You are here: Home - Better Business - Business Skills -

Robo-advice helps our brokers submit more applications – Habito

by: Martijn Van Der Heijden, chief strategy officer at Habito
  • 07/12/2017
  • 0
Robo-advice helps our brokers submit more applications – Habito
Robo-advice is considered part of the fourth industrial revolution, but it has become an overused and frankly misunderstood term in the industry.

Put simply, it is financial advice given online that has been generated by an algorithm. No literal robots are involved.

That this new wave of technology has been branded a revolution indicates just how much potential it has to be disruptive; robo-advice could change the face of financial services by making a formerly exclusive and expensive industry accessible to everyone and at lower fees than ever before.

Certainly in investment management robo-advice is building market share fast, and mortgages is next in line. We believe it has a vital role to play in democratising access to quality advice.

 

Inferior and dangerous

Yet some in the industry believe it is inferior and even dangerous, because a robo-adviser can’t yet go off-script and therefore ask the right questions to give personalised advice. Put like this, it is easy to see why naysayers doubt the impact of robo advice.

However, across the financial services industry we are seeing signs that this group is shrinking – in June, HSBC announced it was rolling out robo-advice for small savers, while Blackrock invested in Scalable Capital, a UK robo-adviser.

In October Aviva, whose executives previously told the Financial Times that “real” robo-advisers had yet to emerge, bought a stake in wealth management robo-adviser Wealthify. Even the CFA Institute is updating its professional exams to include questions on artificial intelligence, big data and robo-advice.

 

Early stages advice

At Habito, we use robo-advice to guide customers through the early stages of applying for a mortgage.

Our Digital Mortgage Advisor (DMA) starts all applications by asking a set of dynamic questions to assess current requirements and future life events.

We then scan over 70 lenders and 20,000 products to find the best mortgage on the market for that person, in real-time and on any time.

There is no way a human broker could do all this in five minutes, but of course our robo-adviser is not 100% right for every scenario, and that’s where our experts come in.

 

What humans do best

The DMA – it gives us more time to focus on what humans do best; the talking, planning and thinking creatively around more complex or unusual mortgage cases.

Each of our brokers submits many more applications every day than the industry standard, but has the time to have meaningful contact with each customer.

The second huge advantage is that it means we can provide our service for free.

The technology already exists to perform repetitive manual tasks much better than humans can, but adoption with traditional brokers is still low.

Robo-advisers are simply cheaper, faster and more accurate and it is largely due to our DMA that we’ve been able to grow as quickly as we have, in just 18 months.

 

The tide is turning

Investment into robo-adviser businesses continue to grow and while doubters still theorise about a robot’s lack of sophistication, the technology delivers for customers everyday.

The machines march on.

There are 1 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
  • RT @ashridgepf: Well what a surprise! We love our clients and they obviously are quite fond of us. Mortgage applicants find humans more r…
  • RT @DanielleDennis9: Always love reading through the tweets of the year every December! Have a look through to recap on a great year https:…
  • RT @mortgagestall: Great to see the hard work brokers put in is getting ever-more recognised https://t.co/cg4ZaJzZJZ
Read previous post:
GDPR
GDPR: Seven things you need to know to protect your business

The General Data Protection Regulation (GDPR) comes into force in the UK on 25 May 2018, and the UK government...

Close