December 4, 2024 • 33 mins
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EPISODE DESCRIPTION
In this episode, Bekim is joined by Chris Grimes. Chris is the Co-Founder & CEO of FundMore.ai, and has worked in the financial industry for 20 years. Gaining experience in wealth management, credit lending, and mortgage origination, he is passionate about advancing the mortgage industry through technology and forward-thinking initiatives. FundMore.ai is an automated underwriting system that uses machine learning to streamline the pre-funding process for loans. The mission? To make home-ownership more accessible.
Chris is here to discuss: → What Fundmore.ai is and the problem it's trying to solve, how Chris got to where he is today, and the legacy he wants to leave. → The industry working together for more accessible home ownership, what's frustrating about the current home-buying experience, and the dream of funding a mortgage in less than 24 hours and the challenges in executing that vision. → How AI will improve the future of mortgages, consumers' growing comfort with AI, and what's exciting about the industry's future.
Fundmore.ai Website: www.fundmore.ai
Fundmore.ai Instagram: @fundmore.ai
Fundmore.ai LinkedIn: @Fundmore.ai
Chris Grimes' LinkedIn: @ChrisGrimes
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Thank you for listening to thisepisode of the Lending Thoughts
(00:02):
Podcast, sponsored by RocketPro.
I'm your host, Bekim Merdita, and
today I'll be interviewing myfriend, Chris Grimes.
Chris is the CEO and founder ofFunmore.
We have a fantastic conversationranging from AI to how to close
loans in less than 24 hours to howeverybody in the industry needs to
work together to create a clientsolution that works for everybody
and allows more accessible homeownership to actually take place.
(00:25):
You're not going to want to missthis episode.
Have a listen.
Chris, thank you for joining me
today.
Yeah, nice to spend some time with
you as well in this certainenvironment.
Absolutely.
Good to chat with you.
We can chat often, but we get tobe on record here today, so this
(00:47):
is fun.
Chris, can you tell us your life
story in 60 seconds or less?I know some of the stories, so I
know it's super, super exciting.
I'm going to hear you try to
condense this a little bit.
Condense it in 60 seconds.
Well, grew up, lived in 10 citiesin the first 16 years of my life,
(01:10):
sort of followed, I guess, thenomadic life in some ways with my
dad moving across the country.
He was a weatherman.
And anyways, when you're in thegovernment, all roads lead to
Ottawa.
So eventually I ended up in
Ottawa.
From there, got into the financial
industry and spent some time inwealth management, spent some time
brokering, spent some time runningbrokerages.
Now I'm in technology.
There's a little bit of sort of
pivots in there with some funstuff in between, but that's where
I am.
I probably did that in under 30
seconds, but now I'm happilymarried for, I guess we're going
(01:32):
on 17 years.
Other than that, continue to just
try to have fun and find the nextopportunity.
Things have pivoted and changed inmy life, but interesting journey.
And before we jump into whatyou're doing today, what would you
say was the most interesting jobthat you had in the past?
Because if I recall, you've done alot of different things in your
(01:52):
history.
I have.
I've sort of been one of thosethings where a new opportunity
opens been one of those thingswhere a new opportunity opens up.
I was like, I'll go try that andsee what happens.
To be honest, I've done everythingfrom be a mail carrier to a
sommelier to professionalcoaching, soccer.
I ran a few other, this is myfourth business, I guess.
So I've been around and trieddifferent things.
And I'm probably one of thosepeople that, you know, even coming
(02:12):
out of high school and going intouniversity, it was one of those
things that was sort of a lastminute decision because I couldn't
figure out what I wanted to dowith my life.
And I think it's probably truetoday where I'm still not
convinced what I want to do, butkeep following the door that keeps
opening, having fun while I do it.
That's great.
How does one decide to become asommelier?
Like, is that something you get,you know, pulled into, you're at a
party and you see a sommelier andthey're doing a great job and
(02:32):
You're like, I want to do that.
Or do you get dragged in?
Like, what was that about?Halfway through university, I
despised the program I was in anddecided I would just step back and
quit and figure out what I wasgonna do with my life.
I was always passionate aboutcooking, enrolled in a cooking
program, and then went out andtalked to the industry, some chefs
and some friends that were in theindustry and realized what kind of
(02:54):
life that probably was going to beand quickly decided that wasn't
the right path and unrolled.
So there was always this sort of
passion about food, wine, thingslike this in the background.
And after one of the businesses Ihad took a terrible, terrible
pivot is the best way to describeit without getting into an
hour-long conversation about how abusiness can go bad.
Decided I needed to take a yearoff in life and decided to pursue
one of my passions.
(03:15):
And so I decided to study alcohol
and wine in particular.
Amazing.
I like my wine.
So I'll have to pick your brain on
that another day.
But tell us about what you're
doing now.
I know you're CEO and founder of
Funmore.
What does Funmore do?
What does that look like?What problem are you trying to
solve?If I go back to the original
mission statement, it was to makehome ownership more accessible.
(03:36):
That has taken a ton of pivots andchanges to get to where we are
today, which is a technologyplatform solutions for lending and
really trying to modernize thelending process for banks, credit
unions, private lenders throughAI-led technology, really with the
goal to, on the mortgage sidespecifically, how could you fund a
mortgage the same day?So when we thought about this
mission, which was how you madehomeownership more accessible and
went down the path of thinkingabout becoming a lender, starting
(04:00):
as a bit of a digital brokerage,and eventually realizing that
technology that lenders are usingtoday was so outdated that
something needs to be changed andimproved on the back end to be
able to support a betterexperience for the Canadian trying
to buy a home or trying torefinance their property.
And when we went through that sortof process back in 2018, 2019, and
(04:22):
understood there was a lot ofemphasis and money and energy
being put into the front-endexperience, the sales process, the
engagement process between either,you know, do the direct to
consumer channels, brokerchannels, and the consumer.
