6 better records make for better conversations with clients, and better conversations make the records easier to produce. I couldn’t introduce this quarter's newsletter without mentioning AI! I think it's fair to say we are all under pressure to be seen adopting AI, whether that is in underwriting, document processing, customer contact or advice support. Some of that pressure is fair: there is genuine potential in the technology, and firms that ignore it entirely risk being left behind. But a good deal of the current push is running ahead of the evidence. Processing capability in many cases remains unproven at scale, and the true cost, in system integration, in ongoing model oversight, and in the compliance resource needed to keep pace with a live regulatory conversation on AI, is not yet properly costed by many of the firms adopting it. The customer side of the equation is just as uncertain. Firms are, in effect, running a live experiment on how borrowers respond to AI-assisted processes, from chat-based triage through to automated document checks, without a clear evidence base for how that lands with people making one of the largest financial decisions of their lives. Some clients will be entirely comfortable with it; others will want a human involved at every stage, particularly where a case is complex or a client is vulnerable. Consumer Duty does not go away simply because a process has been automated, and a firm that cannot evidence good outcomes from an AI-assisted journey is exposed in exactly the same way as one that cannot evidence them from a human one. We believe brokers are well placed to see this clearly, because they sit closest to the client reaction that lenders, several steps removed from the point of advice, are often the last to hear about. None of this is a case against AI. It is a case for proceeding at the pace the evidence supports, rather than the pace competitive anxiety dictates. Firms that treat this year as a period of careful testing, clear cost accounting and honest measurement of customer response will be in a far stronger position than those that adopt quickly and unpick problems later. For brokers, that measured approach is also a point of genuine differentiation: the ability to say, credibly, that technology is being used to support advice rather than to replace the judgement clients are paying for. To help in your AI decisions Paradigm have revamped our AI hub which can be found at the Paradigm website. It will give you market data, practical guidance on what AI means for your firm and your marketing, and advice on using it responsibly (client confidentiality, accuracy, record keeping and cybersecurity). If you are not sure about where your business currently is regarding AI you can take our free and unique AI readiness scorecard on the hub and find out in minutes. The hub can be found at: Artificial Intelligence. At Paradigm we believe, “you don’t need chips with everything”! Despite all the issues in the market and those outside that still influence it, there is a reasonably solid case for cautious optimism. This is not 2008, and it is not 2022 either. RSM UK's housing tracker points to price increases of 3 to 4% in more affordable regions over the year ahead, and an estimated 220,000 fewer rental homes by the end of 2026, as landlords exit in response to regulatory and tax changes, is gradually pushing more stock towards buyers in some areas, even if the effect is uneven across the country. Buyer demand, The Case for Cautious Optimism 3 to 4% Forecast price growth in more affordable regions over the year ahead (RSM UK) 220,000 Estimated fall in rental homes by the end of 2026, releasing stock to buyers
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