As a mortgage broker with over 25 years’ experience, I’ve observed profound changes in our industry over the past few years.
The incredible pace of technological advancement, particularly in artificial intelligence (AI), has already begun to reshape the way we work, interact with clients and, indeed, navigate the mortgage market itself.
Over the next decade, these changes will certainly accelerate further, redefining our role and demanding a shift in how we deliver value to consumers.
Further to my recent piece highlighting the shrinking number of regulated advisers, in this article I’ll explore the future of mortgage broking in the UK, examining the opportunities and challenges presented by AI and digitalisation and also why I feel it is vital for brokers to specialise in order to stay relevant as more straightforward mortgage solutions become increasingly automated.
The rise of AI and digital platforms
Online mortgage comparison tools and AI-powered digital mortgage processes are becoming more sophisticated and, sooner than some people might expect, we will see a joined-up end-to-end customer experience for some ‘vanilla’ cases.
During the last five years alone, we have witnessed thousands of borrowers opt out of advice (do they even realise?) for straightforward product transfers, something that many industry experts would have considered unthinkable further to the 2014 Mortgage Market Review. In the future, it is possible that some first-time buyer applications, simple remortgages and other simpler cases could be processed through digital platforms with minimal human intervention.
The appeal of these services is clear.
They will offer convenience and speed, often at a lower cost than traditional broking services. Clients can compare rates and even apply for mortgages entirely online, supported by algorithms that streamline credit checks, affordability assessments and regulatory compliance. AI-driven platforms can collect and analyse data in minutes, significantly reducing the time it takes to approve a mortgage and potentially provide the contactless experience that today’s tech-savvy consumers demand.
The human touch
Despite the rise of AI, there remains a critical place for the human element in mortgage broking, albeit one that is evolving. While algorithms are adept at processing data, they fall short when it comes to more complex, nuanced cases. This includes self-employed borrowers, those with irregular incomes and also clients seeking specialist products such as buy-to-let (BTL), equity release, or adverse credit mortgages.
AI is far from infallible and automated systems can struggle to account for nuances that require a deeper understanding of the market and the client’s individual circumstances. This is where brokers can deliver real value, leveraging their experience, market insight and ability to offer tailored advice.
The personal touch, empathy, and trustworthiness that brokers provide will be difficult for AI to replicate, especially for clients with unique needs.
Specialisation
In a market where AI and digitalisation are poised to steal our lunch at the simpler end of the mortgage spectrum, specialisation will be key for brokers who want to remain relevant.
Brokers should be prepared to carve out niches where their expertise cannot be easily replicated by algorithms. By developing deep knowledge in specific areas, brokers can position themselves as indispensable advisers who deliver value beyond what a digital solution can offer.
Take the example of green mortgages. With the increasing focus on sustainability and energy efficiency, more lenders are offering products designed to incentivise eco-friendly property improvements. Navigating the complexities of these products, assessing eligibility, understanding government incentives and knowing the nuances of energy-efficiency measures requires a level of expertise and bespoke advice that digital solutions are unlikely to offer, at least in the short term.
Adapting to technology
To remain competitive, mortgage brokers must embrace technology rather than resist it. AI and digital tools can serve as powerful allies, helping brokers enhance efficiency, provide a better client experience and improve the quality of their recommendations.
By using AI-driven tools to handle routine tasks, such as data collection, document analysis and preliminary affordability assessments, brokers can free up time to focus on more complex aspects of their clients’ needs, including protection.
This approach represents a shift towards a ‘hybrid’ model of mortgage broking, where technology handles routine processes while brokers focus on delivering value-added services that only human expertise can provide. For instance, AI can be used to gather and analyse client data in real time, providing brokers with insights that inform better, more tailored advice. Brokers who harness these tools will be able to provide faster, highly personalised service, enhancing their competitive edge.
Trust
As technology transforms the industry, brokers must also stay ahead of changes in regulation.
Digital platforms must adhere to the same regulatory standards as traditional brokers, including compliance with Financial Conduct Authority (FCA) rules and data protection laws. Ensuring that AI-driven solutions are fair, transparent, and free from biases is an ongoing challenge for the industry and an area where brokers, with their experience and commitment to ethical conduct, can play a key role in maintaining consumer trust.
Trust remains one of the cornerstones of mortgage broking. Clients want to feel confident that the advice they receive is impartial and in their best interests, particularly when making one of the largest financial commitments of their lives.
By combining their expertise with technological tools and demonstrating a commitment to ethical standards, brokers can build long-lasting relationships that cannot be easily displaced by digital-only competitors.
Opportunities and challenges
I hope that the future of mortgage broking will not be a battle between humans and machines; rather, it will be about how humans and machines can work together to deliver better outcomes for clients. Those brokers who adapt, specialise and leverage technology to enhance their service offering will be best positioned to thrive in this new landscape.
Specialisation, client-centricity and a willingness to innovate will ensure that brokers remain relevant, even as the industry evolves.
The next decade promises both challenges and opportunities, and for those brokers who are prepared to embrace change, the future is bright.