But a lot of that wasn't going tobe realized until the back offices
of these banks were sufficientlyimproved, to say it mildly.
Technology stacks that they'reusing are 25 years old.
(04:45):
And the major change managementconsideration for these financial
institutions to make these typesof changes, so it's not something
that they can easily rip out andreplace, which is why they're
sold,pled with the fact therewasn't a lot of innovation going
on in the space, particularly inCanada.
And so when we had theseconversations with lenders, there
(05:05):
clearly became a need.
And we started working with
companies like yours and trying tofigure out what would the
solutions be to provide a betterexperience in the back office so
that brokers eventually and morespecialists and branches and
everyone experience in the backoffice so that brokers eventually
and mortgage specialists andbranches and everyone else in the
ecosystem could actually deliver abetter experience for their
(05:27):
customer or the Canadian trying tobuy a home.
That's a pretty grand mission.
Try to close mortgages in a day.
I don't think we're there yet.
Right.
I think that we'd call that anaspirational goal as of right now.
Is there still a vision?You said that was the original
vision, the core products, onceyou sort of figured it out and got
past the initial idea ofhomeownership accessibility.
But do you think there's still afuture in which we can imagine
(05:47):
homes, you know, closing in a day,full mortgage, signing with a
lawyer, like the whole bit?Because we've talked about it in
the past.
And it's one of the things that I
riff on quite a bit.
It's like, it's one thing to say
that you're going to do a greatjob, but you actually need a lot
of different people and a lot ofdifferent companies inside of a
(06:07):
value chain to all deliver.
So how do you think about that as
it pertains to, you know, reallybeing able to bring it all
together to make that happen inone day?
And how far are we from that?Yeah, I think it's a great
question slash statement there.
The realities were not there yet,
but I don't actually think we'rethat far away.
Every year on this journey, Ithink we're getting a little bit
(06:28):
closer.
It's still the sticker on the
wall, if you will, to sort ofquote the Elon Musk of the world,
where you kind of put some NorthStar on there and try to target
it.
But you're right.
It takes an ecosystem.
There is no single partner in this
industry that was going to be ableto execute on this.
And that became very clear andapparent from day one.
And we've gone out and spoke to alot of the critical components,
particularly in the back officeside of it.
(06:49):
I think there's some more workthat needs to be done between the
back office and the frontcomponents as well.
And further downstream.
I think when we look at it, there
was four big challenges to executethis vision.
Number one, so you collect amortgage application that goes
into a back office and there's amassive disconnect.
Today, it takes four or five hoursfor an underwriter to restructure
a deal so they can actuallyadjudicate it.
The adjudication of a loan,frankly, with technology today,
AI, even some of the early days ofAI, if you go back 15, 20 years,
(07:11):
probably could make a decision on80% of loans today.
But structuring it in a way thatit can actually do that is where
all the pain comes in.
So there's a big problem there.
The information isn't structuredfor lenders to actually
adjudicate.
There can be a myriad of reasons.
It could be information'sincorrect.
It could be the income doesn't addup.
It could be typos or whatever elseyou want to come up with as to why
(07:36):
that information is not 100%accurate.
I think part of it is alsoexposure and transparency of
what's actually happening on thelender side.
And for good reason, can't exposeall the lending policies because
you'd create more fraud than therealready exists in this market.
So you have to be controlled abouthow that information is exchanged.
And I think this is a great use oftechnology where it can do a lot
of the work without having toactually expose the potential
(07:57):
challenges.
And you can avoid the risk of
challenges in that first phase,but that's something that needs to
be improved, how these front-endsystems and people talk to the
back-end systems and people sothat you can expedite that process
to adjudicate it when theapplication comes in.
The second big blocker is reallyaround the due diligence, actually
following up on what's been saidin the commitment letter.
And so today, as you know,information comes in, the data is
(08:20):
being collected somewhere,typically on documents, sometimes
direct from source.
And there's a chain of custody of
that information.
It doesn't always transition to
the back office properly.
So even if you're using things
like the flinks and other systemslike that in market to collect
bank data, as an example, thatinformation is now recollected and
started over, it typically startsover in the back office.
So there's some work there thatneeds to be done throughout that
value chain to be able to ensurethe custody of that data across
(08:41):
that chain so everyone can acceptit.
You know, I think access to CRAdata or information for validation
will help improve this as well,these different checks and
balances.
But then even looking at Canadians
as a whole, and today, we're notsuper trusting of all of these
technologies.
And so the uptick rate of using a
flanks isn't very high.
(09:01):
You still need to count on the
physical documents that are beingshared.
And so having the ability toextract that data and then
cross-reference and validate it.
And this is a great use of AI
today where it can actually dothat on a lender's behalf.
So that's a big challenge thatwe're actually working at solving
ourselves.
And then you get into some more of
the back office challenges andrestructuring and reworking of
(09:23):
deals.
And up till today, we get to a
point where the deal needs to bere-adjudicated and slows the
entire process down.
And sometimes that's because new
information is brought in at thelast minute.
Sometimes it's simply that thedeal just wasn't structured for an
investor on the back end properly,or there was something that came
up in the title search or whateverhappens later on in the process.
(09:45):
But these are all things that canbe fixed with the right partners
at the table and bringing in theright checks and balances at the
right time.
Like I kind of use this example.
There are situations in theworkflow that perhaps if we check
title on day one, and the reasonwhy we don't do it is because the
cost is too high to do it butlet's assume we can get to a point
where we're 80 90 confidence onday one as soon as the application
(10:07):
comes in this deal will likelyfund so in the case where okay can
i validate the title at that pointand then can i insure through that
entire journey past thatadjudication that that same check
can be used in the entire flowfrom the lender to the title
insurer to the lawyer so that itdoesn't have to be pulled a second
time, which slows the process downand then obviously adds cost.
