We are diving into the dynamic world of lending and financial institutions. From traditional banks to innovative fintech companies, the lending landscape is constantly evolving, shaped by changing market trends and technological advancements. In today’s episode, we’ll explore the latest trends among lenders in today’s current market. From the rise of digital lending platforms to the increasing demand for personalized financial solutions, lenders are navigating a landscape that’s both challenging and full of opportunities. But amidst these changes, one key player stands out in assisting financial institutions to adapt and thrive: Finastra. As a leading fintech company in the world, Finastra provides cutting-edge technology solutions tailored to meet the evolving needs of lenders. Joining us today is Colin Gazinski, a Senior Solutions Consultant at Finastra. We’ll delve into how Finastra is empowering financial institutions with innovative tools and solutions, enabling them to streamline operations, enhance customer experiences, and stay ahead in today’s competitive market.
Trends Among Lenders in Todays Current Market with Colin Gazinski of Finastra
Listeners, I’m really excited to have someone that I’ve been trying to get on this podcast for a long time. I’m talking about Colin from Finastra. Colin, help me pronounce your last name correctly.
Gazinsky.
Gazinsky. It’s not that bad. It’s easy. Anyway, I’ve been known to slaughter names, Colin, but anyway, so good to have you here. Colin, You and I met at a Finastra reception that you had up in Chicago, that the company had there in Chicago that I spoke at and from it just immediately, how you just click with some people. That’s what happened when you and I spoke. And so, I’ve been so excited, but wanting you on the podcast for some time, and I’m really looking forward to getting into it because you represent the tip of the spear of what’s going on, the heartbeat, you got your finger on the pulse, whichever way you want, what’s going on within the lending group. And so Colin, great meeting you at the conference, but tell us a little bit about yourself and your background, if you would.
Sure thing. So, I am a Senior Solutions Consultants specifically for the mortgage product with Finastra. I’ve been here for going on 11 years this October prior to being here, I was a residential loan officer for equal, just a little bit less than that period of time. So about 10 years in the trenches originating loans and doing what the client’s customers that I talk to on a daily basis, are really consumed with. And I started here back in 2013, end of 2012 and. I those can remember it was a shift in the market at that time, not a drastic or anything like what we’ve seen in the recent year and a half to two years, but a shift nonetheless, that caused me to start weighing my options. And we used mortgage bot actually. And so, I was recruited by the company I worked for to come in and be a trainer for the product. And it seemed like a great time again, because a lot of my business was very refi heavy. I certainly have a purchase portfolio, but I did a lot of refi’s and so when the market shifted and we saw rates going a point to a point and a half higher than where they were. A lot of my business just dried up. And as a commission only loan officer for majority of that time that 10 years it was at the time expecting my first child. I said, this is a good time to make that shift into the tech side. And so, I did, and I started with Finastra, which wasn’t Finastra at the time, but mortgaged by Rayner, and trained the clients in their last leg of implementation on the mortgage byproducts and every week was in a new part of the country working with a new client. And so, in that time, that 3 years that I did that job I just soaked up so much information and knowledge on how to really do this job and originating mortgages and, processing and underwriting. And, while there’s certainly these universal consistencies and, processes so many different ways to do this job is really what I discovered. So many different Workflows and departments involved when you start going into different size institutions. And I did that for a while. I had a few more kids and my wife said, Hey, you’re not going to be on the road. Every so you need to figure out a way to either find it or get some help. Yeah, let’s just stay at home or at least, in the state. I moved to the solutions consultant role around that time and have been doing that ever since. And so my job now, and has consisted of, working with prospects and existing customers really to evaluate how our technology can pair with some of their needs and objectives and change and, business goals and so that’s what I do. It’s really, a big part of my job. I think certainly net new business, but really nurturing the relationships and the partnerships with a lot of our existing customers on the mortgage bot side. And I still love it to this day. I get a lot of just fulfillment and a lot of just good energy from this industry, despite all of the changes good, bad or indifferent that have come along, especially in the last couple of years. But it’s really just all about problem solving and trying to figure out, how can we make our technology really fit in the grand kind of scheme and the whole puzzle, and I enjoy that enjoy applying it.
What’s obvious is you have a passion for it because you always have the smile on your face and you’re always enjoying the challenges and we are dealing with some challenging markets and from Finastra’s perspective, and certainly from your unique seat that you’re in, you’ve seen a lot of financial institutions exiting the industry and then some others using this time to retool and rebuild their processes. I’d love to get your perspective on what you’re seeing financial institutions, the role in mortgage lending, as we move forward, we’re certainly seeing IMBs independent mortgage bankers struggling, but it seems to be a resurgence of the financial institutions.
