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Majority of mortgage leaders say AI will lead to job cuts

According to a new report from Arizent, the majority of technology leaders in the mortgage industry believe artificial intelligence will drive downsizing in the next three years.

Respondents, from managers to C-level executives, described the sector’s uneven relationship with technology in the new “AI-Based Decision-Making 2022” report. Of the 386 participants in the May survey, 42 mortgage executives from bank and non-bank lenders, credit unions, brokerages, insurers and managers described their company’s AI strategies, barriers to implementation and successes.

An overwhelming 49% of mortgage respondents said AI would slightly reduce the workforce of their businesses, while 20% said it would significantly reduce their payroll. On the contrary, 32% combined said the AI ​​would slightly or greatly increase their ranks.

The prediction does not bode well for the industry which is already laying off thousands of workers in response to the market’s downward spiral. Successful Mortgage Institutions a variety of roles cited a decades-long rise in interest rates, a reduction in the volume of mortgage loans and forecasts of a recession as the cause of the layoffs.

The AI ​​assessment is seemingly at odds with mortgage sponsors’ avowed reluctance to use AI and machine learning tools. In total, 78% of mortgage companies are not actively engaging in AI and machine learning products, 51% of companies are still building a business case for them, and 27% are exploring the tools. Siloed and insufficient data sets present the greatest barriers to implementation, according to 32 mortgage respondents. The industry’s difficult relationship with real estate data is evident in its assessment of automated valuation models, often accused of promoting racial prejudice.

Mortgage companies also struggle with a lack of skilled labor to implement complex hardware and software programs, according to the study. Of those same 32 respondents, 28% cited a lack of talent, although bankers, insurers and wealth managers struggling to adopt AI and ML cited talent shortages at a higher rate.

“A lack of expertise to integrate advanced technologies such as AI, ML, (Robotic Process Automation) with existing tools is the biggest challenge preventing us from adopting and enabling it,” said a anonymous mortgage sponsor in Arizent.

Mortgage companies also reported one of the best relationships with broader technology, with industry respondents reporting the highest satisfaction ratings with data democratization among financial verticals. Among mortgage industry leaders, 76% said their companies were very or extremely good at opening data access to employees, while 83% said they were good at opening data access to suppliers and to customers.

Forty-four percent of mortgage representatives said they direct technology resources toward fraud and risk management, an important goal amid near-epidemic levels of fraud and significant cybersecurity threats.

When it comes to managing production pipelines, 93% of mortgage companies use technology; 61% use a third-party or off-the-shelf industry-specific solution and 32% use either an in-house product or a custom product. Far behind them are 5% of companies who still use Excel or spreadsheets to manage organizations, and 2% who report using paper-based processes.

Dive into “AI-Driven Decision-Making 2022” to learn more about how leaders at mortgage companies and other financial services institutions are integrating, governing and securing AI and analytics. data to achieve internal and customer objectives.