But it's an example of somethingthat could happen earlier in the
(10:30):
journey that typically isn't.
It's normally at the very last
day.
And if there's something that
comes up, it's going to start thewhole process over.
So it's an example of something Ithink can be worked through with
some of our title partners inindustry and lenders as they
rethink how they would approach aproduct.
The last thing I'm going to say inthis is that the closing
experience today is improving, butit's not where it needs to be.
And so that's something else whereI know there's job once and not
(10:51):
three times, which is, again,something that seems to happen in
reviewing the documents and havingto draw them up manually and
things like this where it slowsthe process down.
where it slows the process down.
And so if you think about that, I
kind of see fund more in this as amore of an orchestration between
all these different partners andtools in this industry, but we're
not going to solve the whole thingon our own.
(11:12):
But like I said, I think thetechnology is now capable of doing
it.
It's just getting everyone else up
to speed so we can actuallyexecute that vision.
Now, I guess the bigger questionback to you is as a lender, do you
actually need to fund a mortgageon the same day?
And so that's the question thatI'm always sort of pondering and
curious is if we actually executedon it, would anyone actually use
it?I might not give you the same
answer that everybody else use it?I might not give you the same
(11:35):
answer that everybody else would.
But for me, faster is always
better.
Because I think ultimately, the
consumer is seeking certainty.
And the faster you can provide
that level of certainty, and thisisn't a base assumption here of
(11:57):
mine.
This is data.
We've asked our clients, what dothey want above all else?
And the answer that we get back inevery survey is certainty.
And the way that we deliver thatcertainty is through speed.
For me, that's exactly what Iwant.
We reference it often, but itreally is a miracle of technology
when you think about companieslike Uber, when you think about
the Airbnbs of the world, what arethey really giving us?
As somebody who just booked ahotel room, actually yesterday,
planning an upcoming trip, there'sstill a lot of unknowns when you
(12:21):
go to hit that final pay buttonand you're really wondering, okay,
I know I've seen a couple ofphotos of this hotel, but I know
you're dressing it up for me alittle bit.
I know that you're only providingthe best photos.
So then I've got to go look at theuser photos on Google and other
places.
Like I have to do all these other
things to like validate, but likeif I truly trusted the information
and I truly trusted the providerand I've had great experiences in
the past, and I know that so manyother people around me are having
(12:43):
this great experience.
I just want you to deliver
certainty to me.
And I want you to deliver it very,
very fast.
So I think that for us, it's so
important to try to just deliverfor our clients in a way that
they've never seen done before.
And I do believe that there is a
future world in which that couldbe real.
We're like, why does it take timefor all the reasons that you just
mentioned?A lot of it is just reworking of
(13:05):
information.
You mentioned one thing that
doesn't cost anything but getsre-verified usually three to four
times throughout the process isidentification.
The broker collects the ID, thelender then confirms and collects
the ID, and then the closingservice and or attorney, whoever
is providing the legal documentssuch at closing, they then do a
recheck of the ID.
I get it from a fraud perspective.
Why are we doing that?Again, it's chain of command.
It's fraud mitigation, it's allthose things.
(13:26):
But there are much better waysbiometrically and otherwise to
verify identification and makesure that someone's name is what
they're telling you it is andmatches the ID and matches the
credit report and matches allthose other things.
That technology is not 100 yearsaway.
It exists today.
We just haven't found a way to
bring it all together into thesame platform, which leads me to
my next question on that, which isif I'm thinking about Funmore,
obviously, I'm very intimatelyfamiliar because we are a client
(13:47):
of Funmore.
We were one of the first clients
of Funmore in many ways served asa consultant to helping build the
product that exists today to helpbe suitable for our business.
And we'll continue doing so tomake that product great.
But how should I think aboutFunmore if I'm unfamiliar?
Maybe I'm a brand new mortgageagent and I'm hearing, hey,
Funmore technology, what is itexactly if I've never really done
a mortgage before in my life andwho does it serve?
(14:10):
Yeah.
So thanks for sort of setting me
up to pitch fun more a little bitthere.
But if you've never heard of us oryou're brand new to the industry
or you needed to think about howwe actually support the ecosystem.
So a mortgage application iscreated.
You've written up your first dealand you submit it.
The action of submission thencomes to a back office of a
(14:32):
lender.
And that is where we sit.
So the minute the application iscreated, it then flows into a
workflow automation tool that wehave in market.
Just so I can jump in there.
When I think about the
application, like you're talkingabout Finmo or Velocity or
Phylogix or Boss or, you know, anyother.
Correct.
The agents working in that as
their application flow.
And then when they hit the submit
(14:54):
button from their application flowwith a full application, it's
entering Funmore.
Is that correct?
Correct.
Okay.
So they choose Rocket Pro on theirsystem.
It then goes into Rocket's lenderside of their business and their
underwriters will begin working onour platform too.
So that's a great example of wherewe would start the flow.
So our system has been designed towork with underwriters,
fulfillment specialists.
So these are people that would
(15:14):
actually evaluate documents toreview the document process.
We have some tools to automatethat now.
We have some tools going down thatchain again, the mortgage journey,
if you will, to get to funding.
After you go through the decision,
it then goes through a commitmentgeneration phase, and then it goes
into a fulfillment phase.
During that fulfillment phase,
there's a pre-fund and fundingprocess.
We have tools in market today thatautomate that.
(15:35):
So one of the things that mostlenders will do, and it's also
where some of these challengessometimes arise, is they do a
pre-funding check.
An example of an ID, well, was the
ID even part of this package?If it was, why does the name have
an S at the end and the mortgagedocuments don't?
So the things that get caught sothat when they move into the
funding process, it can go alittle bit faster.
