ChatGPT and the Future of Mortgage Servicing: A Look into Intelligent Chatbots

ChatGPT and the Future of Mortgage Servicing: A Look into Intelligent Chatbots

Nexval Infotech

Nexval Infotech

If the 1990s was the age of digitization and the 2000s ushered in the internet and the cloud, then now, we are living in the era of automation and AI. These technologies have a pervasive presence in our lives, and like the breakthroughs before them, the impact of artificial intelligence cuts across industries and verticals. For example, mortgage servicing can use AI for a variety of tasks – from converting decades-old paper documents through computer vision to communicating with borrowers via chatbots.

That’s what makes advancements like ChatGPT so important for digital transformation in the mortgage sector. Importantly, ChatGPT isn’t simply an AI-powered conversational interface; it is a large language model that is capable of researching, articulating, and communicating like human beings. This has major implications for the future of mortgage servicing and mortgage automation services.

Read More: Mortgage Loan Servicing Market: What to Expect in 2023?

What Does ChatGPT Mean for Mortgage?

The core technology behind ChatGPT is the large language model (LLM). It is an algorithm that applies deep learning and neural networks to calculate the probability distribution over sequences of words. The model is trained on a massive database of information and text. ChatGPT’s training data, for instance, includes 570 GB of information from books, Wikipedia, online articles, etc., comprising over 300 billion words.

Theoretically, you could train an LLM on any text database, including mortgage law, credit and interest trends, mortgage demographics information, historical data, real estate data, and much more. If this were to happen, the chatbot would be able to answer nearly any mortgage-related query or decision with precise and fast results.

This could be transformative for the mortgage servicing sector, which relies hugely on information retrieval and communication. A system like ChatGPT connected with a larger framework for mortgage automation services can be useful for triggering automated actions, sending notifications, and tapping into the right opportunity at the right time with little to no human effort.

Read More: Features of Blockchain That Can Benefit the Servicing Sector

How Will Intelligent Chatbots Shape the Future of Mortgage Servicing?

Intelligent chatbots like ChatGPT could enable the following key trends for mortgage servicing:

1. Mortgage automation services will become the default for documents

LLMs like ChatGPT can learn from very large databases of textual information. This means that in the future mortgage servicing documents will no longer reside in siloed, legacy formats. Instead, they will be part of a centralized repository that feeds into and trains the AI model. In turn, the intelligent chatbot will become a singular pane for interacting with the information, first for mortgage executives and eventually for borrowers.

2. Manually keeping up with compliance will become a thing of the past

Today, mortgage servicing compliance is one of the biggest pain points for the industry, with new laws around forbearance, relief measures for the pandemic as well as a possible recession, and different regulations in different political jurisdictions. Workflows and decision-making dashboards have to be reconfigured for every new law and regulatory modification.

The ChatGPT (or its equivalent), any relevant data that’s generated will automatically feed into the AI model. As soon as a law or court judgment enters the public domain, the LLM can learn from it and incorporate it into future communications.

A glimpse of this is already in action, thanks to data-driven mortgage risk management platforms that dynamically update the information used for its workflows.

3. The borrower experience will become frictionless

Mortgage servicing can prove to be a difficult, often harrowing experience for borrowers, as they navigate complex mortgage laws surrounding their most treasured assets. Ineffective servicing communication could deny borrowers the relief they deserve, block out possible options, or delay the entire process – only adding to the anxiety.

An intelligent chatbot like ChatGPT will ensure that there is always a helpful assistant ready to answer borrowers’ queries. Unlike today’s chatbots, they won’t just provide routine answers to FAQs. They would be able to comb through large databases, find the right solution, and tailor the response for every situation, almost like a human being.

Read More: How to Streamline Default Mortgage Servicing

Considerations for Using Tools Like ChatGPT in the Mortgage Sector

While the potential of tools like ChatGPT in mortgage servicing is immense (it will essentially double up as a full team of human executives but without the risk of errors), there are a few considerations:

  • The technology is still experimental and selectively available for commercial use. It will be a few years at least until it is ready for enterprise-wide mortgage servicing
  • The costs of using the technology behind ChatGPT-like tools can prove to be prohibitive. OpenAI, the company that built ChatGPT, recently made its APIs available at a cost of $0.002 for 1000 tokens. Tokens are textual chunks that the AI is trained on; a single sentence can have anywhere between 30 and 40 tokens. If mortgage servicing companies were to train the AI at scale, the costs could go up to hundreds of thousands of dollars.
  • The centralized database to train a mortgage-specific ChatGPT-like tool is yet to exist. A public domain repository like the internet cannot serve the purpose – more investment in business intelligence systems is needed until similar intelligent chatbots are ready for mortgage servicing

Read More: Challenges of Servicing Transfer and How to Overcome Them

Start Preparing for the Future of Mortgage Servicing Today

The first step towards effective and sustainable digital transformation, in any industry, is to strengthen the foundations. For ChatGPT, this means removing duplication or bias in data, setting up workflows through mortgage automation services, building infrastructure capabilities (i.e., the cloud), and partnering with the right technology provider.

At Nexval, our team of 1000+ SMEs helps mortgage leaders stay ahead of emerging trends like intelligent chatbots and ChatGPT, while maximizing their opportunities with minimal risk.

Speak with our Tech Gurus to know how.

Nexval Infotech

About the author

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}