AI may streamline processes, but adviser expertise remains essential, FCA executive says
Mortgage brokers and advisers remain key to helping more people in Britain access home ownership, according to the Financial Conduct Authority (FCA).
David Geale (pictured top), permanent executive director for payments and digital finance at the FCA, discussed the regulator’s perspective during the latest FT Adviser Margin Notes videocast and outlined why the FCA is examining the future direction of mortgage lending in the UK.
Geale also highlighted the potential for technology and artificial intelligence (AI) to assist both lenders and brokers in their decision-making processes.
“We see AI developing as a tool, and that can be used in different ways,” he said. “It can be used to help some people with their selection. It can help people in terms learning and help to identify customers who need support.”
Geale noted that while advances in AI and technology may help streamline aspects of the mortgage process, the expertise of independent advisers remains essential for providing tailored recommendations to prospective homeowners.
“We still think there is a hugely important role for advice, whether that’s face-to-face, over the phone or other ways,” he told FT Adviser.
The FCA’s latest discussion paper, part of its ongoing Mortgage Rule Review, seeks to “open the debate” on how to improve access to home ownership. This follows a recent policy statement in which the FCA removed the automatic advice requirement for regulated mortgage transactions involving interactive dialogue between firms and clients. Stakeholders have until end of next week to respond to the current discussion paper.
A recent research from Nottingham Building Society found that more than three in four mortgage brokers support the FCA’s mortgage rule review. Many brokers see the review as a chance to modernise lending criteria, especially to improve access for borrowers with non-standard employment, complex income, or unconventional household arrangements.
According to Geale, around 99% of mortgages that were taken out since 2014 are actually being paid, indicating that lenders are generally acting responsibly. He noted that the rules guiding lenders’ decisions have been in place since 2014, but the market has evolved considerably.
The FCA has observed increased demand for flexible mortgage products, with Geale pointing out that “just under 40% of people looking to buy but struggling to do so.” Groups most affected include first-time buyers, the self-employed, and those with irregular incomes or seeking to borrow later in life.
Geale suggested that greater flexibility in affordability assessments—such as considering rental payment history or introducing hybrid mortgage products—could be explored. However, he cautioned: “With additional flexibility comes additional risk... some people may not be able to afford it, but we think the support is there for them in a way that it wasn’t before.”
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