(15:56):
And so that's a tool that we haveto validate all the lending
policies, potentially the insurerpolicies.
So this is the CMHC mortgagecounty guarantee or Sage and
mortgage insurers.
So it can run their policies as
well and make sure that all thosechecks have been done correctly
and moves into the fundingprocess.
That's typically where we sittoday.
(16:17):
We also are moving into theservicing side of it.
So we have a servicing platformthat's maybe two-thirds of the way
built and part of it's already inmarket with one of our lending
customers.
And so this is sort of
post-funding.
So after the application has been
funded, lenders are working withyour customers to ensure good
process.
Post-funding, this is things like
(16:38):
collecting payments, managing theloan, often upselling new
opportunities to these customersin this earning and process, and
then eventually discharging.
So all that technology is there as
well.
It's a lot It's a lot there.
So you're thinking about Fundmoretoday in the context of being the
solution for all like theunderwriting to pre-fund and then
connecting the other parts of it.
(16:58):
So it's kind of like that middle
point really where the magichappens for the lender themselves.
Correct?That's the way we view ourselves
today.
Like I said, it's sort of this
orchestration component.
If you think about the three or
four phases of a mortgage journey,you make the decision to buy your
home, you meet with your mortgageagent broker, you buy your home,
that's sort of phase one and two.
You then get into the lending side
(17:19):
of it.
They're making their decision.
That's where we sit today.
And then they fund the mortgage.
It goes into a servicing platformor core banking system or
something like that.
Sort of the last phase of that
journey.
And today we're sitting in that
middle phase with a little bit ofthe last phase as well.
Awesome.
So right now, I mean, very
code-based driven, you know, Iknow there's a lot that had to get
(17:41):
built out to get there, but Imean, it's right in your name,
right?Fundmore.ai.
How do you think about AI playinga position in the lending space?
or automated underwriting or frauddetection, all the way down to
picking the loan product, whichone would think might be simple,
but not as easy as people think.
Often the wrong loan product is
chosen either at the broker levelor the lender level, even like
(18:02):
matching it to rate.
One of the things that our teams
have been working toward is like,just how do you pick the right
rate, the right investor?Like how does AI, some internal
decisioning improve the experienceoverall in the future?
I think there's two worlds of AI.
And I think there's the, we'll
call it five to 10 year version ofAI.
(18:24):
And then the one that's availabletoday.
I think in five to 10 years, itprobably gets to a yes, no. And I
say that because I think thecapability of what we're seeing
today and some of the technologythat's being built around, like
you said, the pricing engines, howit makes more complex decisions
very fast.
So if it can look at all these
different data points from theapplication to the documents to
the lending policies themselves,the product guidelines that are
(18:45):
all associated with this andunderwrite a deal, to be honest
with you, it's available today.
But I think for a lender to be
fully comfortable with that sortof context driven decision, we're
probably five years to 10 yearsaway.
And then you have people that arehyper enabled to just say yes, no,
yes, no, yes, no, to validate it.
And you're doing that more from a
risk compliance standpoint thananything else.
I think where we are today, it'san exceptional augmentation or
(19:07):
enablement tool for those that arelooking to adopt it.
And I think there's some key areaswhere you're going to start seeing
benefits.
One, I've talked about a couple of
times here, but it's around thedocument review phase, its ability
to take unstructured andstructured documents and really
understand what's in there.
So that's one.
(19:27):
And then you can get to avalidation and acceptance much
quicker.
And if there's challenges within
it, that can be exposed muchfaster.
So if you're an underwriterworking on a file and within
seconds, it's telling you, look,the income's not adding up.
And here's why.
And I think the here's why is the
important thing.
It's not just, you know, there's a
bunch of bank statements and it'sgiving you some numbers, but
(19:48):
actually giving you some context.
And here's why is because it's
actually reading the lender'spolicies and procedures.
And it's saying, look, based onour policies, we can't actually
accept this type of income forthis type of product.
And so to your point about, youknow, having it make a better
product selection, well, it canalso make a product selection
quicker or make can also make aproduct selection quicker or make
(20:09):
the adjustment to the productselection.
So when the underwriters arerunning scenarios and trying to
find a way to make the deal work,it's enhancing and enabling a much
quicker experience.
That's a use case on the backend
for lenders that they're going tosee some value over the next
couple of years as it becomes moreand more available.
And then I think there's two otherreally great use cases for AI.
(20:32):
And I think first one is I'll goto the servicing side of the
experience right now.
And you can think about any one of
you have a mortgage, you probablylog into your TD, RBC, Rocket
Mortgage app, Rocket Mortgage app.
And you're going to go through
that experience and ask, I need tomake a payment change.
I need to increase my payment.
I want to pay my mortgage early.
(20:53):
And typically now there's awaiting process.
Like I gave an example, we justmade a payment on our Scotiabank
mortgage.
My wife seems to do this like
every quarter.
She likes to pay something off.
We go and say, let's initiate apayment.
And it takes seven or 10 days forsomething to actually happen.
My assumption is someone'sapproving it on the back end and
then eventually someone triggersthat action to pull the money out
(21:16):
of our account and put the lumpsum payment on it.
When I think about that experiencethough, it's ridiculous.
It shouldn't be able to make apayment the same day.
Part of that is payment railtechnology improving.
Part of it's just how I engagewith it though.
Now, when I first go in, I'm notreally familiar if it's my first
time wanting to do this and tryingto understand this.
If that whole process is nowthrough a co-pilot or GPT type
(21:36):
experience where I'm just askingit questions and it's giving me
feedback and giving me the actionsthat I need and confirming it,
that experience for me is a lotbetter.
And this can be done throughvoice.
It can be done through texting.
It can be done through an
interactive app.
That's a use case that's also
available today.
And you're starting to see it pop
up more and more in financialinstitutions.
