TheMReport

20 | TH E M R EP O RT COVER STORY "We need to be thoughtful about things that are hard to automate especially given the complexity of this business, which requires a lot of human awareness. It requires smart humans to deal with because when we think about people, we think about expertise." —Rick Bechtel, EVP, Head of U.S. Residential Lending, TD Bank "The traditional means of marketing have become incred- ibly inefficient, expensive, and at some point, they just don't satisfy anyone," Bechtel said. "What we're looking at is if we can start to be predictive about what consumers need next before they need it." By using AI, Bechtel said lenders could string together a mass of relevant data about their customers, either through internal existing data or through a view of external data such as the media borrowers consume. This would enable lenders to make offers when and as appropriate, and tar - geted to borrowers' specific needs. The result, Bechtel said, would be severely reduced marketing expenses. "The payoff for this is that mar- keting costs go down radically, es- pecially when you're hyper-focused on the customers' needs," he said. While the possibilities to save on marketing and operations are numerous, it all comes down to correctly managing the complicat- ed balance between modeling and implementing these systems. This, said Bechtel, is a journey that many lenders struggle to take. Starting the Journey O ne of the first lessons that lenders must understand while implementing AI is that the process of implementing this technology is a long-term objective. It's a plan that "you've got to commit to because none of this is going to happen quickly or easily," Bechtel said. He revealed that TD Bank had recently purchased an AI firm in Toronto that was helping educate the group about this technology. "A lot of the work that we're doing in the U.S. and around the world is happening locally," Bechtel said. Before lenders get too excited about the when and how of AI, it is important they ask why they should be implementing it in the first place. "As AI increasingly becomes a mainstream part of their business, lenders can get distracted," said Robert Bush , SVP and Senior Strategy Manager for Citizens Bank. Bush said that Citizens' ap- proach is to first understand the current and potential future busi- ness challenges, and from there, to determine if AI could be a solution to those headwinds. "The reason we're taking this approach is that, at the very least, it will ensure a lot of buy-in from the masses who have to help us execute on our strategy whether they sit within the business or help support it," Bush said. "It helps us to frame up the expecta - tions, the metrics we are trying to influence by implementing AI. We feel like this will help us get the momentum we need to solve future business challenges." Bush said that lenders should approach the implementation of AI the same way they would for any other business transformation. "Many companies have gone through various iterations and transformations. In fact, all of us are in different stages of digital transfor - mation across institutions," he said. "Focus on a business problem and launch off from there—take a more bottom-up approach." Building Partnerships A nother area that Bush said lenders must consider is the actual execution of a project, ensur- ing that decisions are made early on about whether they will tackle it internally or find a partner. "At Citizens, with AI being fairly new in financial services and with - out a lot of internal expertise in the area, we quickly realized we were going to need a partner to help us support this initiative and imple - ment it so that we would also get some more knowledge as we took things forward," Bush said. Piela agreed, stressing that it is imperative for lenders to find the right resources that have the necessary background in AI. "Those resources are not plenti - ful, as all that technology is still very new. So finding the right people to work with is impor- tant," Piela said. "Lenders must take a call on whether they want to build that core experience in- house or find partners." According to Bechtel, it was also important for lenders to form a tech roadmap to help them navigate the questions that come with imple - menting such technology. When thinking about technology partners, he said that lenders should look for partnerships that provide something that automates, speeds, and provides consistency to a process. Once that partnership is formed, they can ask what else they can do together. The Human Angle E very year that I've been in this business, there was something that made us think, 'We're five years away from being out of a job.' Here we are in 2019, and we're still not out of the job," Stubbs said. "Today's technology has changed the jobs we do, and it'll continue to do so as it simpli - fies the mortgage process." "The people in the industry will start playing the role of the expert as technology takes on the more mechanical areas of the mortgage process," Bechtel said. "We need to be thoughtful about things that are hard to automate, especially given the complexity of this business, which requires a lot of human awareness. It requires smart humans to deal with because, when we think about people, we think about expertise." While some areas of the indus- try remain more ripe for disrup- tion than others, Stubbs pointed out that, despite there being more technology in the industry over the past five years, customer satis - faction had decreased. "Part of that is because the technologies are still experimental, and they're choppy, so they're not always exactly right," he said. Stubbs suggested that the bor - rower's preference to engage with humans isn't going anywhere. Therefore, it makes sense to "let computers do what they do best and let people do what they do best." "The robots aren't coming for us," Bechtel said. RADHIK A OJHA is an independent writer and editor. A former Online Editor and currently a reporter for MReport, she is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her master's degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Houston, Texas.

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