How is technology transforming Canada’s mortgage industry?

Fergal: [00:00:25] Hello again and thanks for joining us on another edition of CMP TV. I'm Fergal McAlinden, news editor for CMP. And today, we're taking a closer look at some of the ways that technology has continued to transform the mortgage space through 2022. It goes without saying that the importance of technology has increased massively for mortgage professionals across the industry in recent years. And joining us on today's show are executives from different sectors of the mortgage space to discuss how they've been utilizing digital solutions this year, as well as some of the tech trends that could be coming down the road in the future. I'm very pleased to welcome Eric Larocque, chief mortgage operations officer at Community Trust, a leading Canadian lender. And Chris Grimes, CEO and co-founder at Fundmore.ai, which provides automated loan origination software for the industry. Thanks to you both for joining us today. How are things with you? 

Eric: [00:01:14] Excellent. Thank you Fergal excited to be here today. 

Chris: [00:01:17] Yeah. Excited to be part of this. Appreciate the invite and the time. 

Fergal: [00:01:22] Well, it's fantastic to have you both with us today. And Chris, I'm actually going to direct the first question that you and I just wanted to get your take on what you've been doing to help lenders and brokers navigate the mortgage environment this year, which has been such a complex one for for everybody. 

Chris: [00:01:37] Yeah, for sure. And we really kind of took a step back and throughout 2020 to really looked at how do you re-envision workflow for mortgage lenders and ultimately with the consumer being the endpoint and that entire journey from consumer broker lender sales team lender. And, and with this vision that we've had since we started this company, which was how do you help mortgage lenders find mortgages on the same day. And when we started taking a sort of more outward look, what we really did this year was partner with a lot of best in class companies, technology providers in the industry to provide sort of components of that of the workflow. And a few press releases have come out recently. We have a few more coming up with some pretty big name partners in the industry about how you re-envision how a mortgage gets originated, because for 25, 30 years we've been stuck in these technology stacks where you couldn't transform that that operation. It had to go through a very linear funnel to get from applications you're funding and things like title and things like income verification that are done at very strict sort of components within that workflow. We believed if you worked closer with the POS systems, the big brokerage houses, the the funding platforms in the industry, that if you re-envisioned each one of those products and programs individually, that you could bring them into different phases and actually streamline the process a lot faster. And so that was our core focus for 22, was finding new partners, looking for best in class technology partners that we can bring into the ecosystem to help facilitate a faster funding. 

Fergal: [00:03:29] And so interesting that you talk about streamlining the process because whether I'm talking with brokers or with lenders, streamlining is always the word that seems to come up whenever they're talking about what they want from from technology. Eric, I wanted to ask you how you've been utilizing technology at Community Trust to better equip both brokers and their clients with the solutions that they need. 

Eric: [00:03:49] Yeah, absolutely. And I actually resonate with with Chris's statements in terms of really trying to break down the process and dig deeper into streamlining each individual component of that. And we've done a lot of the same and trying to dig deeper into each of these components to bring speed, efficiency, agility to to each of these integral sort of components that then feed into each other. But what we've done is also gone out to try to serve Canadians better by simplifying and bringing and inviting more players into the space, into the technology game in terms of really being able to connect direct to source, we'll pick on income verification as sort of one component of that. And traditionally, it's been about soliciting documentation, reviewing data. But when you invite employers into the system as well, you start to build that direct sort of connectivity with that source as well. So thinking outside of your traditional players and actually seeking to bring more players in through data, through technology, to actually really accelerate our offering. We continue to do these deep dives into each of these components to see how we can streamline and bring those efficiencies to the front line for our brokers and more importantly, for Canadians in general. 

Fergal: [00:05:16] Okay, great. Well, one question that I want to put to both of you relates a little bit to what I talked about in the intro, how the importance of technology over the past couple of years, especially in the industry, has really skyrocketed. We always hear that the pandemic accelerated the intake of technology and how technology is used. Chris, maybe we'll start with you. How has the importance of technology in the industry risen over the past couple of years, and is it different compared to how it was before the pandemic? 

