Alexa, get me a mortgage

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Virtual assistants such as Amazon’s Alexa can tell the customers of a select few banks their checking account balances, but could she one day help them secure a mortgage?

It’s a scenario that some banks are already contemplating, as voice-based assistants get used in more and more aspects of the financial services industry and life in general.

“We see a lot of opportunities for conversational interfaces, and we have a stack of ideas we are experimenting with now,” said Patrick Kelly, assistant vice president for emerging technology at USAA in San Antonio, one of the early banks to offer customers the ability to get basic account information from Alexa.

“There are lots of opportunities with mortgages," Kelly said. "By their very nature they are a complicated, multistep process for someone to engage in.”

One thing USAA is thinking about is how voice-based virtual assistants could take steps out of the mortgage application process. For example, a customer could share pertinent financial information an assistant could then input into the proper places in a digital document, Kelly said. Or a customer could ask about certain aspects of a home loan without having to sift through much of the "bankspeak," as Kelly put it, found in typical mortgage documents.

“There’s a lot of friction points in the process,” Kelly said. “If we can eliminate steps or make something easier to understand, then you’ve created a better experience.”

As bank customers in general become more comfortable with voice-interactive virtual assistants to conduct a wide range of financial transactions, mortgages will be a natural fit, said Gareth Gaston, head of omnichannel banking at U.S. Bank, which recently began letting letting its customers interact with the bank through Alexa.

“Voice [interactions] will become an increasing part of a consumer’s everyday life,” he said. “It’s not about just adding another channel, but taking a massive step in how customer interactions happen. Mortgage applications are a great example — [a virtual assistant] can record some of that basic information; you can also digitize some more of the back-end work, too.”

Technology will not completely replace human mortgage advisers, Gaston noted, but rather “augment their capability; and it will allow [customers] to self-serve in some areas, or help them make their own decisions in conjunction with an adviser.”

Even before the mortgage process is started, voice-based services could be used to help consumers with information-gathering or financial literacy, said Amory Booher, senior vice president of risk technology and execution at BBVA Compass in Birmingham, Ala.

“New homebuyers, for instance, are educating themselves on the process as it is happening, so there is a need to inform,” Booher said. “[Artificial intelligence] could provide a customer-specific response to borrowers asking questions like, ‘What is an APR?’ with an explanation of APR and also specific insight into their loan and their APR. Many other products and services start off a conversation with a chatbot and then transition to a person as the conversation gets more complicated or involved. Couple this capability with open architecture and services, and information could be pushed via personal assistants like [Apple's] Siri.”

If you think of a personal assistant “more broadly than within the context of software that can communicate verbally,” it opens it up to other areas in the mortgage process, Booher added.

“Imagine the scenario where a personal assistant knows the spending behavior or financial stability of a customer,” Booher said. “The virtual assistant could provide the customer with additional insight to guide them toward a better mortgage decision or help them manage their responsibilities during the origination process.”

This more consultative approach is likely how the technology could really improve the mortgage process for customers, said Roberto Hernandez, principal at PwC.

“Right now, the information you can get [from banks' virtual assistants] is the same you can get from quickly going to the app: ‘What’s my balance’ and things like that,” he said. “But if you can make that into, ‘Alexa, what’s the optimal loan for that house I found online that I’m interested in,’ or ‘Hey, can we start the mortgage application process,’ then you are really leveraging AI and changing the experience.”

Hernandez said it is imperative for banks to get to that point with mortgages — and other more complicated financial products — as customers become more comfortable relying on voice-interactive virtual assistants. Indeed, some institutions are already on this path: The nonbank wholesale lender AFR Wholesale recently announced a partnership with Amazon to integrate its origination portal with Alexa.

Like Gaston, Hernandez said technology like Alexa can be used to complement loan officers.

“Loan officers add a tremendous amount of value, but much of what they do you can leverage technology for,” he said. “So if a customer is just looking for the status of an application, they don’t need to chase down the loan officer, they can just ask [the assistant]. Then later when they want to speak with someone for help through some of the more complicated parts of the product, they can do that.“

In the end, the ways in which banks can integrate voice-interactive services into the mortgage process will not be dictated just by how advanced the technology can evolve, but by regulatory standards as well, said USAA’s Kelly.

“The mortgage process is very document-heavy, but that’s what regulators want; they want to see all this information documented,” he said. How much of that documentation can be transmitted through a device like Alexa “is something the industry will have to sit down and discuss with regulators."

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Mortgages Machine learning Customer data Mobile technology Customer experience Analytics USAA U.S. Bank BBVA Amazon Apple