AI vs. advice – what’s next for financial services?

To explore this further, let’s look at the results of our H1 2025 Mortgage Lender Benchmark. We asked brokers how they’re approaching AI, and how comfortable they are with AI playing a role in the client journey. While this data focuses on the mortgage sector, the overall findings provide useful insights for the wider financial services industry.

Broker adoption still in early stages

First and foremost, the findings show that most brokers are hesitant to bring AI into regulated advice. Despite other industries embracing the technology with open arms, only 12.9% of brokers say they’re actively using AI tools when advising clients. Given their commitment to doing right by clients, not to mention meet FCA standards, it’s unsurprising that brokers are hesitant to use the technology in this way. And it’s likely that this reluctance isn’t unique to mortgages.

However, that doesn’t mean that the door is fully shut. 28.0% of brokers say they’re planning to explore AI soon, with 18.6% currently experimenting. As we all know, the mortgage market is constantly evolving – and it appears some brokers see AI as a natural part of that change

But as is often the case in financial services, brokers are sometimes seen as creatures of habit – and the findings arguably support this. 40.5% have no plans to adopt AI at all, clearly reinforcing the sector’s resistance to fully embracing the technology. One broker even said that their top concern for the mortgage market in 2025 was how AI might be seen as being easy to replace the human adviser.

If you think about it, this comment throws up a good point. Losing the human touch is a potential drawback of AI in all industries – not just financial services.

Perceived impact of AI

With brokers largely steering clear of AI – or just dipping their toes in for now – we also asked them how they believe AI will influence mortgage advice over the next three years. The responses give some interesting insight. Many brokers recognise that the technology has its place, but feel it will be far more valuable behind the scenes than in front of clients.

38.4% of brokers said that AI will have a moderate impact, mainly by streamlining administrative tasks such as paperwork and compliance. So perhaps it’s more about losing the human touch of advice that brokers are most nervous about – rather than AI itself. This theory is somewhat backed up by the next finding – only 18.2% think the technology will really boost productivity when it comes to delivering advice.

Meanwhile, 18.9% expect minimal impact overall, and 11.9% even suggested that AI could reduce the relevance of brokers in the mortgage process. Overall, these responses give the impression that while AI may help in some areas, brokers still see advice as a deeply human interaction that can’t be replaced by a computer.

Divided comfort levels with AI in lending

With brokers seeing AI as more of a ‘support tool’ than an ‘advice tool’, how do they feel about AI playing a part in lending decisions? The majority (40%) expressed discomfort, suggesting a general unease with AI’s growing influence. One broker specifically raised concerns about the increased presence of AI going too far and automating too much for a formal mortgage offer or decision in principle.

Again, you can see the point being made here. As a broker, you might ask – how can AI recognise cases where a more common sense approach is needed? Another also questioned how we can sense check AI, saying that it sometimes comes up with ‘strange things that are not true’. These points highlight issues that aren’t unique to mortgage lending. They will be familiar to anyone working with automated investment or underwriting tools.

But it wasn’t all one way traffic. 29.7% said they were comfortable with AI’s role in lending decisions, while 24.7% felt neutral. The results support the earlier findings that these brokers seem fine with AI helping out behind the scenes – as long as it doesn’t impact the human side of advice.

AI more favoured to operational areas

With that in mind, we also asked brokers how AI could add most value. And once again, operational areas were the most favoured. Nearly 60% of brokers said it could help speed up applications, and a similar number saw potential in automating compliance and paperwork. Meanwhile, about a third said it could enhance client communications.

And yet again, the results reinforce the idea that brokers believe advising clients is a job best left to them. Just 26.9% thought it could help identify the best mortgage products, and just 18.1% saw it as a tool for reducing bias in lending decisions.

Overall, brokers are resoundingly telling us that AI is best suited to supporting, not replacing, the mortgage advice process. This mindset is likely shared across the wider financial services industry, where advisers still see their expertise and ‘human touch’ as invaluable.

Trust and transparency remain key barriers

What about the risks of AI adoption? 56.4% of brokers felt that system errors or failures could jeopardise mortgage approvals. And 54.5% feared that increasing automation could eventually reduce the need for human brokers altogether. Others raised concerns about algorithmic bias, the lack of transparency in decision making, and the extra headache of dealing with regulatory rules.

Tellingly, only 5.9% said they had no concerns at all. There’s clearly still a long way to go in brokers being wholly comfortably with AI becoming part and parcel of the mortgage industry. And again, other financial services sectors will undoubtedly feel the same.

What next?

The results really give us something to think about. On one hand, some brokers see AI as a helpful tool, particularly for improving back office processes and compliance. But when it comes to working directly with clients or making advisory decisions, there’s serious doubt about whether technology can ever match human judgement and interaction.

As AI continues to grow, the opportunity in the wider financial services industry appears to lie not in replacing advisers, but in enhancing their efficiency and enabling them to focus on what matters most – the human touch.

To learn more about our Mortgage Lender Benchmark, or our other financial services-focused data and insights, contact our Business Development team.