Chris: [00:05:46] Yeah, I've sort of I've been asked this question a lot, I think recently. And when we're out and talking to lenders and and others in the industry, it's it's something that I think if we look at this from the from the sort of three or four core segments of the industry and you think about the Canadian or the borrower at the beginning of of the funnel  and how their world changed throughout the pandemic. And, you know, not only were they competing for houses like they never were in pretty much any other generation, but they had to do so in a new environment that the regular brick and mortar shops weren't necessarily there for them. The brokers who were where traditionally in an office we're at home and maybe that mobile force that would go into their homes. That wasn't a thing to that. That was going to continue during that that period of time. And it really forced a new a new way to engage with with borrowers and consumers. And I think, you know, it there was a lot of technology pre-pandemic that was starting to evolve around supporting a borrower and how they would interact with a lender eventually or how they'd interact with a broker. And I think some of those were a bit of saving grace that that much technology been put in an advance because they were able to deploy it and actually get up tick on, on how you would engage in simple things like Zoom and how people would have meetings over these video conferencing. If you when you think back, if the pandemic had happened in 2010, I mean, I'm not sure how anyone would have transacted at that point because that ability to communicate this way was was going to be lost. But thankfully, I guess if there was a time to happen, it happened in 2020 where this technology was available. And so the so the way borrowers, I think, engage with some of these platforms that were evolving sort of helped at least that part. But then we saw. The challenge is further downstream that people can go get their applications. They were out, they were buying homes, they were refinancing, they were sending their deals. And the lenders and we all saw the massive delays. But this is where I think and Eric's probably going to talk to this better than I can. But the information that and the conversations we're having with lenders and had during that period of time was really to understand how technology could support them in the future, because the technologies that were around, they weren't the right technology stacks and platforms to support this because you had mass workforces, again, that were typically working together, underwriting teams, document processing teams that were in cubicles and team sets, that there was a challenge. You just pop your head over the desk and ask the question, How do I solve this challenge? How do I solve that challenge and move the file forward? All of a sudden you went home. You went home on platforms that weren't designed to be remote. They were designed to be worked within a platform, within a within a work workspace. And then all of us and then the lenders had to find a way of adapting. And kudos to them because they got through it. But they got through it with a lot of pain and suffering. I think through some of the peaks of the volume in 20 and 21. And and so I think one of the one of the things that has come out of this in the conversation we're having with lenders today is how do we actually support this new workforce? How do we support a a technology or digital revolution or evolution so that we can have remote workforces and be as productive, if not more productive? How can we do this perhaps with with lower with with a smaller workforce where I mean, we're seeing the layoffs already on the tech sector. I'm expecting the financial sector to sort of follow in 23. And if you're moving forward in 24, hopefully when we get through this and you start seeing volumes come back, how do you do this without having to restock the shelves with an in and go at it again? So there's I think there's big opportunities today to work with lenders and have lenders think about how they're going to digitally transform in the slower period of time as we push forward with things like automation, looking at how blockchain and machine learning and can can be parts of the solutions going forward into into the next. And the next wave of, if we call it. 

Fergal: [00:10:33] Well, it'll be interesting to follow for sure. Eric, let's bring you in on the lender's standpoint. How has tech transformed for you in the past couple of years, since, say, before the pandemic? 

Eric: [00:10:44] I share some similar thoughts on the topic as well as as Chris does. And I think we all agree that our audiences have become much more digital even prior to the pandemic. So they were looking to access services online, they were looking to gain and access information online, and that was already a trend that was starting. And we speak to really the pandemic pandemic, excuse me, only really accelerating that adoption from from our audiences, but more importantly, from the service providers. And as Chris alluded to, I think from a lender's perspective, we have to stay agile in our approach to technology as well, because we're really just driving innovation. We're forcing innovation in terms of old, old stocks and old technology players, and we're forcing new technology to sort of make its way into our ecosystem. And as we do that, we need to remain agile and be able to to look forward to what's next so that we can catch that and bring that in and not force ourselves into a situation where it's very difficult to to rewire or to to plug in. So I think we haven't even really scratched the surface in terms of what's going to be capable in terms of building out a true ecosystem around the mortgage industry. And I think that's that's where most most individuals are sort of looking at in terms of what's next. There's only so much we can do here to automate the mortgage transaction. It still needs to be augmented by human touch. That is not going away. So we're looking at what else, what else can be brought in to this process or to this ecosystem That service value provides value to our brokers and their customers to seek beyond just the transaction itself and looking forward to more home ownership in the ways of where the future is going with technology. 

