[David] Let’s get over to you Mr. Pollack. Always fun to have you here. Your thoughts on there’s, it’s just a ai, ai everything and more we look at it. You raised a really good point, or Alice is it’s the data is really turning out to be the most valuable thing here, because now how we manipulate the data, which used to be like the polygon Research. So we used to have companies like that, but now we have AI that goes in and manipulates it so much more quickly. And actually quite a bit more effectively.
[Allen] I will let’s just reason with that topic for a quick second. You go to a company that has years of knowledge and ways that the customers have asked Polygon to look at data and how they interpret the data. No AI engine’s gonna come in and just do its best. Remember when BI came to our industry? Oh yeah. And it was, you could go out and you could build a thousand dashboards. But is that really what people are interested in seeing? And are you getting the best practices of what other lender and a bank and non-bank executives want to see? So the benefit of going to a vendor is best practices, and it’s what they’ve learned over many years from your peers and the ability to benchmark thoughts and data. So yes, you could do things with ai. I don’t wanna say vendors will go away. They’re not, but you’re going, we’re gonna change a little bit how we perceive and what we really need from vendors, and maybe we’ll help vendors out a little bit. But I think it’s very important, as we mentioned one specific vendor right there, that they still have tons of intellectual, and yeah, that they put into everything there. Clearly my coffee didn’t work well enough because I lost a word in my thoughts there, but I traveled to Dallas today up early morning on the flight, in the airport, on the Uber. So here we go. Alright, let’s talk about something interesting and I’ve got some mortgage AI topics we’ll get to. These are always funny, so I gotta bring ’em up. The first one, David. I use AI to save time. Then I spend all that time fixing what it gave me. So are you really saving time with AI or are you helping your brain think better? So speaking of saving time, I’m gonna get to that at the end of my small segment here. Check this out. I don’t know how many of you have a Tesla? I have one I talk about all the time with people. I use the self-drive every day. It’s amazing. There’s somebody out there that a self-driving car stopped. I don’t know if it was a Tesla or not. It just, this is the headline. A self-driving car stopped for a plastic bag. It refused to move because it couldn’t classify it safely compared to a human that can see the plastic bag and just floor it and drive it over it. Interesting. So AI tech, it’s doing good. It’s getting better. We got 20 cameras on the car, scanning everything, but it didn’t know that it was a plastic bag. Alright, let’s talk about VPNs folks, if you are accessing things, let’s say you’re doing your own Claude project or you’re using AI to, plan your dinner, but you’re not allowed to use it on your corporate machine. There is a platform out there, it’s called. Tail scale, T-A-I-L-S-C-A-L-E. You install it on your home computer, you install it on your work computer, and it creates a VPN network where you can connect to that computer. You can remote screen to it, you can do different things. It’s used on the enterprise side as well, but they sell a personal version. There’s actually a free version, and then the it, ranges from $20 up at a month and moving forward. Yeah, I mentioned it, not because there’s not a million other VPN solutions, but if you are accessing your home network, it could even be for your smart home turning lights on and off from your phone, whatever it is. You should be using A VPN and should have a secure network. You should not be opening holes in your router through, your Xfinity or cable modem. So check it out. Tail scale. Yeah. There’s other ones out there, but I just wanted to bring that up to everybody.
[David] I just opened it up. I’ll check it up as soon as we’re done.
