Will your next home loan be completed exclusively online with no human contact? Home mortgage experts like Rob McLister believe that at some point, most people won't need a human touch to get a mortgage. McLister added that in the future, people won't want to talk to a human bank representative. They will prefer to receive better home loan interest rates by working with a chatbot from application to closing.
Starting in 2017, banks in the U.S., U.K., and Asia adopted mortgage lending chatbots that use artificial intelligence (AI) programming to answer questions and offer home loans. Canada has been slightly slower than other countries to introduce artificial intelligence into the home mortgage business. An AI-based chatbot is on the horizon for Canadians, however. TD and other banks are developing chatbots that will offer options for applying for, qualifying for, and even receiving a mortgage without talking to a human being or entering a bank branch.
What Are Online Banking and Mortgage Lending Chatbots?
Mobile and online banking programs aren't chatbots. Chatbots are sophisticated artificial intelligence programs that can interact with customers. Often, they have names. Emma is a chatbot installed by Singapore's OCBC Bank which began offering mortgage and home renovation loans in 2017. The experience satisfied nine out of 10 customers who used Emma to apply for a home loan with OCBC.
Customers may be more comfortable banking with a chatbot because, in recent years, digital-only banks have grown in popularity throughout Canada and worldwide. J.D. Power's 2019 Canadian Retail Banking Satisfaction Survey found that 47 percent of Canadian banking customers were "digital-centric," preferring online banking interaction, while 32 percent were "digital-only" customers. Digital-only customers did their banking only through mobile devices and computers.
Why Do Banks Want to Use AI Chatbots?
Kasisto is a New York-based company that develops chatbots and AI programs for banks in Canada and other nations. Company founder Zor Gorelov believes that chatbots have the potential to move beyond automation to being proactive with clients. Chatbots developed by Kasisto and similar companies learn with every customer interaction. The specific technology is conversational artificial intelligence. By working with hundreds and thousands of customers, a mortgage AI chatbot could eventually gain more information than even the most experienced human loan officer. A highly-proficient chatbot might eventually be able to proactively offer customers the right services at the right time, which can offer banks a leading edge in customer satisfaction.
Digital banking customers may be eager to work with chatbots for mortgages and other financial services. J.D. Power Canada's 2019 Retail Banking Advice Study found that nearly 60 percent of Canadian banking customers wanted more financial advice from their bank. According to Paul McAdam, J.D. Power's Senior Director of Banking Practice, Canadian banking customers wanted to receive financial advice through online or mobile channels, but only 10 percent got the advice they needed that way.