Artificial Intelligence (AI) is transforming industries worldwide, and mortgage banking is no exception. To dive deeper into this topic, we sat down with Dr. Ivan Darius, a co-founder and Board Member of Wilqo, who is renowned for his expertise in decision systems that leverage AI.
About Dr. Ivan Darius
Before launching Wilqo, Dr. Darius was a founder of Optimal Blue, the leading provider of mortgage product eligibility and pricing services. His career began over 40 years ago at Texas Instruments (TI), where he directed the Decision Systems Lab. His work at TI included applying AI, simulation-based modeling, and operational improvement techniques to the semiconductor manufacturing process. He later introduced model-based cycle time reduction methodologies globally in TI’s factories.
Interview Highlights
If AI has been around for 40 years, why is it getting so much news and hype now?
Dr. Darius:
AI has indeed been around for decades, but the technology has made significant progress. Initially, AI relied on rules to encode expert knowledge, which had limitations due to the lack of computing power and data availability. Today, we have unprecedented computing capabilities and vast amounts of digitized data, which enable more sophisticated AI models.
Advancements in machine learning, particularly deep learning and LLMs (large language models), have propelled AI to new heights, making it applicable to a wider range of industries.
How is AI different today compared to your experience in the early days with this technology?
Dr. Darius:
What has transformed AI for me are all the various aspects of learning that have been added. Modern AI systems, especially those using deep learning, can analyze vast datasets, learn from them, and make predictions or decisions with high accuracy. Generative AI systems can create new content, such as text and images, which was unimaginable back then.
Should people be worried about losing their jobs to AI systems?
Dr. Darius:
It is natural to have concerns, but AI should be seen as a tool that augments human work rather than replaces it. AI can automate routine, repetitive tasks, freeing up employees to focus on more complex and creative aspects of their jobs. It is essential for organizations to invest in reskilling and upskilling their workforce to work alongside AI, ensuring a collaborative environment.
In your opinion, what is the single most important impact AI will have on mortgage banking in the next 5 years?
Dr. Darius:
AI’s biggest impact will be on streamlining operations and eliminating repetitive tasks (like “checking the checker”). AI-powered systems can process loan applications, verify documents, and conduct background checks much faster than human employees. This efficiency speeds up the loan approval process, reduces errors, enhancing customer satisfaction, and improving the lender’s profitability.
It is important for lenders to stay focused on their objective of providing financial solutions for home buyers and homeowners looking to restructure their debt. There are many opportunities to use AI for internal process improvements (many of which will be highlighting in this blog over the coming weeks) and selecting vendors who are investing heavily in new tools that leverage AI to enhance the lending experience.
A key aspect of this is having a delivery mechanism for the output of these AI systems at the point of need, like in your processing system, and in context. Most platforms in use today are older and lack the flexibility to display different content generated by an AI system based on previously collected data.
If you were the CEO of a mortgage lender, what steps would you take to ensure your business stays competitive and thrives by adopting AI?
Dr. Darius:
First, I would research and highlight the evolution and potential of AI in mortgage banking.
It is crucial to invest in AI technologies that align with the company’s goals and to start with pilot projects to demonstrate their value. Building a culture that embraces AI and reskilling employees to work alongside AI tools is also essential. Finally, collaborating with AI vendors to stay ahead of technological advancements will help maintain a competitive edge.
How has AI contributed to improving the customer experience in mortgage banking?
Dr. Darius:
AI significantly enhances the customer experience by offering personalized interactions and instant support. AI-powered chatbots and virtual assistants are available 24/7 to answer customer queries, guide them through the loan application process, and provide updates. This immediate assistance can improve customer satisfaction and loyalty by ensuring a seamless and responsive experience, even though these support solutions are still a work in progress at this time.
What are the ethical considerations mortgage bankers should keep in mind when implementing AI?
Dr. Darius:
Ethical considerations are crucial when deploying AI. Mortgage bankers must ensure that whatever systems they use, including their AI systems, are transparent and unbiased. This involves regularly auditing AI models for fairness, accuracy, and avoiding discriminatory practices. Additionally, protecting customer data and maintaining privacy are paramount. Implementing robust security measures and complying with data protection regulations are essential steps.
What advice would you give to employees who are anxious about AI taking over their roles?
Dr. Darius:
My advice is to view AI as an opportunity rather than a threat. Think about how much better you can perform with a patient, always-available helper. Embrace continuous learning and be open to acquiring new skills that complement AI technologies. Focus on tasks that require human creativity, empathy, and strategic thinking, these systems can show you details about your processes that are very difficult to unravel manually.
A good analogy to think about was when the first spreadsheet applications became available. Until that time, people kept ledgers by hand (often on large, green ledger sheets). VisiCalc and Lotus123 digitized those ledgers making it infinitely easier to make changes to financial models. The people responsible for working with those tools went from spending most of their time handwriting numbers and calculating data with an adding machine, to becoming more strategic by testing “what if” scenarios in their sheets.
By adapting and evolving alongside AI, employees can enhance their roles and career prospects.
How important is collaboration between human employees and AI systems in achieving optimal outcomes?
Dr. Darius:
Smooth collaboration between humans and AI systems is crucial. AI can process and analyze data at speeds and volumes beyond human capabilities, but human judgment is essential for contextual understanding, improvement, and validation of decision-making.
By working together, AI and human employees can achieve more accurate, efficient, and innovative outcomes, driving the business forward in a competitive market.
Final thoughts?
Dr. Darius:
AI is here to stay and will continue to evolve.
The key for mortgage bankers is to embrace AI as an enabler of growth and innovation. By leveraging AI’s capabilities, the industry can enhance customer experiences, improve decision-making, and drive efficiency.
Staying informed and proactive in adopting AI will be crucial for future success, so is picking a partner that can realize the benefits in your day-to-day environment.