[Allen] Yeah. So let’s talk. I’ve got so many topics today. I’ll save one or two for next week, but let’s talk about a shift that’s happening right now. We all know it’s there. nobody needs to say, oh my God, I can’t believe you brought that up, but Right. It’s the shift is in the mortgage industry instead of replacing the some interface itself, right? I think we’re moving to a point now where we’re trying to replace having to log into 10 different apps, right? People aren’t just asking now for AI to do things across systems. They want AI to automate what happens automatically across those systems. Back in the day, we talked about lights out integration, right? No more swivel chair where you swivel the one screen and swivel to the next one. Now we got the lights out, but you got all these systems, you still have to go through ’em. Now we’re talking about having AI being able to execute tasks and robotic processes across these. Automatically. And what’s interesting is there’s a number of things going on. Check this out. There’s a company called Jazz X. I’ve never heard of them. They showed up in the Crisman report. They’re an AI platform positioning themselves as a full mortgage operating system. So get that not an LOSA full mortgage operating system. They’re end to end. It’s designed to run workflows, not just support them. That’s critical what they said, folks, it’s running the workflow, not just supporting them. And they’re positioning themselves in a, as an alternative to the traditional LOS and process stack, they’re claiming that they can replace fragmented systems with a single AI driven platform, and they will increase. And by the way, everyone says that they will improve, increase productivity and scalability across teams. So that’s generic stuff. They were founded recently, 2024, backed by a big AI investment firm. And they’re positioning themselves as AI workers that execute tasks. And they say that they’re built for the execution layer, complex regulated workflows, mortgage due diligence, et cetera. 50% faster closings, 90% error reduction. Hats off to those folks for what they’ve done. Yeah,
[David] I’ve got that. It’s Jazz. JAAZ zx.ai. Folks, when you wanna go check it out.
[Allen] Yep. Another AI news item is req, R-E-L-C-U, and I apologize if I’ve said that incorrectly. Other agen AI platform expanding across mortgage and deposits. So they’re focused on conversation, retention and cross sell. They sit on top of existing systems and they expand beyond mortgage. When I say that, that means they go into deposits and broader banking, but the reason why that’s critical is because it started as a mortgage. CRM, they understand the more complex component of lending, and then they’re able to tie all the data together. I don’t know, David, back in 2017 or 2018 when I worked at Fiserv, I was on the digital banking team. And my job was to bridge, online banking and digital mortgage together. That’s back when digital mortgage was a big thing. And that’s funny that we’re even saying that. And I sat at a lot of conference rooms around the country at large depository institutions, billion dollars and above, and they all said the same thing. We want one customer experience. I want to throw them financial advisement. I want to get them a new bank account. I wanna pay off their credit cards and I want them to get a refinance all in the same single application and experience. So that’s really big. I think we’re gonna get there further with partnerships with AI platforms and with these depository institutions leveraging technology, I think they’ll finally get what they’re looking for because a lot of them had trouble investing in too much of the stack. If so, call it. And then integration to other components. This is not a dig on Fiserv. It’s everything. Open banking was a big thing, but integrating with these systems was very difficult. Or you needed a complex team. So the access to data, the access to regulated, compliance on how you can have the data, you should have it, but what you can do with it, where you can put it, I think things have loosened up. So anyways, that’s interesting. And then Vesta, by the way they’re an AI driven communication platform and the reason I brought them up is because you’re talking about borrower communication, preserving the connection with the borrower, a lot going on there that they’re doing. So check that out.
[David] That’s a avesta, A as in A-V-E-S-T-A
[Allen] No, just Vesta. VE SST a. Just Vesta. Yep. And by the way maybe I’ll bring it up next week. I’ve got some really interesting things going on with AI on my own projects. I’d love to share more about it, but we’ll do that next week. You sent me an article that you asked me to take a look at, and it was in National Mortgage News, and it’s how AI is supporting bank mortgage growth plans. And what’s really interesting about the article is it says exactly probably what we thought it was gonna say, to be honest with you. If I go back to the beginning of the article that you sent me I obviously used AI for a quick little, pick me up because it was just when the, when our program started here, but it said 2023 to 24 is cost cutting and layoffs in 25 to 26 is growth mode, but smarter. And what they’re basically saying is that, banks are not planning major layoffs. They’re doing 35% increase in staff, 36% holding steady, and only 29% are cost cutting. That’s in national mortgage news folks. I didn’t make that up. Yeah. And the translation is they need more production, but don’t wanna rebuild bloated ops teams again and so AI is helping a lot of places trying to get more capacity without hiring, automating the grunt work and being more consistent with execution and obviously the customer experience, right? Moving borrowers much faster. So there’s a lot of different opportunities. It’s a great article. You should check it out. I’m sure you’ll have a couple things you wanna mention. Talk about that. So I’ll pause there, but that’s what, yeah
[David] And it’s because what I found interesting about that is because the Basel rules that are changing is gonna cause banks to come in. Banks have to exit quickly because it seems like the regulatory body the CFBs of the world come after ’em and put ridiculous fines on them to the point where they go it’s not worth being in the industry anymore. That’s they exit out. So this boom bust cycle of banks coming and going. I think with AI it allows them to come in more quickly and exit with, without having the pain of cutting staff. That’s why I thought there was, yeah, there’s aspect, a number of aspects about that article. That is really good. Yeah. Listeners, if you go to the show notes from today’s podcast, we will make sure that you have that link. So good. What other good things do you have for us, my friend?