And I think you're going to seethat trend continue over the next
(21:57):
couple of years, where Orwells aregoing to have better experience
communicating with these agents atthese banks.
These agents being these GPT typeagents.
type agents.
Yeah, an AI bot.
How much of that iscomfortability, do you think?
Because I'm thinking back likejust a few years ago and maybe
even up until recently, peoplewere skeptical.
And I think, you know, the averageconsumer, like technology
companies are often trying totrick consumers into not
(22:18):
recognizing the fact that theywere talking to an AI bot.
But now it seems that people areactually more comfortable.
And I think that'll even grow overtime, that people are going to get
more comfortable knowing thatthey're talking to an AI bot.
But I think it's all their problemin three minutes, as opposed to
waiting seven to 10 days for abunch of humans to press a bunch
(22:38):
of buttons on the back end.
Like, why would they want to wait?
Is the way that I think aboutthat.
Are you seeing that too?Because like you some said, of
these things exist to wait is theway that I think about that.
are Like, you seeing that too?Because like you like said, some
of these things exist.
It's about implementation.
It's about comfort.
Like, are we approaching that
level of comfort yet?Or do we still have a ways to go
to?I think the demographic shift as
(22:59):
millennials are becoming a largerpopulation base shift as
millennials are becoming a largerpopulation base who grew up on
mobile devices, I think is goingto be the triggering factor that
those that haven't fully adoptedor become comfortable with it
That's an inevitability I think isgoing to be the triggering factor
will.
that those that haven't fully
adopted or become comfortable withit will.
That's an inevitability I thinkwe're all facing.
But I also think the way it's ableto adjust to you in any mood that
(23:21):
you may have on that particularday, engaging with your financial
institution, as an example, isalso a big win for you as a
consumer or the financialinstitution behind it that you
know if something went wrong andyou're irate and you're able to
talk to something that you know isactually able to empathize with
you very quickly and change itstone whether that again be over
phone and it's a voice or whetherit's you're texting or messaging
(23:43):
something a bot is an incredibleuse of ai today and i think it
helps improve that customerexperience which ultimately will
make this become more and morecomfortable for the average
canadian looking to incredible useof AI And I think it helps improve
today.
that customer which ultimately
experience, will make this becomemore and more comfortable for the
average Canadian looking to dosomething or change or make an
(24:04):
update on their situation.
I also think there's a world where
you actually don't have to makethat call.
And I think this goes back to myfive or 10 year vision.
This was the last point I wasgoing to make.
I actually think the averageperson will have an agent that's
going to live in their iPhonewallet or Android wallet.
And that will be the data thatneeds to share with financial
institutions.
And the banks will have their own
agents.
And these two systems will just
talk in the background.
And it's going to give you the
(24:24):
opportunity to simply say, do youwant your mortgage renewed?
Or do you have an update coming upthat you want to make a payment?
It looks like based on yourfinancial situation, you'd be
probably best suited to make alump sum payment today.
You accept it and it's just done.
That's probably the 10-year path
where you have all the servicingcomponents of your financial life
will be solved by an agentrepresenting you and an agent
representing your financialinstitutions.
That is a very bold and excitingvision as I think about it.
(24:44):
So to summarize back to you in away, picture an app on your phone.
That app is your finance app,right?
The way that we may think about amint or a credit karma or borrow
well or something like that.
And instead of being somewhere I
can just go look at all myfinances, it's actually a place
where I can command my finances ordictate what my finances are going
to look like.
So I would just go in there and
I'd be able to type text or voiceto text, please raise my payment
on my mortgage up to the 2020limit that I can and make one
(25:08):
extra payment a year within theallowable timeframe and can take
that as instruction, communicateas an AI agent to the AI agent at
the financial institution and makethose things happen for me.
That is very cool.
10 years would be incredible.
It might be a little longer, butthat to me is the future future of
finance.
Yeah.
The only caveat I would put inthere is that I think it will also
make predictions for you.
So it's not you just having to
command it.
It's actually making the
recommendation to you saying,look, I think it's in your best
(25:29):
interest to do this.
And then you making that decision,
I think it's important you controlthe decision, but I think it'll be
in a position where it has thatcapability.
Yes.
You should refinance.
You should renew your mortgageearly.
You should stop this automaticpayment for some subscription
service that you no longer useanymore to save money.
I couldn't agree more.
And I, for one, am very excited
about a future in which thathappens.
I want to remove many of thoseinconveniences from my life.
(25:49):
And as I think about thegenerations coming behind us,
Chris, they demand convenience inall aspects of their life.
They don't want to deal with anyof these things when I think about
the demographics, becauseeverything has always been right
here.
They've never had to go to a
library and go through a cardcatalog to find the book that they
want.
They just type in the name of the
book and they hit order in asingle click.
(26:11):
And the book either arrives totheir front door or you know
downloads right to theirapplication and even the fact that
that might take you know 10seconds of load time is an
annoyance to the generation comingbehind us so that is i believe
where we're going now the questionthen becomes like does that excite
you and i guess to the follow-upto that so call it a two parter,
(26:34):
if you will.
What would frustrate you today
about the current experience?And then again, building off the
back of that, like what excitesyou about that future experience?
Yeah, I mean, I'm still frustratedthat we've been driving this
mission for five years.
And banks have been on this
journey of digital transformationfor, it seems like as long as I
can remember, it seems to be thebuzzword.
I think you go back and they hadbuzzwords all the way back to the
(26:57):
fifties of automation.
You know, and we're still sitting
here in 2020s and automation isstill a word in their digital
transformation journeys andprojects.
It's slow moving with financialinstitutions and if I could wave a
magic wand I would find a waywhether it's us or someone else
that's trying to do some similarthings in market that we just jump
(27:18):
forward and wave a magic wand andsupport this digital
transformation so that we canexecute on this mission that I
have that you know how do you makeit easier for everyone so that
more people can buy homes?It's really simple.
