It is possible a robot wrote this. In other words, it is not impossible for a robot to write an entire feature for a magazine. The real question, however, is would you even notice a difference? After all, robots can’t add flair, much less nuance, or even inject love and passion into their musings. Or can “they”?
In the case of writing, a few months ago, Wired published an entire web series on what bot-tech meant for the future of journalism. They titled the special coverage: “The News in Crisis.”
One article opened with the following anecdote, tinged with this pervading feeling that robots will terminate us from all of our jobs one day.
“When Republican Steve King beat back Democratic challenger Kim Weaver in the race for Iowa’s 4th congressional district seat in November, The Washington Post snapped into action, covering both the win and the wider electoral trend. ‘Republicans retained control of the House and lost only a handful of seats from their commanding majority,’ the article read, ‘a stunning reversal of fortune after many GOP leaders feared double-digit losses.’
“The dispatch came with the clarity and verve for which Post reporters are known, with one key difference: It was generated by Heliograf, a bot that made its debut on the Post’s website last year and marked the most sophisticated use of artificial intelligence in journalism to date.”
So it’s possible a robot wrote this. Not impossible, and totally plausible even. And if my job is at risk, then so is yours. At least, that is the prevailing pro-human bias in the news business today.
And let’s face it, you can’t help but be pretty impressed as to what robots can do in this day and age. The breadth and depth of their ability is nothing short of awesome.
When it comes to home prices, algorithms can more quickly determine a scale of value at a fraction of the cost for a human to do that work.
In underwriting, bots can leverage software as a service to perform the structurally repetitive tasks that can often lead to human error. Bots can do this quicker and without errors, to boot.
Amazon can unlock the door and let the Realtor in, but do you really even need the Realtor in the first place? And then there is Artificial Intelligence, also known as the Rise of the Robots.
Artificial Intelligence relies on increased data volumes, advanced algorithms, and improvements in computing power and storage, according to computer analytics firm SAS; all of which is available today. AI requires no human intervention and can make decisions on its own. This ability to move from strength to strength is defined by the Harvard Business Review as Machine Learning (ML).
Understanding the importance of ML is critical to fully appreciating the impact robots can have on our jobs. Algorithms and bots help us in our jobs, but they don’t replace us.
This isn’t the case with advancements in AI.
HBR authors Erik Brynjolfsson and Andrew McAfee wrote about the overall impact the advent of AI and ML may have on our livelihoods.
“Why is this such a big deal? Two reasons. First, we humans know more than we can tell: We can’t explain exactly how we’re able to do a lot of things — from recognizing a face to making a smart move in the ancient Asian strategy game of Go. Prior to ML, this inability to articulate our own knowledge meant that we couldn’t automate many tasks. Now we can.”
“Second, ML systems are often excellent learners. They can achieve superhuman performance in a wide range of activities, including detecting fraud and diagnosing disease. Excellent digital learners are being deployed across the economy, and their impact will be profound.”
Detecting fraud? Does that sound like a service you’d like at your mortgage lending business? Of course it does, but can such technologies be implemented easily and without disruption to the businesses services?
The answer is yes and no. HousingWire contributors Dave Savage and Kristin Messerli addressed this conundrum in a recent ReWired blog.
Savage and Messerli continued with a conversation they had at the recent LendIt Fintech USA conference. There they spoke to PwC’s Consumer Finance Practice, Roberto Hernandez, who shared his thoughts on disruption and the future of the modern loan officer.
Hernandez explained, “People have been saying for years that loan officers will go away, but when we ask about the potential model, consumers say no. People value the advice of their loan officer.”
He predicts that AI will reduce the amount of time the loan officer spends actually originating so he can spend more time advising. Rather than removing the loan officer from the transaction, he says that by digitizing and automating the process, “the loan officer becomes the center of the transaction.”
Loan officers may not be disappearing from the model, but their role has certainly shifted. By consumer demand and the help of technology and AI, they have gone from originator to advisor.
Mortgage advisors need to understand how to leverage technology to communicate and connect with consumers in the way that will empower their purchasing experience, Savage and Messerli wrote.
Steve Smith, the CEO of data aggregator Finicity, believes that the implementation of tech into the mortgage lending space is still in what he calls the “early adoption phase.” He believes tech should be leveraged to make the transaction smoother for the borrower and less error-prone for the real estate agents, appraiser, underwriter and lender.
“To add value is to remove friction,” Smith said. Yet mortgage lending will remain a “people process.” Finicity sees this current environment as an opportunity and is reading the room well.
Their recent inroads into mortgage lending are tech-forward. In the past few months, Finicity also integrated with BeSmartee’s digital lending platform, MortgageHippo’s digital lending platform and Ellie Mae’s Encompass platform. They also announced a partnership with Advanced Data where Finicity asset reports are included as part of Advanced Data’s suite of fraud prevention and enhanced verification tools for mortgage lending.
At the center of Finicity’s operations is safe access to data, data, data and the company is much larger than the mortgage lending space.
