How AI is disrupting the mortgage workforce

June 20, 2024 11:11 AM

The mortgage workforce possesses the skills and know-how to move the industry ahead, but some pockets of concern surround whether they are fully up to the task currently with technology, according to new survey results.

Some professionals hit by waves of layoffs in the mortgage industry can take heart that several businesses intend to hire in 2024, but they and their leaders also understand technology is advancing at a rapid clip. Training and upskilling staff in order to best take advantage of artificial intelligence's potential takes on greater importance in particular, but tried-and-true communication and leadership skills can't be left by the wayside either, the data tells us.

Research on current workplace trends was conducted by Arizent, parent company of National Mortgage News, who surveyed 550 individuals in seven financial services segments. The total included 55 mortgage professionals involved in leadership or hiring decisions at their companies. Respondents answered questions revolving around a range of topics, such as the skills of their peers to their work-from-home status.

A technology skill gap exists, and management shows concern

More than half the mortgage workforce, or 62%, acknowledges there is at least a moderate gap currently in keeping up with changes in technology, especially artificial intelligence. Several home lending firms are already using AI copilots to assist their staff, while a few have even rolled out chatbots to serve consumers. Artificial intelligence thus far appears to have the most impact in underwriting.

But in what could be potentially concerning to rank-and-file employees, decision makers are more inclined to see tech skills coming up short, with 41% ranking it as significant and 34% moderate. The decision makers subset comprised 128 members of leadership, strategy and development teams across all seven industries surveyed by Arizent, including mortgage.

AI appears set to reinvent the mortgage job

For a majority of mortgage employees, the growth of technology means their jobs will take on a different look in the coming years. AI looks to change how the workforce approaches their tasks, with over three-quarters of respondents finding it somewhat likely they will need to realign their job to meet demands. But over 10% are still unsure about how, or if, they will be affected.

Companies are willing to train and upskill staff

In a sign of where AI and other technology is headed in the mortgage industry, more than half of companies plan to meet changes with additional training to help staff become proficient on new tools. Meanwhile, over one-third will rely on outside vendors to do some of the heavy tech lifting for them.

As mortgage jobs change, more than 30% say their businesses will add new staff to meet demands.

The good news — mortgage employees think highly of colleagues

Regardless of whether or not the skills-gap angst is warranted, mortgage professionals seem overwhelmingly confident their colleagues have the talent to learn and perform their jobs adequately. Nine out of 10 respondents expressed confidence about their in-house teams, with an almost equal cohort sharing the same opinion about peers at third-party providers and contractors. But only about half went as far to say they were "very confident."

But in what maybe should be a worrying sign for the latter group, 15% expressed doubt about the skills of the broader workforce outside their company. The "not very confident" measure for third-party workers in the mortgage industry surpassed the share in any other segment of financial services, none of which exceeded 10%.

Hiring is on the horizon

While layoffs are still making headlines, some companies also expect to hire after a challenging two-year stretch of diminishing originations. More than 70% expect to add originators over the next 24 months, while slightly less than half said they will need loan processors.

Caution, though, is the theme for some, as rate volatility and hesitant consumers continue to impact the housing market.

"Our plan is to hold steady and see how the market changes in order to respond appropriately," an executive said in an anonymous comment.

Interestingly, despite the emphasis on artificial intelligence, less than a quarter of respondents expect new hires to include information technology professionals or data scientists.

What the industry values most

While technology clearly has a starring role in the future of the mortgage industry, it is no replacement for the traits long valued throughout most businesses. For professionals looking to move forward and driving the industry ahead along with them, communication and interest in their field is essential.

Respondents were asked to rank eight characteristics in order from highest to lowest in importance. As they did across financial services overall, interpersonal and communication skills and industry-specific knowledge were most important for the mortgage industry. Also, over half put leadership skills near the top.

Remote work has become the norm

Four years after Covid-19 sent employees across the country home, a vast majority of the mortgage industry is still working remotely, at least one day a week. Only 16% of companies were back in their offices full time, with the majority operating on a hybrid basis either temporarily or permanently.

With the ability to work remotely facilitated by technology, another 16% said they had pivoted to fully remote operations permanently.