HousingWire’s Awards Spotlight series showcases the individuals and organizations recognized through our awards. Editor’s Choice AwardsHousingWire Nominee 20Submissions for the 24 Tech Trendsetters Awards will be accepted until Monday, September 30th. To nominate, click here. someone.
One of the takeaways from HousingWire’s recent AI Summit is that artificial intelligence (AI) is rapidly transforming lending by streamlining processes, reducing costs, and improving the overall borrower experience. As a result, lenders can reduce costs while scaling their business more effectively, responding faster to market demands, and providing a smoother, more user-friendly experience for borrowers.
HousingWire sat down with Kevin Wilzbach, director of product management at Wolters Kluwer Compliance Solutions and HousingWire Tech Trendsetter for 2023, to discuss how AI and digital lending solutions are helping lenders navigate a volatile market. From automating workflows to meeting customer demand for improved borrower experiences, Wilzbach shares key insights about the future of fintech and the technology investments that can help lenders stay ahead.
HousingWire: What is the most surprising technological innovation you’ve seen in recent years?
Kevin Wiltzbach: Without a doubt, the increasing use of AI, and GenAI in particular, has been transformative in the banking industry. Perhaps what is most surprising to me is the relatively rapid speed of its adoption and the various ways in which lenders and other financial institutions have begun to explore how to unlock the potential of AI-generated data as part of their decision support processes. AI has certainly been transformative, transforming raw data into actionable insights for lenders, providing a competitive advantage in the process. Today, technologies like natural language processing and machine learning have moved out of the lab and into something more tangible that commercial enterprises can leverage.
Not surprisingly, we are increasingly incorporating AI-powered capabilities into our offerings. This is primarily driven by client demand for enhanced lending workflows and improved operational and analytical capabilities. The ongoing input from our banking clients has immensely aided our efforts towards developing integrated solutions that enable lenders to become more agile and scale their services in line with market demands.
HousingWire: Where do you see the biggest need for housing technology? What problems still need to be solved?
Kevin Wirtzbach: While the industry is waiting for relief in the form of lower interest rates, there is no short-term solution to high home prices. We also have a housing supply problem. We clearly need more inventory. Increasing the current housing inventory and lowering interest rates would improve home affordability.
However, we also need to work to reduce the overall cost of lending. study According to Freddie Mac research, loan origination costs have risen 35% over the past three years leading up to the study, now costing retail lenders more than $11,600 per loan. This is not sustainable for a healthy mortgage industry. Additionally, the regulatory environment is constantly changing, which places increasing strain on the lending industry. Smart and deliberate use of technology, such as the adoption of digital lending technologies, can help lenders better manage today’s dynamic regulatory environment while also providing a means to speed up and streamline the loan origination process from application to closing.
HousingWire: Will the adoption of digital lending boost your mortgage business?
Kevin Wirtzbach: Our experience working with lenders has shown that the use of digital tools increases automation and engagement with borrowers, resulting in a faster, easier and more fulfilling lending experience. Consumer behavior is a strong driver of digital transformation, and adopting digital tools earlier in the lending process improves the borrower experience.
Housing Wire: Where would you advise your clients and colleagues to focus their technology resources in the near term to navigate today’s market environment?
Kevin Wirtzbach: Lenders recognize that leveraging technology and scaling efforts accordingly can substantially help them weather market ups and downs. For example, adopting digital lending solutions provides a great opportunity to reduce costs and streamline operations. While investments and process changes may seem counterproductive during market downturns, lenders are encouraged to proactively plan for the next big market recovery that will impact first lien and refinance volumes. Cutting back too sharply could impact an organization’s readiness for expected increases in lending volumes. Recent comments from economists and the Federal Reserve’s half-percentage point interest rate cut announced on September 18th are encouraging signs.
Our advice to lenders is to keep your foot on the gas. Now is the time to prepare for the market recovery. If you work with third-party service providers, consider providers that offer integrated services rather than point solutions so you can ramp up more quickly as market conditions improve.