But until there's a way to speedup the digital transformation,
that's my frustration.
I think there is a lot of cool and
exciting technology and innovationhappening around the space, but
not getting full adoption from thefull ecosystem as fast as I'd like
(27:40):
it, you know, makes it difficultto execute on the timeline that I
would like to execute it on.
And then, you know, as part of
that, again, like you're obviouslydoing some pretty cool stuff.
I see a lot of new players poppingup.
I actually don't think theinnovation will come from inside
of the big legacy institutions.
I think the upstarts are going to
be the one to bring that.
(28:02):
And I think others will eventually
be forced to adopt that if theycan't figure it out themselves.
So what excites you as you lookforward then?
I think I think that, you know,the nice thing about the real
estate market in whole is thatit's a gift that keeps on giving
and that sky's sort of the limitfor opportunity around innovation.
That there are so many brokenprocesses within that entire
experience from the minute someonedecides to buy a home until you
(28:22):
securitize it and sell it on intoa secondary market and all these
things that happen well down thestream of funding.
There's continuous places forcompanies like mine to go and
yours, frankly, to go and findways of improving and getting to
an overall better experience.
And that, you know, it's exciting
that there are improvements comingand that there are improvements
here today, but also that there'sstill lots of things to go and
(28:44):
fix.
And, you know, maybe it doesn't
entirely answer your question, butit's sort of how I see it that you
can keep coming up with crazyideas and figuring out, is there
an opportunity and someone willingto work with you to go execute it?
Yeah, totally get that.
So then I feel like I know this
answer in advance just based onour conversation, but I still have
(29:06):
to ask it because maybe it's evengrander.
What do you want your legacy tobe?
What do you want your impact to beon the industry and life?
That's a big question.
I think at the end of all of this,
you know, two parts, if I can helpchange the way mortgages are
processed, when we sort of hang itup, it'll be a win.
If I'm sitting here in howevermany more years and very little
(29:29):
has changed, that will not besuccessful.
Even if we move the needle alittle bit, I don't think it's
enough.
You know, I really want to end
this journey with saying weactually made an impact on how
mortgages are processed and, youknow, supporting the Canadian
getting a home.
And it's probably a big statement,
but that's really why I'm tryingto do what we're trying to do from
a different perspective, just onlife in general.
(29:51):
And I don't know, I think it's toobig of a statement to kind of
reflect too much on it.
But once this is done, I'll go
find something else.
Like where's the next door that
will open and figure out where I'mgoing to go next.
Last night, I had the privilege ofsitting next to someone.
(30:12):
He was telling me his life journeyand it was quite interesting.
He's about our age.
And you know, he started off as a
working in a restaurant and then,you know, decided that was done.
And then he went in and ended upstarting a technology company,
exited that, became a CEO of someother company, and now he's a
pilot.
It's just bouncing all over the
place, right?And figuring out where your life
takes you and having opportunitiesto, or being willing to open the
(30:33):
door and figure out what's next.
But it's probably a long-winded
answer.
I think it's fantastic.
It's about riding the wave andgoing where your heart takes you.
And I've always respected andappreciated you for that.
You know, when you get yourmindset to something something
like, I'm going to go do that.
And then you seemingly will go and
(30:54):
attack it and you attack it withall the energy that you have.
And I think that's the importantthing is, you know, knowing where
to apply that energy and thenultimately actually applying your
full self to that thing.
And you can build a lot of great
things that way.
So appreciate you, appreciate your
partnership and thanks for beingon the Lending Thoughts podcast
today.
Yeah, again, appreciate you having
me on and looking forward to doingsome cool things with you guys in
(31:17):
the next couple of years here.
Thank you for listening to thisepisode of the Lending Thoughts
(00:02):
Podcast, sponsored by RocketPro.
I'm your host, Bekim Merdita, and
today I'll be interviewing myfriend, Chris Grimes.
Chris is the CEO and founder ofFunmore.
We have a fantastic conversationranging from AI to how to close
loans in less than 24 hours to howeverybody in the industry needs to
work together to create a clientsolution that works for everybody
and allows more accessible homeownership to actually take place.
(00:25):
You're not going to want to missthis episode.
Have a listen.
Chris, thank you for joining me
today.
Yeah, nice to spend some time with
you as well in this certainenvironment.
Absolutely.
Good to chat with you.
We can chat often, but we get tobe on record here today, so this
(00:47):
is fun.
Chris, can you tell us your life
story in 60 seconds or less?I know some of the stories, so I
know it's super, super exciting.
I'm going to hear you try to
condense this a little bit.
Condense it in 60 seconds.
Well, grew up, lived in 10 citiesin the first 16 years of my life,
(01:10):
sort of followed, I guess, thenomadic life in some ways with my
dad moving across the country.
He was a weatherman.
And anyways, when you're in thegovernment, all roads lead to
Ottawa.
So eventually I ended up in
Ottawa.
From there, got into the financial
industry and spent some time inwealth management, spent some time
brokering, spent some time runningbrokerages.
Now I'm in technology.
There's a little bit of sort of
pivots in there with some funstuff in between, but that's where
I am.
I probably did that in under 30
seconds, but now I'm happilymarried for, I guess we're going
(01:32):
on 17 years.
Other than that, continue to just
try to have fun and find the nextopportunity.
Things have pivoted and changed inmy life, but interesting journey.
And before we jump into whatyou're doing today, what would you
say was the most interesting jobthat you had in the past?
Because if I recall, you've done alot of different things in your
(01:52):
history.
I have.
I've sort of been one of thosethings where a new opportunity
opens been one of those thingswhere a new opportunity opens up.
I was like, I'll go try that andsee what happens.
To be honest, I've done everythingfrom be a mail carrier to a
sommelier to professionalcoaching, soccer.
