Alternative lending brokers seen as ‘AI-proof,’ experts say

During a panel discussion at the 2025 Expo hosted by the Canadian Alternative Mortgage Lenders Association (CAMLA), industry experts agreed brokers specializing in alternative and private lending have an advantage as automation reshapes the broader financial sector. They highlighted the nuanced, relationship-driven nature of alternative lending as something technology can’t fully replace.

Why alternative brokers are better protected from automation

Ron Butler of Butler Mortgage told the audience that brokers in private and alternative lending have built-in protections against the coming wave of automation affecting traditional mortgage lending.

“You folks, whether you know it or not, are fortunate. You are in a business that is effectively, for the next 10 years at least, impossible to be replaced by AI,” Butler said.

He contrasted this with the prime lending market, where major banks are aggressively automating document verification and underwriting roles.

“Thousands of people [in the prime lending space] are going to lose their jobs in the next 10 years,” he added. “Banks want to find ways to eliminate people.”

“AI can handle all [of the verification of the documents], making many current positions obsolete,” he added, predicting that “there will be no document administrator within three years.”

Butler explained that the personal judgment, nuanced risk assessment, and relationship-building at the heart of alternative lending are precisely what makes it difficult to automate.

“But, fortunately for the people here, this private lending world is boutique enough, it’s unique enough that there’s no urgency to introduce high-level automation to it,” he said. “This segment has a bright future, provided we significantly cut down on fraudulent and unethical practices.”

The irreplaceable human element

Mike Forshee, president and managing director of Glasslake Funding, agreed with Butler, noting that automation simply doesn’t fit with how alternative lending really works.

“Automation [on this side of the industry, I think, is so far away. Just through the scale, you can’t, the economics just don’t make sense,” Forshee said. “There’s a critical human element that technology can’t replicate.”

Nick Kyprianou, president and CEO of RiverRock MIC, shared similar thoughts, emphasizing that alternative lending thrives on understanding clients’ unique stories.

“It takes a certain level of care down to really understanding the story about why the client’s in the situation they ar

“At the end of the day, it’s components of automation, like OCR technology and certain AI functions, that can help us become more efficient on the side, but not totally over-rely on.”

A promising human-driven future

The panelists wrapped up on a cautiously optimistic note, recognizing ongoing economic and industry challenges, but affirming the strong potential for growth in alternative lending.

“There is going to be nothing but more opportunity in this space,” Butler said. “Be happy in your work, but do it correctly and within the rules. And do the right thing by the client, and things will be great.”

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Last modified: May 15, 2025