Founder and president on technological impacts
Joe White (pictured), founder and president of REMIC, has witnessed firsthand the seismic shifts in the mortgage industry. Speaking to CMP, he said that while technological advancements are storming ahead, we’ve only seen the beginning of AI’s impact.
“It’s hard to believe that OpenAI launched in November of 2022,” White said. Before this, machine learning models were largely the domain of larger companies with specialized tech knowledge. However, White believes that OpenAI and similar models have democratized AI, making it accessible to a broader audience.
And, the potential for AI to render certain roles obsolete is a topic White does not shy away from.
“Data-heavy roles are really in jeopardy,” he told CMP, citing data entry clerks, administrative assistants, and even underwriters as examples. White also draws a parallel with the life insurance industry, noting how fintechs have leveraged AI to disrupt traditional roles.
“Automation is coming to these and other roles, and certain brokerages are going to be impacted as well,” he told CMP.
How will automation impact brokerages?
The forecast is stark, with some predictions suggesting that 20% to 30% of brokers may be obsolete by 2026 due to AI advancements. According to research from WorldMetrics, AI has the propensity to reduce the mortgage processing time by 75%, processing applications 10 times faster than human underwriters. As such, White advises mortgage professionals to focus on the interpersonal aspects of their roles to future-proof their careers.
“To become indispensable means having something that your competition doesn’t,” he added. “Transactional brokerages are going to have it tough, while those focusing on relationships will need to become very good at promoting the value of relationships.”
Education and training are crucial in preparing for this AI-driven future, and REMIC is at the forefront of integrating AI into its courses. White explained how the organization has always been data-driven, using student data to enhance the learning experience.
“AI helps us interpret that data and find correlations between seemingly unrelated data points. A commitment to continuous improvement is evident in our upcoming update in September.”
White draws further parallels between the mortgage sector and other industries that have embraced AI, such as life and health insurance. He provides several examples of AI’s impact, from automated document processing systems like Flinks and Plaid to AI platforms like ZestFinance, which use machine learning to assess risk profiles more accurately.
“Companies that incorporate AI as tools will excel, in my opinion,” he added, emphasizing that the focus should be on consumer benefits.
White also likens the transformative effects of AI on financial services to the impact of online gambling on traditional casinos. Both industries have seen increased accessibility, cost efficiency, and personalized experiences.
“Change is stressful, but it’s also full of opportunity,” White said.
And, as the mortgage industry grapples with these changes, White offers a vision of how AI can be a tool rather than a threat. He points to AI-driven platforms, which analyze clients’ financial situations to provide tailored solutions.
“These technologies can enhance consumer experiences and provide a competitive edge,” he said.
White will be speaking at CMP’s upcoming Canadian Mortgage Summit – book your tickets here.