Fergal: [00:12:44] Well, that issue of what's next really leads me pretty well into my next question, which is just about any kind of future trends that you're focused on or anything that you're thinking will come down the tracks. Eric, is there anything for you that you're anticipating down the line in 2023? 

Eric: [00:13:01] Yeah, I think for me, particularly as we expand our capabilities, as we look to drive more automation and efficiency within the process, we always have to make sure as well that we're doing it safely, securely and in the best interest of our consumers and being able to know and protect their data and understand where the data is coming from. That is primarily where we're focused on is really ensuring that we take that lens across everything that we do and protecting our customers data, but enriching the experience at the same time. I think more and more, again, we haven't really seen what's capable. I expect some new trends to emerge in 2023 is as the sort of echo of the macroeconomic environment forces us to think differently as well in terms of what Canadians need, but looking to not just point in time. Once we come through this, what's where do we need to be from here? So so yeah, I think again, open banking is going to serve us well, but only if we're ready to to to play in that space and be able to protect and do the most in terms of integrity with the data that we are playing with. So. 

Fergal: [00:14:24] Yeah. Open banking again, one that I hear time and time again is something that's going to play a big role in the future of the industry. So we'll watch that one for sure. Chris, any trends that you're keeping an eye out for? 

Chris: [00:14:37] Yeah, I'm really starting. We're starting to really look at sort of web three and the capabilities around smart contracts and blockchain as a whole. Just saw some of the challenges that Eric was talking about. Like, how do you, how do you help remove some of the fraud from the industry? How do you securitize and secure information in a in a way that's accessible but not not available to everyone that doesn't need to access it? And I think there's some real world use cases where blockchain can provide a lot of value in this space, certainly through the servicing and and securitization side, I think there's a lot of value. I think there's I think one of the challenges lenders still see today is that it's still a very paper driven process. As much as I think we'd all like it not to be. And and you could you could rely on all these third party providers to provide all the data required. We're still not there yet. Certainly open finance, open banking are going to will help facilitate some of helping remove paper from the process. But how do you validate that information? And do we have to validate it four times because an application comes in and gets validated by the originator or the broker gets validated again by the by the lending institution, it probably gets validated twice within that process. 

Chris: [00:16:03] And then you want to move this book of business on to someone else and they're looking at the same paper or they're hopefully looking at the same paper if it's available. And so how do you how do you put a trust stamp on that document from day one and use the data points from that to facilitate a faster origination and then and then make it available so that at those different checkpoints that information is available at a click of a button rather than let's go pull the file and spend a week looking through it and making sure all the information's there. So that's something we're really keeping an eye on. You know, blockchain and crypto and all of that is taking a big hit. And I think it's a scary word right now for a lot of Canadians. But there is some real world use cases and the technology is sound. It's just a matter of how you how you approach it. I think we're still several years away from really deploying it across across the industry, but I do believe it's the future as well. 

Fergal: [00:17:01] Okay. Again, that'll be really interesting to keep an eye on next year. And just in terms of looking ahead and your companies in particular. Eric, anything that Community Trust is focused on or developing in terms of tech for next year that you want to share? 

Eric: [00:17:16] So again, I think as we mentioned before, we're really looking at taking deeper dives into each component of our today of our origination ecosystem and seeing how we can provide faster responses, faster decisioning, faster turnaround on document reviews, smooth closings, making sure that we get that right, and we match that with the experience that we that we intend to deliver to the industry. But with that comes, again, just an open mind and our ability to stay agile and responsive to the needs as they change. So we're always looking for ways to drive automation to make things faster, more scalable as well, but also providing equipment to and tools to our own employees to help them get through these transactions faster with better informed decisions as well. So really looking to continue to drive and advance our efficiencies through technology. 

