Artificial Intelligence (AI) has been transformative for a wide range of industries – from AI powered diagnostics in healthcare and fraud detection in banking, to AI-driven logistics and predictive maintenance across the manufacturing, energy, and transport sectors.
Yet, despite the fact that AI is driving efficiencies across countless industries, the mortgage sector remains slow to adopt its potential, and unless mortgage lenders and brokers evolve, they risk being left behind.
However, while it is clear that AI can drive efficiencies and better customer service, many brokers have concerns about the impacts it might have on the integrity of the mortgage process, which is creating barriers.
The mortgage sector is lagging in AI adoption
According to research from Nottingham Building Society, 41% of brokers feel that mortgage applications are taking as long or longer than they did two years ago. Furthermore, nearly half (45%) believe lenders have not moved quickly enough to meet the changing needs of borrowers. These findings highlight the fact that the sector needs to leverage technology to streamline processes.
And it is not as though the technology is not available; in fact, AI is already transforming the mortgage process in incremental steps. Predictive AI is helping lenders analyse historical data to anticipate borrower trends, while generative AI can automate document processing and client interactions. The next stage, agentic AI, will be even more transformative, allowing for real-time decision-making, intelligent underwriting, and seamless integration with financial institutions.
The impact of AI on the mortgage process
At Nottingham Building Society we’re already rolling out a transformative new AI platform with the help of MQube, which will demonstrate how AI can revolutionise mortgage applications. The platform will enable us process applications in minutes by analysing 20,000 data points in real time and automates the entire underwriting process – from application to completion – reducing inefficiencies, mitigating risk, and speeding up approvals. By dynamically adjusting questions based on available data, it minimises unnecessary back-and-forth between underwriters and borrowers, making the process faster and less stressful.
This type of AI-driven transformation is precisely what the mortgage sector needs to enhance efficiency and improve borrower experience. Yet, while some brokers embrace these advancements, others remain sceptical about AI’s role in the mortgage process without proper oversight.
Broker scepticism and the need for regulation
Our study found that broker appetite for AI is mixed. While 28% fully support AI’s role in streamlining mortgage applications, another 30% acknowledge its potential but want to see proper regulation. Almost one in five (18%) brokers say they are ‘cautiously open’ to exploring AI, however, 20% remain outright sceptical, unwilling to embrace AI until they are certain of its safety and effectiveness.
And this scepticism is understandable. AI adoption in finance raises concerns about transparency, fairness, and accountability. If AI systems are not properly regulated by the FCA, they could introduce biases in lending decisions, making it crucial for regulators to establish clear guidelines. The industry must work collectively to ensure AI-driven processes remain ethical, unbiased, and compliant with financial regulations.
Balancing AI adoption with human expertise
One of the biggest misconceptions about AI in mortgages is that it will replace brokers. Yet, within the sectors that have embraced AI the most enthusiastically, the technology has not replaced those already working in the industry, but instead relieved them of time-consuming, administrative tasks.
In the mortgage industry, repetitive tasks such as client screening, factfinding, document processing and compliance checks can be taken on by AI, allowing brokers to focus on their core expertise: advising clients, structuring deals, and providing strategic guidance.
For example, by assessing documents and data in real-time during the application, our new platform’s dynamic question functionality only asks for information that it can’t source elsewhere, speeding up applications and reducing the back and forth between underwriters and clients, making for a much better customer experience.
The mortgage industry is built on trust and relationships, and while AI can enhance efficiency, enable scale and remove human error, it cannot replace the human touch that brokers provide.
The future of AI in the mortgage sector
With AI, it seems the mortgage industry is at a bit of a crossroads. On one hand, AI offers the opportunity to improve efficiency, reduce costs, and enhance customer service, but on the other, brokers remain cautious, wanting to see AI properly regulated before fully embracing its capabilities.
Therefore, we need to take a balanced approach: lenders and brokers need to work together to implement technology responsibly while ensuring compliance with the industry’s strict regulations. At Nottingham Building Society, we see our adoption of new technologies as a step in the right direction, demonstrating how AI can enhance mortgage processing without diminishing the role of brokers.
For the industry to truly evolve though, lenders must invest in education and training to help brokers understand and utilise AI effectively. By doing so, they can bridge the gap between traditional processes and the future of mortgage lending.
