Is AI truly ready for use in the mortgage space?

RBC's head highlights pros and cons of the emerging tech

Is AI truly ready for use in the mortgage space?

While artificial intelligence is showing enormous promise as a vital workflow component, it still outputs too many erroneous or nonsensical answers to be fully relied on by the finance services industry, according to Royal Bank of Canada chief executive Dave McKay.

In a recent University of Waterloo tech conference in Toronto, the RBC head said that AI continues to demonstrate why it will be a major contributor to the industry. This is especially apparent in RBC’s Aiden trading platform, which is powered by AI.

McKay said that Aiden has outperformed human traders by as much as 30%.

“It teaches itself,” McKay said, as reported by the Financial Post. “It’s gone through all the volatility of the markets, and recent volatility, and continues to outperform. So the machine can work, teach itself to adjust to complex environments very, very well.”

McKay added that AI has significant potential in a wide range of tasks, from writing code to helping navigate complex financial products.

At the same time, McKay acknowledged the validity of the anxieties surrounding the widespread deployment of AI, especially as people are feeling less in control.

“We’re going to reinvent our society yet again, and that’s going to be a threat and that’s creating fear, fear of change,” he said. “It’s an incredible technology that’s going to transform our business, that’s not ready for prime time.”

Ai usage especially prevalent among younger Canadians

AI has permeated Canada’s next generation, with younger Canadians more likely to use AI-powered tools to manage their finances compared to their older counterparts, according to RBC’s recent survey.

“Younger Canadians are ready to harness the power of artificial intelligence when managing their finances,” RBC said. “[The results] indicate a stronger, positive perception of AI’s utility among younger Canadians aged 18-34, marking a transformative shift in the management of personal finances in the age of technology and innovation.”

Approximately 71% of respondents aged 18 to 34 said that they find AI useful in automating savings. This is despite 75% of Canadians across all ages reporting being sceptical of AI’s full capabilities.

“We believe AI is revolutionizing personal finance management,” said Peter Tilton, chief digital officer for personal and commercial banking at RBC. “The ability to harness the power of AI can help level the playing field in terms of financial literacy for Canadians. It can take the manual calculator work out of budgeting, tell you where you might be overspending, help you save automatically, and even give you a view into your future cashflow.”