The mortgage industry has evolved rapidly in recent years, and technology has stood at the centre of its transformation. The current market conditions have made it so.
As rising gilt yields and economic headwinds challenge lenders’ profitability, technology isn’t an optional tool or a ‘nice-to-have; it is integral for lenders to drive operational efficiency, remain competitive in the market, and provide a high-quality customer experience.
But what does that transformation actually look like? It means streamlined processes, reduced costs, and a wider pool of borrowers than was ever possible at any time in the history of mortgage lending. From automated credit assessments powered by AI to blockchain-secured transaction records, technological advancements have revolutionised the sector. In fact, research shows that 30% of US lenders have already adopted or tried AI software, with the figure expected to climb to 55% by 2025.
However, as the sector becomes increasingly digitised, lenders face the challenge of embracing innovation whilst maintaining the personal touch that is key to quality service. It’s a difficult balance to strike. Technology has transformed our sector for the better, but it has also introduced a new risk: depersonalisation, which could be especially damaging in an industry built upon trust and a nuanced understanding of the individual.
Technology as an enabler
The advantages of technology and automation are undeniable. Online platforms allow users to compare rates and track application progress with ease, and AI has made credit assessments more robust by allowing lenders to predict risk with greater precision.
However, taking out a mortgage is arguably one of the most significant financial decisions a person will make, often involving a mix of financial and emotional considerations. These tools also have limitations. Algorithms can evaluate creditworthiness or predicting default risk with shocking accuracy, but they cannot offer empathy or reassurance to an anxious customer.
Separately, borrowers with unique financial situations—such as self-employed individuals or those with irregular income streams—require tailored solutions such as flexible underwriting criteria, bespoke repayment plans, or nuanced risk assessments. In these cases, human expertise is essential. Sometimes, a case requires a level of judgment and flexibility that technology alone may struggle to provide. Human advisers can offer personalised advice, interpret complex data in the context of the borrower’s unique circumstances, and provide reassurance during a process that may feel overwhelming.
The value of human connection
In our new digital era, the human element matters more than ever. Borrowers want to feel that their concerns are understood and their questions answered by someone who truly listens. Personal interactions help build trust, clarify complex terms, and provide guidance through a process that can often feel overwhelming.
Borrowers need assurance that they are making informed decisions, and this assurance often comes not from an app or chatbot, but from a conversation with a skilled advisor who can provide clear, personalised explanations. In fact, our research shows that only about a third (32%) of homeowners prefer communicating with lenders via mobile app chats, and in-person visits still hold appeal for 25% of homeowners.
Lenders can provide these meaningful interactions by combining technology with a personal touch. Advisers can leverage customer data to tailor conversations, addressing specific needs and building rapport right from the start. While technology plays a role in freeing up time for advisers by automating routine tasks and providing real-time insights into customer data, it cannot automate a human interaction.
For lenders, this human connection is more than just good customer service—it’s a strategic advantage. In fact, the FCA found that customers are likely to become more engaged with their lenders if communications are personal, relevant and highlight the benefit of making contact. Our research supports this, with 42% of borrowers believing that speaking on the phone is the most effective method to address queries about their mortgage.
A careful balancing act
The solution is balance. The most successful lenders will harness the power of technology while maintaining their commitment to customer-centricity. This requires a deliberate and thoughtful approach to integrating digital tools into the mortgage process.
To ensure technology enhances the borrower experience, rather than overshadowing it, digital platforms should focus on simplicity and accessibility. Intuitive interfaces that guide users through each step—whether it’s uploading documents or navigating the application process—are crucial. However, platforms should also include easy access to human advisors—whether via video consultations, or phone calls—for borrowers who need additional support.
Mortgage lending is an industry where trust is paramount and decisions carry significant weight, and the importance of human connection cannot be overstated. By combining cutting-edge technology with human empathy, lenders can foster stronger, long-term relationships with their customers. The mortgage industry’s technological transformation is undoubtedly exciting, but its true potential will be realised only when technology and people work together to serve the borrower.
Chris Little is chief revenue officer at Finova