I ran a few other, this is myfourth business, I guess.
So I've been around and trieddifferent things.
And I'm probably one of thosepeople that, you know, even coming
(02:12):
out of high school and going intouniversity, it was one of those
things that was sort of a lastminute decision because I couldn't
figure out what I wanted to dowith my life.
And I think it's probably truetoday where I'm still not
convinced what I want to do, butkeep following the door that keeps
opening, having fun while I do it.
That's great.
How does one decide to become asommelier?
Like, is that something you get,you know, pulled into, you're at a
party and you see a sommelier andthey're doing a great job and
(02:32):
You're like, I want to do that.
Or do you get dragged in?
Like, what was that about?Halfway through university, I
despised the program I was in anddecided I would just step back and
quit and figure out what I wasgonna do with my life.
I was always passionate aboutcooking, enrolled in a cooking
program, and then went out andtalked to the industry, some chefs
and some friends that were in theindustry and realized what kind of
(02:54):
life that probably was going to beand quickly decided that wasn't
the right path and unrolled.
So there was always this sort of
passion about food, wine, thingslike this in the background.
And after one of the businesses Ihad took a terrible, terrible
pivot is the best way to describeit without getting into an
hour-long conversation about how abusiness can go bad.
Decided I needed to take a yearoff in life and decided to pursue
one of my passions.
(03:15):
And so I decided to study alcohol
and wine in particular.
Amazing.
I like my wine.
So I'll have to pick your brain on
that another day.
But tell us about what you're
doing now.
I know you're CEO and founder of
Funmore.
What does Funmore do?
What does that look like?What problem are you trying to
solve?If I go back to the original
mission statement, it was to makehome ownership more accessible.
(03:36):
That has taken a ton of pivots andchanges to get to where we are
today, which is a technologyplatform solutions for lending and
really trying to modernize thelending process for banks, credit
unions, private lenders throughAI-led technology, really with the
goal to, on the mortgage sidespecifically, how could you fund a
mortgage the same day?So when we thought about this
mission, which was how you madehomeownership more accessible and
went down the path of thinkingabout becoming a lender, starting
(04:00):
as a bit of a digital brokerage,and eventually realizing that
technology that lenders are usingtoday was so outdated that
something needs to be changed andimproved on the back end to be
able to support a betterexperience for the Canadian trying
to buy a home or trying torefinance their property.
And when we went through that sortof process back in 2018, 2019, and
(04:22):
understood there was a lot ofemphasis and money and energy
being put into the front-endexperience, the sales process, the
engagement process between either,you know, do the direct to
consumer channels, brokerchannels, and the consumer.
But a lot of that wasn't going tobe realized until the back offices
of these banks were sufficientlyimproved, to say it mildly.
Technology stacks that they'reusing are 25 years old.
(04:45):
And the major change managementconsideration for these financial
institutions to make these typesof changes, so it's not something
that they can easily rip out andreplace, which is why they're
sold,pled with the fact therewasn't a lot of innovation going
on in the space, particularly inCanada.
And so when we had theseconversations with lenders, there
(05:05):
clearly became a need.
And we started working with
companies like yours and trying tofigure out what would the
solutions be to provide a betterexperience in the back office so
that brokers eventually and morespecialists and branches and
everyone experience in the backoffice so that brokers eventually
and mortgage specialists andbranches and everyone else in the
ecosystem could actually deliver abetter experience for their
(05:27):
customer or the Canadian trying tobuy a home.
That's a pretty grand mission.
Try to close mortgages in a day.
I don't think we're there yet.
Right.
I think that we'd call that anaspirational goal as of right now.
Is there still a vision?You said that was the original
vision, the core products, onceyou sort of figured it out and got
past the initial idea ofhomeownership accessibility.
But do you think there's still afuture in which we can imagine
(05:47):
homes, you know, closing in a day,full mortgage, signing with a
lawyer, like the whole bit?Because we've talked about it in
the past.
And it's one of the things that I
riff on quite a bit.
It's like, it's one thing to say
that you're going to do a greatjob, but you actually need a lot
of different people and a lot ofdifferent companies inside of a
(06:07):
value chain to all deliver.
So how do you think about that as
it pertains to, you know, reallybeing able to bring it all
together to make that happen inone day?
And how far are we from that?Yeah, I think it's a great
question slash statement there.
The realities were not there yet,
but I don't actually think we'rethat far away.
Every year on this journey, Ithink we're getting a little bit
(06:28):
closer.
It's still the sticker on the
wall, if you will, to sort ofquote the Elon Musk of the world,
where you kind of put some NorthStar on there and try to target
it.
But you're right.
It takes an ecosystem.
There is no single partner in this
industry that was going to be ableto execute on this.
And that became very clear andapparent from day one.
And we've gone out and spoke to alot of the critical components,
particularly in the back officeside of it.
(06:49):
I think there's some more workthat needs to be done between the
back office and the frontcomponents as well.
And further downstream.
I think when we look at it, there
was four big challenges to executethis vision.
Number one, so you collect amortgage application that goes
into a back office and there's amassive disconnect.
Today, it takes four or five hoursfor an underwriter to restructure
a deal so they can actuallyadjudicate it.
The adjudication of a loan,frankly, with technology today,
AI, even some of the early days ofAI, if you go back 15, 20 years,
(07:11):
probably could make a decision on80% of loans today.
But structuring it in a way thatit can actually do that is where
all the pain comes in.
So there's a big problem there.
The information isn't structuredfor lenders to actually
adjudicate.
There can be a myriad of reasons.
It could be information'sincorrect.
It could be the income doesn't addup.
It could be typos or whatever elseyou want to come up with as to why
(07:36):
that information is not 100%accurate.
I think part of it is alsoexposure and transparency of
what's actually happening on thelender side.
