What can AI offer our industry, and why should lenders take advantage of it?
If you have access to any avenue that provides news (a radio, television, newspaper or internet device) you know that AI is being talked about essentially everywhere at the moment. We haven’t had a news cycle in the past month where artificial intelligence wasn’t the lead story.
A recent example is Italy banning ChatGPT, the AI chatbot developed by OpenAI. OpenAI was founded by tech industry luminaries including Elon Musk and Microsoft. According to CNBC, Italy won’t be the only company to move in this direction.
This isn’t the first time a government has broached the subject of regulating AI. It won’t be the last and we’ll see more of it in the days ahead because advances and oversight is transforming rapidly.
When things move too fast, people get scared.
Of course, things don’t move quite that quickly in financial services. Yes, we are actively implementing some AI tools into our platforms and making good use of them where it makes sense.
We don’t face the same fear’s that Italy’s regulator cited as reasons for its actions, mostly because our next generation loan origination technologies are not open to the Internet. Our connections are very deliberate, designed to keep our industry’s data safe as loans are processed.
We’re also using AI differently than in other industries. Instead of generative AI, which uses the data that has been used to train it to come up with new ideas, we already know everything that is supposed to happen as our loans move through the origination process.
In our business, AI is used to facilitate the workflows we define, not chart a new course into the unknown.
But this is not to say these tools don’t have a great deal to offer. In fact, AI can be a lender’s superpower.
Most of the problems that lenders face each day are the direct result of the people engaged in their process. The days of using humans as widgets in a system that can do the job without them are ending. That’s a very good thing.
In just about any lender’s shop, you’ll find talented professionals working in the loan underwriting department whose job is to click on a loan number in the LOS to open a new screen, click on a document ID to pull up an image, read the document, enter some data they see on the document into a box on another screen and then hit a button to go to the next document in the list.
This is a poor method of deploying human resources and does not encourage job satisfaction. No one wants to do a job where their success is measured on widget production.
In the past, we had no choice and so there is no shame in seeing this situation in your shop today. But it’s time for a change. Those people can add so much more value to the institution elsewhere and it’s time to give them that opportunity.
That’s what AI offers our industry, and we must take advantage of it. The first lenders who do will look like superheroes to the rest of the industry. And they will be.
By Jim Rosen, EVP, Services at Mortgage Cadence
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