Global banks that have a large mortgage business are facing pressure internally and externally to upgrade their operating model to save money, decrease processing times and enhance the customer experience – today it can take more than 60 days to complete a mortgage transaction. The pressure is particularly strong with FinTechs like US online lender Rocket Mortgage and UK digital mortgage broker Trussle creating a completely digital experience for prospective home buyers. Banks, therefore, are exploring everything from mature technologies like Optical Character Recognition (OCR) to more leading edge and high-tech solutions based on blockchain and artificial intelligence. While some of these solutions could dramatically impact day-to-day business for lenders and their brokers and customers, blockchain has the potential to completely transform the entire mortgage financing industry. The financial services industry is all about trust – whether relationship based, reputational, authoritative (legal) or transactional – banking today is built on trust.
By redirecting focus, wealth managers can successfully respond to challenges brought on by digital disruption, demographic shifts, and tighter regulation. Wealth managers have seen their fair share of ups and downs in recent years, and while challenges remain, advisers can drive business and growth by paying attention to demographic segmentation, how investors are using technology, and changes in regulation. In this episode of the McKinsey Podcast, Simon London first speaks with PriceMetrix chief customer officer Patrick Kennedy and McKinsey partner Jill Zucker about the North American wealth-management industry; he follows that with a discussion with senior partner Joe Ngai, on the industry in China. Simon London: Welcome to the McKinsey Podcast with me, Simon London. Today, we're going to be talking about financial advice and the people who provide it: financial advisers, or as they're sometimes known, wealth managers. Wealth management is a very big business--and also a business facing a number of challenges, such as new technology, changing demographics, and tighter regulation in a lot of countries. A little later, we're going to be getting a perspective on China. But we're going to start here in North America. For the first part of the conversation, I'm joined on the line by Jill Zucker, a McKinsey partner based in New York, and Patrick Kennedy, who's based in Toronto. Pat is chief customer officer for PriceMetrix, which provides data and analytics to the wealth-management industry.
These include H20.ai - an open source machine learning One; Active.ai - a conversational AI platform used by over five large Ms. Patwardhan shared her perspective from her past experiences in Facial recognition is the face of future for video banking. Not in the database yet was the verdict! Ms. Patwardhan highlighted that biometrics and digital identity can "One rolls its eyes cutely while greeting customers and the other "Has anyone watched Black Mirror?" she asked. "AI will continue to grow and have many positive
This drives me to the 3rd and final point on Blockchain in (re)insurance: What's new this year? According to, Gary Nuttall MD of The Fintech Times, "The insurance sector is embracing both the InsurTech sector in general, and blockchain in particular, with alliances such as B3I (Blockchain Insurance Industry Initiative – with 15 insurance/reinsurance members) and R3 (which includes insurance companies from Asia and the USA). The establishment of consortia, along with industry standards bodies such as ACORD (a Global Insurance Standards organisation), will enable interoperability between blockchains. Customers experience in the insurance sector still lags way behind. Blockchain allows insurers to start developing models that reduce the burden on customers such as less data re-entry, one touch buying.
Check out the session "AI in personal finance: More than just chatbots" at the Artificial Intelligence Conference in New York, April 29-May 2, 2018. Hurry--early price ends March 16. Here's what we'll be watching in the coming year. AI is sweeping across all industry sectors, including financial services. AI touches customer interactions (voice services like Siri and dialog systems), fraud detection, trading, and risk management (machine learning), and is being used to automate many back-office tasks (robotic process automation).