In the mortgage industry, innovations appear with the same regularity that new housing ministers come into office, loudly advertised, often overhyped, and sometimes delivering even a fraction of what was promised.
Nearly a decade ago, robo-advice burst onto the scene, completely replacing brokers and ushering in a new era of algorithmic dominance. What is the reality? Robo-advisors have been good at crunching numbers and spotting anomalies in documents, but they never address a borrower's existential anxiety over the nuances of interest rates or “furlough-adjusted” income. It was hopeless. 
Next came API connectivity, a fintech darling that promised to unify platforms, CRMs, lenders, surveyors, and even carriers into a frictionless symphony of digital efficiency. Certainly, APIs have made some progress. Fraud checks are now smoother and data flows more freely. But the dream of a seamless end-to-end process remains just that: a dream.
While most borrowers are still required to submit physical documents, brokers continue to update keys and grapple with the quirks of incompatible systems. If you map the Mortgage API to a Tube map, it's likely to look more like Spaghetti Junction than the Elizabeth Line.
Enter Open Banking, which is being touted as the death knell for bank statements and payslips. It was supposed to offer instant decision-making and bespoke pricing, give borrowers a squeaky-clean transaction history, and penalize borrowers with suspicious Money4Drugz references in their accounts. The reality was overwhelming. Yes, financial institutions have gotten better at decoding and processing financial data, but consumer uptake of open banking remains abysmal.
Five years later, borrowers are still understandably cautious about sharing their bank account information, and the value chain has barely scratched the surface of its potential, let alone the broader opportunities within broader open finance. I've barely scratched the surface. As for blockchain, let's just say that most people in the mortgage industry know it exists, but only because someone insists on covering it at every conference. . The potential is there, but tangible benefits at a meaningful scale have yet to be seen.
And now: artificial intelligence
So here we are, with artificial intelligence emerging as the latest revolutionary promise. But does AI have a chance to break the cycle of over-promising and under-delivering? Is it a game-changer or just the next chapter in a long history of technology stalls?
AI feels…different. Unlike robo-advice and blockchain, AI isn’t just nibbling around the edges of the mortgage process. It permeates every aspect, from the borrower's first preliminary online inquiry to the counterparty's portfolio management. It's not just a tool, it's an ecosystem. The real question is not whether AI will change industries, but how deeply and how quickly.
Why AI can be successful
So why does it feel like AI may finally be able to do where its predecessors have stumbled? Three reasons stand out.
Comprehensive upgrade
APIs may have oiled the wheels and open banking reduced paperwork, but AI will transform the entire mortgage lifecycle. From streamlining affordability checks to flagging compliance issues in real-time, we deliver a level of integration and insight not possible with previous innovations.
instant impact
Blockchain may ultimately change the world, but it requires a complete overhaul of existing systems and is not a quick fix. In contrast, AI integrates neatly into current workflows and delivers immediate results. Faster processing times, fewer errors, and smarter underwriting aren't just promises. They are real.
become wiser
Unlike previous technologies, AI evolves. Learn, adapt, improve and keep pace with the market. This makes them uniquely suited to an industry as fluid and unpredictable as mortgage lending. It's no coincidence that AI is already integral to fraud detection, customer service, and even marketing.
temper expectations
Of course, don't get carried away. The technology industry thrives on hype cycles, and AI is no exception. A utopian (or dystopian, depending on your point of view) mortgage process is unlikely to materialize. Borrowers will still need human brokers for complex cases, and regulators will need to insist on transparency and address ethical concerns about bias. AI will not eliminate these challenges. It just gives you better tools to navigate them.
The mortgage industry is not immune to revolution, but most are not living up to the bill. However, we feel that AI could be an exception. The potential lies not in fancy promises, but in real-world applications. That means faster approvals, smarter risk assessments, and a smoother transition for everyone involved. AI will not replace, reinvent, or revolutionize industries; it will simply accelerate them.
As with any revolution, success depends on knowing when to embrace it and when to remain skeptical. AI will not replace humans in mortgage lending, but it will replace the clunky and outdated manual processes we have relied on for years. And who knows? Perhaps this time the technological revolution will actually become a reality.
Alex Beavis is a consultant at LHV Bank