[Allen] Oh it’s funny you asked. I have more. So another topic, David, is the cost of ai. What’s really interesting is that, it looks cheap on the surface to get AI but behind the scenes it’s actually really expensive to run, especially for mortgage vendors. And forget all the taxes that. integrate with me tax that’s out there, right? You have to have the servers, you have to have the infrastructure. The AI stack is constantly changing. So what you invest, you have to keep changing how you invested in the teams you have. And the vendor. Here’s the reality to the vendor folks. It’s not just the cost, but it’s the security and the compliance vendors can’t just use the cheapest AI models or offshore data anymore just to save money. ‘ Cause now they’re dealing with borrower, PII and another model that can hallucinate and do things. They’re dealing with regulated workflows. There’s more regulation coming and audit requirements. And you, the lender, have audit requirements so they can’t just lower the prices. So they’re stuck in this spot where they’re trying to sell you tools to reduce your costs, make you more efficient, but their own AI costs are still high and they can’t cut corners without creating risk. And you have to absorb some of that cost as well as new costs. So the, chicken before the egg kind of scenario. So if you’re implementing ai, raise your hand, I guess I could say, if it’s starting to cost you a lot of money and you haven’t figured out where the savings are coming yet.
[David] AI is not cheap except for those of us that are using it. It’s not, costing’s hardly under the barrier of entry is pretty low. But man, are there a lot. So the billions of dollars that’s gone into investing to create these tools for us that we get to use for a relatively very affordable price. Very interesting. So you’re in Dallas. You’re traveling around. What are things that you’re hearing out there in your travels, Alan?
[Allen] I hear a lot of excitement. Originators and branch managers are excited from what the folks that I’ve talked to to engage with customers. And, people are, seem to be very positive about business. I think there’s some excitement, there’s some little pockets of the country, places you’d never guess, like New Jersey where there’s not enough inventory. And so the prices of homes, borrowers are being enticed to finally list their home rates aren’t gonna move right now they’re where they’re at but you’re getting people bidding on homes and because it’s springtime and everyone’s, defrosted, they’re feeling good. The windows are down. I think people feel positive about what’s going on there. Everybody loves ai. People don’t know how to use it beyond, the low barrier to entry and helping with emails and different things. And some people don’t want to get distracted and they’re very careful about it, but people seem to be very positive about what’s going on right now.
[David] Yeah, I agree with that very much.
Allen Pollack
, Chief Operating Officer, Tech Consultant
Allen Pollack, a Mortgage & Financial Services Technology Advisor, is a subject matter expert in the mortgage origination process along with software product management and software development.
In today’s financial services push to all things Digital, Allen has been helping lenders and financial services solution providers align their digital transformation and technology strategies by removing the human element of risk, and automating processes that drive efficiencies and margins into profits.
Over the course of his career, Allen has co-created and developed technology business models that have birthed highly successful, innovative solutions and companies.
Allen co-founded and served as CTO of New York Loan Exchange (NYLX), a loan product eligibility and pricing engine (PPE) that made an immediate impact on the industry, scaling the company quickly and forming partnerships with multiple mortgage and financial lending companies. In 2012, Allen was a co-founder of a merger between NYLX and Aklero Risk Analytics that created LoanLogics, A Mortgage Loan Quality and Performance Analytics company. Allen served as CTO where he continued to bring new and innovative product solutions to the market that made a significant impact to mortgage lenders that reduced risk, scaled business channels, and grew profits in a very competitive and highly regulated market.
Allen is also is mortgage and finance technology contributor on a weekly live industry podcast, Lykken on Lending, and is launching a new podcast soon to be released, TechStack Radio, dedicated to technology and innovation in Financial Services.