Take their relationship with Sovrin, a private-sector, international nonprofit aimed at promoting self-sovereign identity for a digital-first world. Finicity was announced as a founding steward (along with 25 other companies like IBM) earlier this month, and was the first data aggregator to do so.
On the surface, “digital-first” may sound like “people second” but the idea with Sovrin is to change minds, to reprogram the humans on how they feel about bots taking over their roles. The new identity is one that incorporates a greater aspect of the robotic aid.
It’s an uphill battle, creating a new identity where humans are OK with rubbing shoulders with robots as co-workers. Most people in the mortgage space get it, but as Smith notes, some still do not.
“They won’t change until they are forced to change,” he said of those who fight the go tech or go bust mentality.
The living memory of many includes going into bank branches and working directly with tellers. Until recently, it was difficult to envision doing something as personal as private banking without someone to help you along the way.
Today, not only are people all but vanished from banking, it now feels more normal to manage one’s funds using only apps. As a HousingWire reader said in a recent email to me: “We have the view that loan officer employment will remain steady in the AI era because borrowers value expert human input. Really? Lenders are paying more than $19 billion annually for loan officers and surely they’re looking to reduce costs.”
The 2018 Citi Mobile Banking survey of 2,000 adults found that 31% of app users use their financial services app more than any other app. That may be any one of your potential customers. Indeed, reaching customers through their phones is a legitimate thing now, especially considering the use of financial apps is second only to weather apps (33%) and social media apps (55%). While there are trepidations on the mortgage worker side, consumers are already making friends with robots.
“Mobile banking usage is skyrocketing as more consumers experience the benefits of greater convenience, speed and financial insights driven by new app features and upgrades,” said Alice Milligan, chief digital client experience officer, U.S. Consumer Bank, Citi.
“Over the past year we’ve witnessed this increase in engagement first-hand, with mobile usage in North America increasing by almost 25%, and we don’t see this trend slowing down any time soon.”
This is proof that a digital-first mindset needs to be adopted across the mortgage-lending landscape.
According to the study, almost half (46%) of consumers — including nearly two-thirds of Millennials (62%) — have increased their mobile banking usage in the last year.
Eight out of 10 consumers (81%) are now using mobile banking nine days a month, on average, while nearly a third (31%) mobile bank 10 or more times per month.
Here is a wrap of the results lenders need to know about:
• 91% of mobile banking users prefer using their app over going to a physical branch
• 68% of Millennials who mobile bank see their smartphones replacing their physical wallets
• Respondents estimate that they save 45 minutes a month because of mobile banking (equivalent to nine hours a year), logging in while at home on the couch (75%), in bed (47%) or at work at their desk (36%).
• 19% of Millennials are even mobile banking while on a date.
David Schroeder, senior vice president of Quicken Loans Mortgage Services recently broke down potential homeowners into three different types of buckets and describes the methods to get them to close, quickly and efficiently. Some are more into working with robots than others.
“We can’t stop the world of progress, we’ve got to be on the edge of technology and you see that with Rocket Mortgage,” Schroeder said.
“There is an emerging group of people who are comfortable going through the mortgage process and not having to talk to a person, that’s just a reality. That’s the Rocket Mortgage.
“Then there’s the QL brand, the brokers, there’s a television commercial for [borrowers] to call in, and they can provide an amazing experience.
“And the third channel are those folks who at least want the option of dealing with someone who is in their community; We don’t see that going away.”
So as the role of robotics increases in the mortgage lending space, taken as a whole, the human element isn’t automatically replaced. Innovators such as Finicity, combined with big pockets, such as Quicken Loans, show that tech can actually create more business if appropriately embraced and executed.
Companies such as Finicity teach consumers how to better manage money, and Rocket Mortgage automates the DT, etc. In time, these types of services will work together to open the credit box, by offering loans to those who are locked out of lending because of their credit score.
Carrington Mortgage Services recently launched such a mortgage program and I asked executive vice president Rick Sharga flat out: “Speaking in terms of real estate agents and loan officers, do you see automation taking over a big part of their role going forward?”
Sharga responded that this is the trillion-dollar question facing our industry right now.
“I’m of the school that the Realtors will always be involved. I do think as Artificial Intelligence becomes more pervasive and Machine Learning becomes a bigger part of the process, Realtors will need to see their roles change.”
But according to Sharga, recent research he conducted in his previous role at Ten-X identified Millennials as the demographic most interested in working with a human for their mortgage needs.
“It’s because they’ve never been through the process before,” he explained.
“As counselor, as coach, as a hand holder, even when people are pretty well-educated on rates, there is still some uncertainty and they want to talk to someone before they pull the trigger,” he said.
“And if you’re a borrower who doesn’t click all the boxes exactly, you’re still going to get kicked off to a call center where a loan officer can deal with whatever perceived issue there is.”
“The human element is really important,” Sharga said. “As long as we’re dealing with people who are buying the homes, there is going to be an opportunity for people on the other end of that transaction.”So our jobs are safe, for now, at least until robots begin to make counter offers on our homes. We can’t possibly win that kind of bidding war. After all, it may prove tough to write a cover letter that is more compelling than the one written by Heliograf. Our robots just grow up so fast.
