As AI evolves, where does advice add value?

In the first article in this series, I suggested that before brokers worry about AI, they should ask a much simpler question: what problem are they actually trying to solve? In the second, I looked at how technology could change the adviser role, shifting time away from administration and process towards judgement, relationships and client outcomes.

For this final piece, I want to look at a question that perhaps receives less attention, but may prove just as important over the coming years: what happens when lenders use the same technology to get closer to customers themselves?

Because while much of our community conversation might focus on AI’s impact/benefits on advisers, lenders are investing heavily in technology, and in many cases they are doing so on a scale that most advisory firms could never hope to match.

The technology race is already underway
The future impact of AI is often discussed as though it is something that sits just over the horizon, but the reality is many lenders are already using increasingly sophisticated systems throughout the mortgage process.

Application processing, document verification, affordability assessment, case triage and underwriting support have all become faster and more automated than even a few years ago. Customers increasingly expect quicker decisions, better communication and greater transparency, and lenders have responded by investing heavily to meet those expectations.

The result is a mortgage journey that is becoming more efficient, more streamlined and, in many cases, more accessible. That is good news for borrowers. However, it also raises important questions for the advisory market.

What lenders are actually trying to do
The goal is not simply to digitise an existing process. The ambition of some lenders is to use data to anticipate customer need before it arises. A lender who holds a customer's current account, savings and mortgage can see when a fixed rate is approaching expiry, when income has risen, when spending patterns suggest a move might be coming, and when a customer is beginning to research properties online.

That data advantage, combined with a well-timed push notification or personalised offer, allows a lender to intercept a remortgage or purchase conversation before a customer has thought about picking up the phone to their adviser.

Where does this leave advisers?
The honest answer is that it puts significant pressure on the parts of broking that are purely transactional. If a customer with a straightforward employed income, a single property, and a standard repayment mortgage can secure a competitive product in fifteen minutes through their bank's app, the value proposition of a broker who simply sources and submits that application is weak. That segment of the market is genuinely at risk of disintermediation over the medium term.

However, the more complex the case, the weaker the lender's direct proposition becomes. Self-employed borrowers, portfolio landlords, people with adverse credit, later life lending, complex income structures, expatriates, and clients with multiple competing priorities are exactly the cases where a single lender's algorithm struggles and where human judgement, whole-of-market access, and genuine advice add irreplaceable value.

We should never forget the market does not consist only of straightforward cases: the FCA's own data consistently shows that a substantial proportion of mortgage transactions involve complexity that falls outside automated decisioning comfort zones.

The most serious structural challenge however is data. A lender that holds a customer's banking relationship has a longitudinal view of their financial life. A broker could typically only see a client at a point in time, every two, three or five years when a product matures for example. Unless brokers invest in maintaining ongoing relationships through client management tools, regular reviews, and proactive contact strategies, the lender's data advantage compounds over time.

If the process becomes easier, where does value sit?
Historically, one of the key benefits advisers provided was helping clients navigate complexity. Finding products, understanding criteria and guiding customers through lender processes all formed an important part of the proposition. Technology is changing some of that.

That does not remove the need for advice, but it does mean advisers need to think carefully about where their value is created. The reality is if technology makes simple cases simpler, then the differentiator is unlikely to be access to information alone. Information will become easier for everyone to obtain.

The areas technology struggles to replicate
One of the themes running through this series has been that AI works best when dealing with structure, repetition and data. People of course are somewhat different.

Technology can provide updates. It can process information. It can identify patterns. What it cannot easily do is reassure a nervous first-time buyer, manage expectations during a difficult transaction, or provide confidence when circumstances suddenly change. Those remain fundamentally human strengths.

There is sometimes an assumption that greater use of technology automatically weakens relationships. I am not convinced that will be the case. In fact, if AI takes away more of the administrative burden, advisers may have more time to spend on the areas clients value most. Understanding long-term goals, maintaining regular contact and providing ongoing guidance could become increasingly important differentiators.

Looking beyond the technology itself
The purpose of this series has never been to predict exactly what the mortgage market will look like three years from now. Nobody has that answer. What we can say with some confidence is that technology will continue to influence both lenders and advisers, and the businesses which benefit most are likely to be those focusing less on the technology itself and more on how it supports the client experience.

The discussion should not be about whether AI replaces advisers, because I do not believe that is the most important question. The more relevant question is how advisers choose to work alongside it, how lenders choose to deploy it, and where value is created as a result. Those are the questions that will shape the next chapter of our market.