Three-quarters (75%) of business leaders say they are planning to escalate AI investments, especially within the lending and financial services industries, according to a new report from J.D. Power on the use of AI-powered chatbots in the mortgage industry.
The study "dives further" into one specific aspect of the J.D. Power 2024 U.S. Mortgage Servicer Satisfaction Study, which included 11,565 responses and was fielded from May 2023 through February 2024. Authored by J.D. Power's Senior Director, Lending Intelligence Bruce Gehrke, the report indicates that customers’ perceptions of online chatbots present one of the biggest barriers to adoption of AI-powered customer service solutions.
"Our research suggests that as the use of technology and digital capabilities in mortgage lending and servicing has increased, there still is still a strong consumer preference for the human touch," Gehrke told NMP. "We are seeing lenders and servicers that find the right mixture of personal and digital engagement that puts the customers' needs at the forefront in a transparent manner drive the highest level of satisfaction and trust. It is that trust and transparency that can smooth the introduction of artificial intelligence."
The findings in J.D. Power's survey affirm those released in a separate survey this week, conducted by Cloudvirga, concerning distrust of lender AI. Cloudvirga's study showed 60% consumer respondents having serious concerns about the use of lender AI, to the extent that it could be a deal-breaker, despite those respondents' expectations for an even more automated, digital mortgage experience in the future.
In the past year, 21% of mortgage servicing customers experienced an issue, per J.D. Power's study, but only 9% used online chat as their first point of contact, compared with 48% who called customer service. Younger generations — Gen Y and Z — are three times more likely to use chat than older ones, highlighting the channel's growing importance.
Most chat users found it effective, with 67% using it to resolve a problem, and 83% of those successfully resolving their issue. Customers who resolved their problems via chat reported an average satisfaction score of 702 (on a 1,000-point scale), compared with 482 for those who could not.
About 73% of chat users interacted with a live representative, while 10% believed they were speaking with a chatbot and 17% were unsure. Customers who thought they were chatting with a human reported a better experience than those who suspected they were speaking with a machine.
"Our research suggests that a human touch drives a better experience," said Gehrke. "Even with a human-powered chat, the use of pre-scripted answers drives down satisfaction. When needing to reach out, people like to interact on a personal level."
Of those who interacted with a live agent, 63% felt the representative followed a script, but satisfaction was significantly higher (699 vs. 636) among those who felt no script was used. Additionally, 73% of those who sensed no script said the process was extremely easy, compared with 27% who felt a script was used.
Continued Gehrke, "Transparency also matters. Those consumers who do not know whether they are engaging with a person or chatbot, are least satisfied. This suggests that lenders and servicers need to be careful about how they look to improve automation with chat."
