Despite the health and economic challenges caused by the COVID-19 pandemic, technology and digitization continues to drive consumer expectations and enable mortgage innovation.

Nearly 90% of banking and lending executives said that the pandemic is proving a powerful catalyst for digitization of their firm’s mortgage processes, and 85% describe their efforts at mortgage process digitization prior to COVID-19 as aggressive or very aggressive. 

Artificial intelligence (AI) is one of many important technology capabilities and trends to keep an eye on, this year and beyond. 

What is Artificial Intelligence and How Is It Impacting the Mortgage Industry?

Artificial Intelligence is a branch of computer science that utilizes advanced techniques—such as machine learning—to develop systems that can perform tasks normally requiring human intelligence.  AI tasks can include visual perception, speech recognition and different levels of decision making, helping us better understand events, automate decisions and take actions. 
 
Although seemingly straightforward, the number of capabilities underneath the umbrella of AI are vast, require numerous skill sets and can easily become a source of confusion for an organization.
 
In addition, there is still very few accepted AI standards for the mortgage industry.

Three Ways Mortgage Professionals Can Prepare Their Institutions for AI

As AI continues to evolve, mortgage companies wanting to embark on the journey to become an AI-enabled organization should focus on the following:

1. Formalize AI goals and define the organization’s strategy. 

It’s important to identify and gain consensus around the areas to mature and scale, as well as the timing. Create adaptable governance and risk management frameworks to both minimize risk and enable AI within the organization.

2. Don’t underestimate change management needs. 

Some employees still fear AI will replace them, while others embrace it and expect full democratization of the capability.  

3. Use a balanced portfolio approach to efficiently implement AI, maximizing value, and minimizing cost.

This requires collaboration and partnership across business units and IT teams. Without this, an organization could realize they implemented numerous different natural language platforms across the organization, all of which accomplish the same goal and none of which were leveraged for optimal costing or IT resource distribution.
 
Freddie Mac has been using AI to enhance existing financial models and increase efficiencies across numerous business processes.  As we look forward, we are testing different AI software as a service (SaaS), natural language opportunities and the combination of multiple emergent capabilities such as AI and blockchain.