The financial services industry is afflicted by this, not least when it comes to financial modelling and automated systems.
Technology can protect margins by reducing human cost and replicating actions on a huge scale allows for faster processing.
But it cannot understand customers, so when it goes wrong it does so on a huge scale. This is why I worry about lenders changing the criteria to assess proc fees.
The move away from rewarding volume alone seems reasonable.
But the criteria needs to be well thought through. If they include the past performance of a broker’s submitted loans, consumers may not get a mortgage because of the broker’s application history. This is consumer detriment.
Equally, punishing brokers for applicants’ sins would be unfair.
Applicants’ credit histories and employment and the weighting for these elements are not within the power of a broker to control. Should they refuse to apply for a loan if the case may prejudice future income? I do not think so.
This suck it and see mentality will prevail until there is more understanding about what represents a fair picture of quality.
There are copious examples of technological fixes that create bigger problems than those they were meant to solve. Technology compounds incorrect human assumptions, so it’s time to think before we leap.