The second most prevalent macro level worry for mortgage professionals — job loss — also outran other industries at 53% versus the 42% average.

Professionals in other financial segments appear more likely to bemoan the possible erosion of individual thought and ethics due to "lack of human thinking" with the rise of artificial intelligence. The introduction of new ethical concerns and skills degradation were the second and third most common risks associated with AI across all industries Arizent measured.

"The skill of thinking and writing will go away," one respondent said.

No dominant theme emerged among mortgage professionals when it came to concerns about using AI in regular operations. Potentially exposing customer data outpaced other concerns with a 35% share, while similar risks like increased possibility of fraud and vulnerability to cyber criminals were at 33% and 32%.

Incorrect or "nonsensical" information given by generative AI tools were a greater concern in other industries, notably banking and accounting.

"Many responses are clearly biased, and in some cases purposely provide false information," according to one commenter. "I occasionally use ChatGPT and asked questions on material I knew well. ChatGPT gave wrong answers."

While artificial intelligence is leading to heightened worries among mortgage employees regarding future employment compared to peers in other fields, another take on the topic is the greater efficiency that will come as a result of AI implementation.

"I see it more as a way to enhance the human beings in our organization and their jobs and performance," a survey respondent wrote.

Mortgage professionals are anticipating the percentage of tasks in their current job to be accomplished by AI within the next five years to almost triple to 40% from the current level of 14%.

Elsewhere in financial services, the share of tasks is expected to also grow to 35% from the current overall average of 14%.

Increased efficiency is the No. 1 anticipated benefit from artificial intelligence in a majority of industries, including mortgage. A 69% share of staff and executives in home lending cited it as a likely positive outcome. Efficiencies were followed by lower costs and automation of workflow.

While mortgage and most financial segments tended to express similar views about what AI can add to their businesses, banking respondents presented one exception. Nearly three-quarters of them expect artificial intelligence to lead to enhanced protections against fraud.