Is it possible for the mortgage process to be completely automated?

The mortgage process can be entirely automated, but there are obstacles preventing us from adopting it today.

Banks are responsible for conducting essential verifications such as credit checks, background checks (KYC), and PEP and sanctions screening. In addition, they evaluate affordability. However, many of these checks will be conducted by mortgage consultants in the mortgage application process.

The concept of a reusable identity, credit inquiry, and affordability information that can be shared through a distributor channel will streamline the mortgage application process. If banks are able to accept the compliance of such a system, it will result in the establishment of a faster mortgage process and a substantial reduction in approval times.

The mortgage approval process is becoming increasingly streamlined as technology continues to advance. For instance, bank statements are now shared via open banking, and technology can analyze your cash outflow for six months and project your finances up to seventy-two months into the future.

All of this is being automated, making information accessible with a single click. Some providers in the UK market automate even payslips today, so there is no need to supply much information.

We will see transformative technological and legal changes, but it will take time because we have a decades-old system, despite the fact that we are heading towards much more streamlined procedures. Initially, there will be new hazards, and the changes will necessitate a great deal of learning. Inevitably, fraudsters will attempt to scam the system, so we must stay vigilant. A review of government policy may also be required to steer this in the correct direction.

Fintech and mortgage industries have tremendous potential for AI. It is believed that the use of visual contracts is a particularly promising application. Frequently, it can be difficult for the average individual to comprehend the technical language and extensive documentation of their mortgage terms. With the aid of AI, these contracts can be transformed into more comprehensible visual representations. In addition, AI is capable of analyzing various mortgage products and recommending the optimal option based on the customer’s unique circumstances.

Imagine a contract that is interactive, rather than relying solely on advisors. You can interact with your mortgage offer and ask the AI additional questions to determine if it meets your requirements. 

Certainly, technology can play a role in coordinating the mortgage process’s various constituents. It is essential to observe, however, that this coordination should be accomplished decentrally. Tight integration can result in an increase in complexity and expense.

Decentralized coordination makes compliance and risk management more difficult. For example, if a bank relies on a shared identity that comes from an external source, the bank would have to accept the identity at face value, potentially exposing them to risks if the borrower is subject to PEPs and sanctions. In such situations, coordination between stakeholders is essential, and modifications to the law may be necessary to effectively manage such risks.

In conclusion, the improved journey could yield financial and management advantages for all of these parties. By streamlining the processes, time and money will be saved. Additionally, the number of mortgage applications will increase, resulting in an improved market for everyone.

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