Yeah, I agree. I think we’re in a really interesting time. In the mortgage lending or just lending space overall. I think that it’s an exciting time for many reasons. I suppose your level of excitement would largely be dependent on what role in the space you currently fill but I get the pleasure of working with financial institutions day in and day out that are just working towards the same goals, but, each of them in a very unique kind of position and set of challenges and approach to finding more efficiency of course, doing higher loan volumes. My job working with CEO, the president’s, processors and originators and certainly giving me a wide spectrum of kind of the wants and the needs, most of it is on the higher level, all about cutting costs and more operational level is just how do we reduce milestones within that workflow. I feel like from a technology standpoint, we’re certainly, in the most productive time when it comes to eliminating some of the repetitive time consuming tasks which is great because doing this is allowing those employees to focus more on value added activities and services that, are improving the loan process overall for consumers which is important I think historically there’s definitely been moments in time where obtaining residential financing specifically, has been more complicated than other times, and usually it’s in and around introduction of new regulations and thankfully we haven’t had any major regulatory, changes big updates there, which is great. And I think that this process what we’re looking at in terms of, getting loans originated and closed. Is only going to get more streamlined. I think more consumer friendly, I think easier for financial institutions to embrace technology and leverage it to their advantage. I feel like, that said I still do encounter, institutions that are resistant to the change and are insistent on keeping more antiquated and more manual processes in place. And for them, this is probably not as exciting of a time as they are coming to terms with eventually being phased out and probably eclipsed by their competition I realized that this may sound certainly one sided coming from somebody that works for a fintech, the fact of the matter is undeniably I think convenience, ease of use, and just time savings are universal wants in all industries but most importantly, I think in this process of securing, financing and upgrading or implementing new tech during a period that is tough in this market is certainly risky, but it’s probably even more risky to fall behind, when volumes do begin to surge again, and that is certainly the basis of many of the conversations we’re having and have been having most financial institutions do recognize that the use of origination tech is critical and in all market conditions, course, but our two cents really again, the repeated kind of message that we’re here to hopefully nurture is that in slower markets, I think it provides just enough breathing room to implement tech in a way that’s not possible when pipelines are full. So, it’s a very roundabout way of answering that question. But, I feel like right now what we are mostly seeing for the institutions that are here and forward thinking and with plans to scale over the next several years it is mostly. How do we start leveraging technology better and more efficiently? How do we invest in the right parts of these solutions and technology that makes sense for us? So that we’re around for this next kind of uptake of business and that’s. we’re here to just, again, guide customers through and just, help provide them with the tools that we make available.
When you talk about efficiencies and everyone’s looking for a lower cost of operations, that’s universal, especially in these times and then they’re also looking at efficiencies, which lays into lower costs. But how would you say customer expectations are beginning to become more paramount as financial institutions start considering technology and it playing a bigger role in the future.
I think, I have to always be careful of how I kind of frame this scenario. The mainstream media has made the concept of push button, get mortgage a normal, kind of thing. And like I said, ease of use and convenience and quick turnaround times are, expected, communication and transparency is expected. And when we’re talking to institutions that might have some version of this, but not quite the full kind of suite of technology that could assist with it. It’s about filling in those gaps. I think, again, customers have been conditioned, especially with covert over the last couple of years to expect details transparency about these transactions and, if they’re going to their community institution, which is a big part of Finastra’s customer base and our targeted market, it’s community institutions, credit unions, community banks. The great thing about the solution is it does offer itself to many different ways of doing this business of residential lending and wholesale and correspondent and multiple lines of business and various channels, but community institutions is the targeted kind of niche and just really for those that we talked to that aren’t really accepting of, I think this change in borrower mentality and behavior and consumer mentality. It is about delicately but effectively getting them to realize, Hey, look, if you’re not showing rates and costs, some of these products online, your customers are going to go somewhere else to apply and get that information and then it is all about keeping that retention at the highest levels possible, and we don’t want our loyal customers, going to a Bankrate or Rocket or Loandepot or whatever ones are really around and taking that market share, competing with them on a level that technology offers the ability to, I think, is certainly very obtainable for many institutions, and it’s something that they should be considering just to be able to enter that competitive kind of space. I think automation first having a dynamic as they enter their information, the applications should be changing and molding to their details if we’re just filming out, a text form and maybe a lead inquiry, people’s patience and attention spans are really short, and so getting shorter and getting shorter and, we’re talking about multiple different generations of borrowers at this point in time, but I think the institutions that are probably positioning themselves for the most success are the ones that are thinking about the Gen Z’s and Millenials and how they operate and these are going to be the people that are, doing the financing
What do you see as the trends of that demographic group, the GenZ’ers, the next generation of first time home buyers, how are you seeing that change or what are you hearing from financial institutions? they anticipate the change and how is Finastra responding to that?
