Technology is taking over: Are loan officers on the way out?

Buzzwords like machine learning and automation are making the rounds in almost all industries. By now, you may have read an article or two about how machines will replace dozens of jobs over the next decade.

Compared to other countries like the UK and Japan, U.S. workers may have extra reason to worry, Alanna Petroff reported on behalf of CNN Tech in 2017. Up to 38 percent of American jobs could be replaced by robots, rising closer to 61 percent within the finance industry.

That we are increasing our machine capabilities so rapidly is an achievement worth applauding. But the fear surrounding this shift has gotten out of control. AI and machine learning breakthroughs in the past five years are turning heads and changing lives. In 2017, University of Cincinnati scientists found that they could use the same AI (artificial intelligence) employed by fighter pilots to pinpoint the success of bipolar disorder treatment. Even in light of these historic technological advancements, we're still not even close to replacing all our human workers.

Where technology fails, loan officers excel

Any 5-year-old could hear what someone is saying, understand it, and repeat back the words or formulate their own response. And yet, most of us would agree that smartphones are still having a hard time completing this simple task. Smartphone manufacturers and software companies are still working to perfect this voice recognition feature. Likewise, almost any teenager can learn to drive a car. But after seven years, Tesla and Google are still developing the technology.

Yes, we're still waiting for the day when we will see a self-driving car or iPhone function independently, without the help of a driver or user. And the mortgage sector is no exception. To call mortgage complex would be an understatement. Working as a loan officer requires deep, critical thinking which can't be found through a Google search or on an app. Multiple people are required to compile thousands of data points to help select the appropriate loan for the borrower, all the while assessing the borrower's ability to repay the chosen loan reflected by their individual finances. All this and more human tasks are necessary to bring just one loan to closing day.

Borrowers rely on human loan officers to:

• Advocate to get their loan approved.

• Help them break down complicated paperwork and guidelines.

• Help them broker the loan deal so that it's most beneficial to them.

Wasn't it only 10 years ago, at a time when online home search engines like Redfin and Zillow were introduced, when we were worried about our realtors being replaced by robots too? The danger was that if homebuyers were able to find whatever house they were looking for online, they might choose to buy or sell alone to avoid paying commission. But soon enough, many homebuyers discovered that, while convenient, home search engines were still limited. Like a loan officer, a realtor's guidance remains invaluable to help a buyer weed through the many housing options, interpret property evaluations, and negotiate for the home they want. Nowadays, successful realtors are using these industry tech developments to better serve their clients and advertise their businesses.

If only getting a home loan was as simple as calculating a credit score and assigning a borrower to the right loan product, it could be automated with no human interaction needed. If only you could get a mortgage at the push of a button, then a machine could do it. Yet that's not the reality of homeownership today.

When loan officers embrace technology, customer satisfaction improves

Human capital, particularly in the mortgage sector, is costly. It may take years and serious funding before we can create programs able to manage and process the amount of data the typical loan officer deals with on any given day. Apple, Google, and Facebook put billions of dollars into the people hired to create their automated and voice recognition technologies. The mortgage sector is not “robot-proof.” But it is still light years behind the tech companies that have replaced their workers with robots.

What stands out about the mortgage industry is this:

• We are in the ideal place to start using simplified technologies and automations that can make mortgage a self-serve process.

• New tech tools can be used to improve mortgage processing speed and efficiency, delegating the mundane tasks once handled by a loan officer to a machine.

• For many mortgage lenders, most of the mortgage process is still manual and desperately needs a tech reboot.

Can mortgage lenders learn from the tech heavy-hitters like Amazon, Apple, and Google? Absolutely. The Financial Brand's 2017 report “Improving Customer Experience in Banking” revealed that many financial companies today focus heavily on technology and speed without placing enough emphasis on customer experience. More financial companies want to enhance their machine learning and digital engagement. While customer service remains a top-three priority, most financial institutions have not gone so far as to create a customer experience plan. Looking to the big companies like Google and Amazon is key. Even financial customers want to have a good experience and work with a trustworthy company. Even our mortgage customers want a lender that makes their lives — and buying a house — easier.

LoanFly works so well for our loan officers and our borrowers because it makes mortgage fast, friendly, and easy. Simultaneously, LoanFly offers a connection to a real person “as you like it.” This personalization isn't something we're willing to sacrifice. Even for the sake of technology. “Cornerstone Cares” is one of our company's core values. It is a principle we practice daily.

It's humbling to see how sticking by our values can coexist with our company's use of technology, as Cornerstone's CEO Marc Laird told IMFnews in 2017. During the recent disasters of Hurricane Harvey in Houston and Irma in Florida, where so many of our team members were affected, our tech systems stayed up even when our corporate office in Houston closed for two weeks due to flooding. Many of our dedicated team members chose to continue working to serve our borrowers. This is the personal touch that even the newest technology can't replicate.

The mortgage industry may be at a crossroads where the human touch meets technology. But a skilled loan officer can survive by remembering two things:

1. First, utilize all the technologies that are available to make your job easier.

2. Second, seek out a lender to work with that is willing to leverage and invest in these technologies on your behalf.

Interestingly, a lender looking out for its people is also what borrowers are looking for. According to the 2017 Global Distribution & Marketing Consumer Study by Accenture Consulting, 78 percent of people would be happy to bank with Google or Amazon, the tech companies that focus heavily on customer service and innovation. Digital transformation is important to help lenders and financial institutions perform better, as long as it strengthens the customer connection.