January 15, 2018
Sid Probstein, CTO & VP of Solution Delivery for AI Foundry, shares
8 Technology Predictions in Mortgages & Banking for 2018.
Our own Sid Probstein looks into his crystal ball at what new IT technologies are most likely to shape the banking/mortgages marketplace in the next 12 months. He foresees a mix of imagination and innovation becoming reality:
- In 2018, 1 million of the estimated 10 million mortgage closings will be fully digital or completed electronically. Lenders will provide instructions to borrowers on how to close from the comfort of their own home using their laptop, tablet, or phone and technology that leverages document sharing, video calls, and more.
- Applying for a loan in 2018? We’ll bet you have a 50:50 chance of encountering a self-service mortgage portal. We estimate the number of online portals used will triple and consumers will benefit by quickly and easily checking the status of their mortgage and documents required for the application. Most portals will allow you to check the status using a virtual assistant like Alexa. We’ll even take this a step further. Have a home with equity? Chances are Alexa will offer you a HELOC, or personal loan.
- In 2018, we predict that at least one major mortgage originator will land on the front page of The New York Times for non-compliance with the Home Mortgage Disclosure Act (HMDA). The enhanced reporting and data collection requirements of HMDA will require banks to have increased rigor around data collection and accuracy to remain compliant and their need for AI technology to process data will increase.
- 2018 will task organizations with solving a complex problem with an AI system. Missing documents from a borrower’s loan application? AI will help to solve that. Trying to figure out a borrower’s real income? AI will help provide you an income score.
- 2018 will trend toward zero-day certainty, we predict that 9 out of 10 times borrowers are going to immediately be quoted a rate and be approved for the rate should they meet the criteria. Banking staff will see an increase in the demand of paperwork and will rely on AI technology to help process the loan applications.
- In 2018 there will be no need to go to the bank and talk to a teller. Customers will simply pull up the teller through their banking app on their phone and handle transactions from the comfort of their couch.
- We expect that 80% of banks will explore new methods of pricing. Banks will create a 360-degree view of the customer including the standard FICO and Beacon scores, social media, and other data as indicators in their ability to repay a loan.
- Banks will recognize that customers have individual needs and one size doesn’t fit all. We predict that a “mortgage menu” will be born in 2018. We anticipate that banks will start to accommodate borrowers with shorter loan term requirements. For example, if a customer in their mid-60’s is refinancing a 30-year mortgage at year 22, a bank may offer them an 8-year mortgage rather than starting a new 30-year term.