I think that it’s unavoidable, right? It’s inevitable. They are the ones that we should be catering some of these products and functionalities to. Nobody likes to go into the branch anymore. Nobody likes to pick up the phone anymore. If self-service is not a main component to your technology and your solutions that you’re implementing in this space. Then you’re going to lose some of that market share and so self-service, that being said, it’s always a fine line for us and in my conversations with institutions to go into, especially a community institution that might be in a rural space, right? And say, Hey, your customers expect this push button, get mortgage experience. And I’ve learned, the hard way enough times to really say, Hey, I know this isn’t your business model, but, be considerate of the next generation and the one after that, that is, going to be keeping this business alive and you’re sustainable. I think again, there’s just a very kind of delicate way that in some cases we need to frame it and just say, look, if you’re not considering these factors, and stuff like this, absolutely. You need to be.
One of the things that Finastra has that is a real appealing to the financial institutions is the wide range of products. You guys have acquired a lot of different companies over the years. You think about your flagship product that you guys have had around forever and it’s just such a real advantage. When you look at the financial institutions and the role they play in determining number of companies you’re going to be acquiring what you’re looking at. Any insights to what you’re seeing as far as the changes they’re saying, Hey, we need to start focusing on this. I’m thinking about ChatGPT, AI and the demand. Are you seeing more of a demand there?
Absolutely. I think this is something that is probably referenced in 80 percent of the conversations we have. not a little bit more, I think AI and more automation is just, I want to say the buzz, topic or word or functionality but it is certainly something that people are hearing about. And again, it depends on your position within some of these organizations. That will really determine, how forward you are, how inquisitive you are about it. If you’re a processor there’s a 50-50 shot that you might want more automation in your job to make it easier. The other side to that could be somebody that’s threatened in losing their job. So, we just want to be always very delicate and framing, here are the things that are certainly adding to those efficiencies and making this process smoother for your staff, your customers, increasing that better customer experience, but, we don’t want to talk about threatening people’s jobs, right with that, this is the direction that this industry is moving more automation. I think the advantages in AI certainly right now are, just major efficiencies for compliance reviews and fraud detection. That’s the mind loan offerings. I think property valuations underwriting data and verifications processing. These are all, I think, top of mind for lenders that are shopping some of these solutions. I think it can certainly bring more efficiency, Overall. They’re, things like chatbots, for example, virtual assistants that can provide 24-7 support and customer service. And again, like I said, the line, we find ourselves walking and some of these conversations is working with lenders of all size. But, again, trying to enhance that customer engagement and, there’s tons of benefits here. I feel like a lot of them are theoretical still at this point. And, I read a stat that 65 percent of institutions out there, certainly familiar with AI and only 7% have implemented another 22% are trailing the use of it on a somewhat limited basis. And I believe this is a Forbes, coupled with a Fannie Mae survey. And there’s definitely advantages. This is the direction inevitably again, we are moving towards. Finastra has got a number of features and functionalities that we’ve just recently launched on the MortgageBot side specifically, add less manual touch points, workflow automation, validating, verifying documents, OCR, data extraction taking data off of documents to validate and verify compare with what application data. So that’s awesome. Always want to make sure that I’m looking this from two different perspectives. And one of the things that is also, we’re just considering and mentioning is that I [think still,, hallucinations, are significant problem with AI right? Still. In other words, they’ve been known to make up some things that aren’t fact and pass them as such and in that case, nothing seemingly that is generated by AI can go to production. I think without some human form of checking right now. And I think another concern with AI, which, again, think fully embrace and are moving towards implementing more of this functionality. But just something to consider is, the presence of unintended bias in AI, in qualifying and making decisions about bias and that may be seeping into some of the programming data and know the CFPB has definitely issued guidance on how to use this and it’s something that we’re all just learning together. I think ultimately AI, with everything is going to make us smarter, right? Some might argue that it’s gonna make us less intelligent, but I feel the opposite. I feel like it is, going to make us all smarter as a result of, the information that it’s able to provide us, and so I think we’re very optimistic. We’re, continuing to implement and look at options that increase that production and efficiency and leveraging it. Yeah, some institutions are gung-ho, they want nothing but AI and automating this, and then you get a number of institutions we, talk to that are, still, they, like their staff and the manual intervention that comes with those processes. And so, finding a hybrid at this point, I think is where we’re going.
