Home Property Finance & InvestmentMortgages How can AI help us understand our mortgage?

How can AI help us understand our mortgage?

11th Mar 24 12:58 pm

According to exclusive data from Eligible, the UK’s first platform used by banks and lenders to provide tailored financial support to their customers, almost 40% of mortgage holders describe payments as their most significant cause of financial-related anxiety.

This comes as fresh polling data from Pluxee UK has found that more than half of UK employees are embarrassed about their level of financial literacy.

According to Zahra Hassan, co-founder of Eligible, lenders across the country ought to be embracing a proactive strategy aimed at tailoring financial support towards underserved customers.

Hassan maintains that a significant cause behind the financial-related stress experienced by so many is a lack of quality, two-way communication between lenders and customers. According to Eligible’s nationally representative survey, 9% of mortgage holders don’t understand the terms of their mortgage as they do not communicate with their lender.

Moreover, 8% of banking customers have now encountered permanent implications to their spending and borrowing activity due to not having enough financial knowledge on their situation.

According to Eligible, the onus is increasingly shifting onto banks to provide tailored financial support and proactive real-time communication with their customers.

Developments in technology, particularly in the field of artificial intelligence, can be utilised by financial institutions to identify at-risk customers and generate personalised support adapted to their unique situation. Artificial intelligence also has the ability to deconstruct and demystify concepts that may leave customers feeling disenfranchised, with 6% of Brits disregarding bank letters because they do not understand the financial language used, this ought to become a priority for lenders.

Zahra Hassan, co-founder of Eligible, said, “The fundamental problem is that mortgages are a financial product that customers take out only once every 3-5 years. This means that they aren’t regularly engaging with their mortgage and aren’t in the loop of what all their options are.

“In a broader sense, rising interest rates, coupled with increased energy and living costs, heighten vulnerability to default. However, the key factor that pushes someone from financial strain to actual default is their lack of awareness about the array of options that their bank could have offered to temporarily ease their financial burden, particularly on their largest financial obligation – their mortgage.

“What’s needed – and what we’re doing at Eligible – is an active two-way dialogue, and AI-powered systems like Eligible facilitate this by initiating interactions with customers and monitoring their responses to gather insights.

“For instance, we proactively send educational content to customers to assess their anxiety levels and their understanding of their current financial products. Based on this information, we can fine-tune our approach by crafting more personalised educational content and adjusting our tone to be softer, supportive, and empathetic. This way, borrowers can better appreciate that lenders are here to assist them.”

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