Fergal: [00:18:19] Okay, fantastic. And Chris, how about it? One more. Anything that you want to share? 

Chris: [00:18:24] Yeah, we're really focused on maybe some of the similar things. It's improving some of the automation we've already built into our platform and leveraging tools like RPAs and things like this to make it more refined and customizable by lender, but more specifically around document automation and, and improving how how that workflow goes from from application. The documents and information that you have to collect for due diligence and trying to automate that that flow with with with tools like being able to extract the information, being able to validate, being able to check for manipulation and giving those sort of green lights so that when you have your humans, you're involved in that process. They're working on high value work rather than low value work, and really trying to make that a more streamlined and faster, faster approach for ultimately getting that that deal funded faster. 

Fergal: [00:19:26] Good stuff. And just before we wrap things up, I just want to ask if there's anything that you're encouraging mortgage professionals to keep top of mind on technology and the current landscape. We all know that things are changing in the mortgage market, but in terms of tech in that context. Eric, anything that you would say to brokers or to mortgage professionals? 

Eric: [00:19:46] Yeah, I guess I would share that. We're really getting everyone is getting better transparency, better insights, richer data, and with with rich data. And with that comes power. And with power comes responsibility. And we all sort of have a job here to do our best to protect the integrity of that data, to protect our consumers as we navigate through the changing landscape. But as an alternative lender, what I what I would like to offer to our partners is as we as we move forward and understanding what data really does to the process, it makes it less about a more common sense approach to lending because we have the opportunity to access such rich data. And but this the ability to use that data to also translate or to to tell the story brokers especially, we'll need to become more familiar on how that data can be used to serve their clients better as well, and not just to tell the story, but to use that data, use the facts in support of that application that allows us to speak on common terms, I think. And while our our guidelines certainly support common sense lending, it needs to be paired with the data that we're that we're getting to make sure that we are doing the best in serving our customers right. And by that, I mean the great Canadians that we have all across this country. 

Fergal: [00:21:31] And Chris, for you, anything that you think mortgage professionals need to keep top of mind in the current landscape. 

Chris: [00:21:36] I would turn to data as well. Sort of following on on Eric's thought maybe a little bit differently and thinking about the climate that we're in as a trying to serve the Canadian market in some of this challenging times and how to maintain your book of business or grow your book of business, even in this in this time, I think there is great value in that data. And certainly you have to be aware of how you're using it. But the tools that exist today allow you to capture so much information that there are technology providers, other fintech providers right now, that it can help find ways of turning that data into real, real opportunities. And there are. The one thing I would say that if you're not leveraging some of these CRM tools and the ability to capture that type of information, you're probably letting yourself and your business down a little bit because I think if you look at some of these these newer entrants, these direct to consumer type lenders, a lot of them are leveraging the data to understand when someone's looking to buy a home, when someone's ready to refinance. There are propensity tools in market today that can leverage this data to make these predictions, these sort of predictive analytics for you to help help with your engagement and how you and when, I guess is the right word when you're ready or when you should be ready to engage with your customer and in a different ways, you can do that today. And so I agree with Eric that data today is probably the one of the more valuable things that you you capture on a daily basis. And it's just being responsible with it, but also understanding that there is real value in that in helping grow your business. 

Fergal: [00:23:29] Okay. Great stuff. Well, look, I think that's a good place for us to leave it today. It was really interesting to hear both of you sharing your views on some of the ways that tech will continue to transform the mortgage space in the future. So I want to thank you both for coming on today. And we'll, of course, look ahead with interest to what's in store for next year. 

Eric: [00:23:45] Thank you so much. 

Chris: [00:23:48] Thank you very much. Appreciate it. 

Fergal: [00:23:50] That just about does it for today's edition of CMP TV. Our thanks once again to Community Trust and Fundmore.ai For joining us today. Thanks to you for watching. We'll see you next time.