When you see the desire of institutions one of the things has always been financial institutions have been a higher touch. They are probably more so than others, but as you were commenting, we’re seeing more and more of the branches going to no tellers, it’s all automation. How is that going to impact lending? Are you anticipating just everything going remote?
Yeah I am. At some point in time I feel I referenced the processing kind of threat to that job and role. But I don’t think there’s a role that is exempt from having AI or some form of kind of automation affect its sustainability. I feel like originators as well, obviously these are the sales folks and the relationship builders. Many institutions especially in that community market space are going to be slower to adopt this, but if you can have a digital loan officer, which, can communicate with a customer in the same capacity and provide the same level of detail and responsiveness sometimes maybe even better than a human loan officer, right? It’s silly to think that this isn’t going to change not only the job and how it’s performed, but also the roles, within the process. So, I feel it is coming and it is something. That institutions should be looking into and of course complete completely replacing loan officers in some of the sales forces I think is quite a ways out yet, but yeah, it is it, the operations folks, right? The processing and the underwriting. We’ve had automated underwriting for decades, with Fannie or Freddie. And so these processes are really only improving becoming a little bit more airtight and as a result of that, there will be over capacity issues that Institutions identify and they react to, in whatever way that makes sense for them.
We’re seeing overcapacity right now in the mortgage industry at record levels because we grew so quickly to handle the last surge of business as a result of the super low rates. Now things are going on are about mortgage volumes are holding fairly strong. We’re having a decent year, 2.1 trillion. That’s a good number. Any sense on the market share shift? Is it shifting more? Are you seeing evidence that the financial institutions are successfully picking up ever increasing amounts of market share?
Yeah, I think so. It certainly does depend on a couple of things. I feel us in the community institution space and with that being majority of kind of the customers I work with and assisting, I feel like they are picking up more market share in comparison to years prior, where you did see like the Rocket and really take off.
That’s where they’ve fallen behind is they’re getting out to go get the business where, so they had been a mortgage banker has been more aggressive about it, but yet the advantage of the financial all these other business channels and relationships with the consumer that keeps them in contact. How much are you seeing as far as the integration of these very businesses, the consumer lending, the commercial lending with the mortgage industry, are you seeing that to be a significant strategy that works for financial institutions and getting new business in mortgage business?
Yeah, of course. I feel like from a technology standpoint and implementation and vendor management, nobody wants to deal with 10 different vendors for all these different solutions. Also, I’m talking about branch employees and obviously admins and executives but the customers would much rather have their account opening process and their consumer lending application and their mortgage application all resemble the same flow. And that is one of the credible advantages that Finastra has always had is just the parallels that the multiple different products we offer, which are all, coalesced and the shared experience, and from consumer to again, account opening to business to commercial, to some mortgage, these applications that we offer all again, follow the same kind of look, feel, design obviously different for different types of account opening and financing. But the consistency is there and so as a consumer, if I’m dealing with my organization and this year I’m applying to purchase a, investment property. And then next year I’m doing a refi on my owner occupy. I want that process to be simple, I want it to be the same and consistent. And yeah, I feel like that is a huge need and focus for institutions that we’re able to really come in and check that box.
Now, Colin, we could get on and keep talking about the advantages for financial institutions. There seems to be a shift happening. I’m really grateful that you took some time to be here with us today. I definitely want to have you back on a regular basis, especially as we start getting your perspective on what you’re seeing from within financial institutions. I think that’s a perspective that you uniquely bring as a result of your role there at Finastra. Thanks so much for taking the time to be here. Thank you so much.
Yeah, it was a pleasure.
You bet! Folks, we had Colin Gazinski of Finastra on as a guest, so grateful to have them as a sponsor as well. Be sure to check out Finastra and their suite of products at finastra.com. Thank you.
Hey listeners, this hot topic would not be possible without our sponsors. I want to say a special thank you to our sponsors, Finastra, Byte Software, Lender Home Page, Angel AI, Truv, Mortgage Bankers Association of America, LendersOne, The Mortgage Collaborative, Modex, Mobility MMI and Knowledge Coop. There’s so many good sponsors here, and we’re so grateful for each one of them. Be sure to check out each of those sponsors and their spots on our website, Lykken on Lending under the sponsorship page. Thank you!
Important Links
Currently my role is a Senior Solutions consultant with Finastra which I have been for the last 8 years, prior to that was a trainer for the mortgagebot product working with customers on their final steps of implementation.
I was a residential loan officer for just under 10 years where I used many of the market leading solutions we compete with, but also was an end user of the Mortgagebot product and the reason I can appreciate and respect my clients needs.
I am born and raised in Milwaukee Wi
and my wife and I are the proud parents of three incredible boys.