Digital lender UBank has partnered with an artificial intelligence company to create the world’s first online home loan application assistant it says will be able to speak directly with users to solve all their mortgage issues.
Last week, Kenneth Hayne QC handed down his royal commission final report that recommended banning banks from paying trail commissions to mortgage brokers from mid-next year. Instead, the borrower will likely be required to pay an upfront fee for the service.
UBank, a subsidiary of NAB, doesn’t pay mortgage brokers, but its new robot-like home loan aid gives a glimpse into how the service could be provided in the future. Many commentators are speculating only the wealthy will be able to afford a broker, while regular Aussies will have to rely on an automated service.
The artificial loan aid, named Mia (My Interactive Assistant) and powered by AI start-up FaceMe, will speak directly to customers through a desktop or smartphone advising on questions such as what’s a variable rate to what classifies as an expense, the bank says.
“Customers will be able to speak to Mia day and night, and she will answer more than 300 of the most common questions customers have about the home loan application journey so they will have a smarter, more connected experience,” said UBank.
Chief executive Lee Hatton told news.com.au UBank would provide an emotional connection to a digital experience.
“We see Mia as a really nice evolution, especially in the home loan experience where you can create an emotional connection and have your questions answered and do it all in the comfort of your own home,” she said.
“It’s a really nice new technology powered by artificial intelligence and a chance to really help customers make better decisions.
“People will be able to fill out their home loan applications far more quickly and accurately because they’ve got the right information.”
FaceMe chief executive Danny Tomsett said the royal commission into the financial industry highlighted the need for technology to provide alternative solutions for the sector.
“How that can help us solve millions of challenges around trust and provide a consistent experience to every person no matter what the wealth,” he told news.com.au.
“What’s really exciting about this technology is it’s an incredibly smart and intelligent Adviser available to everyone, giving fair advice without personal bias, influence and motivation around commissions or other things.”
Corelogic global head of technology Greg Dickason was critical of Commissioner Hayne’s advice to scrap trail commissions.
And although he had not seen the technology being adopted by UBank, he was sceptical about an automated advice platform replacing some of the service typically provided by a broker.
“The mortgage broker provides a vital service at the moment, which is helping people navigate the highly complex world of finding a mortgage that is suitable for their personal circumstances,” he told news.com.au.
“Digital assistance can help, but I don’t think the digital assistance will be ready to replace the full service that the mortgage broker provides.”
Mr Dickason did say a digital approach was inevitable, particularly after the grievances towards financial services aired during the royal commission.
“Something’s got to step into the bridge if mortgage brokers disappear, and it’s only going to be intelligent digital approaches that can possibly help,” he said.
“You’re definitely going to see a process where it’s digital for everybody except for the people who are prepared to and can afford to pay a financial planner and a mortgage broker.
“It’s going to absolutely accelerate the digitalisation of how we find things, and banks are going to double down their investments, especially the smaller banks which don’t have a branch footprint.”
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