Banks need to consider a raft of technologies outside the financial services sector if they are to truly deliver the speed and efficiency that customers now demand in the mortgage application process.
According to RFi Group managing director of consulting, Alan Shields (pictured), the industry needs to be open to technologies such as chatbots, messaging apps and even Facebook.
"You have to invest in technology that people are comfortable in using and that is often outside financial services," Shields told a captive audience at RFI Group's recent Australian Mortgage Innovation Summit.
"These expectations are being formed in businesses such as the retailers. Therefore, you need to bring those technologies to banking."
He cited his own expediencies of using technology in sectors such as the utilities and airlines industry. For example, using chatbots to make bookings through JetStar. "We know people now use use WhatsApp, WeChat and Facebook messaging."
In terms of consumer acceptance of these technologies, RFi Group research revealed that one in four people were comfortable with using a chatbot for their banking needs.
Pepper and machine learning
Shields said several banks around the world are already embracing such technologies.
"If you told me two years ago that big banks would be using Facebook messaging I would have laughed. Now banks are starting to use these technologies."
DBS Singapore rolled out Facebook messaging for its customers as recently as in December 2016 while Barclays Bank already uses the technology. While the bulk of its customers asked for where the nearest bank branch was, Shields said it was “baby steps” and this technology will bring benefits to other parts of its business.
Big data and machine learning can also be used in the mortgage application process by being able to pre-populate background information in mortgage applications.
According to Shields, the next step to technology innovation will be cognitive computing in the form of robots. This type of technology has already been embraced by Japan's Mizuho Financial Group.
The bank now uses SoftBank Group's Pepper robot in its branch in Tokyo. Pepper can understand human emotions and even talk to customers in different languages. The robot can provide basic information as well as information on discounts.
Shields questioned whether this technology would be welcomed in Australia but it is an idea to be considered.