And for good reason, can't exposeall the lending policies because
you'd create more fraud than therealready exists in this market.
So you have to be controlled abouthow that information is exchanged.
And I think this is a great use oftechnology where it can do a lot
of the work without having toactually expose the potential
(07:57):
challenges.
And you can avoid the risk of
challenges in that first phase,but that's something that needs to
be improved, how these front-endsystems and people talk to the
back-end systems and people sothat you can expedite that process
to adjudicate it when theapplication comes in.
The second big blocker is reallyaround the due diligence, actually
following up on what's been saidin the commitment letter.
And so today, as you know,information comes in, the data is
(08:20):
being collected somewhere,typically on documents, sometimes
direct from source.
And there's a chain of custody of
that information.
It doesn't always transition to
the back office properly.
So even if you're using things
like the flinks and other systemslike that in market to collect
bank data, as an example, thatinformation is now recollected and
started over, it typically startsover in the back office.
So there's some work there thatneeds to be done throughout that
value chain to be able to ensurethe custody of that data across
(08:41):
that chain so everyone can acceptit.
You know, I think access to CRAdata or information for validation
will help improve this as well,these different checks and
balances.
But then even looking at Canadians
as a whole, and today, we're notsuper trusting of all of these
technologies.
And so the uptick rate of using a
flanks isn't very high.
(09:01):
You still need to count on the
physical documents that are beingshared.
And so having the ability toextract that data and then
cross-reference and validate it.
And this is a great use of AI
today where it can actually dothat on a lender's behalf.
So that's a big challenge thatwe're actually working at solving
ourselves.
And then you get into some more of
the back office challenges andrestructuring and reworking of
(09:23):
deals.
And up till today, we get to a
point where the deal needs to bere-adjudicated and slows the
entire process down.
And sometimes that's because new
information is brought in at thelast minute.
Sometimes it's simply that thedeal just wasn't structured for an
investor on the back end properly,or there was something that came
up in the title search or whateverhappens later on in the process.
(09:45):
But these are all things that canbe fixed with the right partners
at the table and bringing in theright checks and balances at the
right time.
Like I kind of use this example.
There are situations in theworkflow that perhaps if we check
title on day one, and the reasonwhy we don't do it is because the
cost is too high to do it butlet's assume we can get to a point
where we're 80 90 confidence onday one as soon as the application
(10:07):
comes in this deal will likelyfund so in the case where okay can
i validate the title at that pointand then can i insure through that
entire journey past thatadjudication that that same check
can be used in the entire flowfrom the lender to the title
insurer to the lawyer so that itdoesn't have to be pulled a second
time, which slows the process downand then obviously adds cost.
But it's an example of somethingthat could happen earlier in the
(10:30):
journey that typically isn't.
It's normally at the very last
day.
And if there's something that
comes up, it's going to start thewhole process over.
So it's an example of something Ithink can be worked through with
some of our title partners inindustry and lenders as they
rethink how they would approach aproduct.
The last thing I'm going to say inthis is that the closing
experience today is improving, butit's not where it needs to be.
And so that's something else whereI know there's job once and not
(10:51):
three times, which is, again,something that seems to happen in
reviewing the documents and havingto draw them up manually and
things like this where it slowsthe process down.
where it slows the process down.
And so if you think about that, I
kind of see fund more in this as amore of an orchestration between
all these different partners andtools in this industry, but we're
not going to solve the whole thingon our own.
(11:12):
But like I said, I think thetechnology is now capable of doing
it.
It's just getting everyone else up
to speed so we can actuallyexecute that vision.
Now, I guess the bigger questionback to you is as a lender, do you
actually need to fund a mortgageon the same day?
And so that's the question thatI'm always sort of pondering and
curious is if we actually executedon it, would anyone actually use
it?I might not give you the same
answer that everybody else use it?I might not give you the same
(11:35):
answer that everybody else would.
But for me, faster is always
better.
Because I think ultimately, the
consumer is seeking certainty.
And the faster you can provide
that level of certainty, and thisisn't a base assumption here of
(11:57):
mine.
This is data.
We've asked our clients, what dothey want above all else?
And the answer that we get back inevery survey is certainty.
And the way that we deliver thatcertainty is through speed.
For me, that's exactly what Iwant.
We reference it often, but itreally is a miracle of technology
when you think about companieslike Uber, when you think about
the Airbnbs of the world, what arethey really giving us?
As somebody who just booked ahotel room, actually yesterday,
planning an upcoming trip, there'sstill a lot of unknowns when you
(12:21):
go to hit that final pay buttonand you're really wondering, okay,
I know I've seen a couple ofphotos of this hotel, but I know
you're dressing it up for me alittle bit.
I know that you're only providingthe best photos.
So then I've got to go look at theuser photos on Google and other
places.
Like I have to do all these other
things to like validate, but likeif I truly trusted the information
and I truly trusted the providerand I've had great experiences in
the past, and I know that so manyother people around me are having
(12:43):
this great experience.
I just want you to deliver
certainty to me.
And I want you to deliver it very,
very fast.
So I think that for us, it's so
important to try to just deliverfor our clients in a way that
they've never seen done before.
And I do believe that there is a
future world in which that couldbe real.
We're like, why does it take timefor all the reasons that you just
mentioned?A lot of it is just reworking of
(13:05):
information.
You mentioned one thing that
doesn't cost anything but getsre-verified usually three to four
times throughout the process isidentification.
The broker collects the ID, thelender then confirms and collects
the ID, and then the closingservice and or attorney, whoever
is providing the legal documentssuch at closing, they then do a
recheck of the ID.
I get it from a fraud perspective.
Why are we doing that?Again, it's chain of command.
It's fraud mitigation, it's allthose things.
(13:26):
But there are much better waysbiometrically and otherwise to
verify identification and makesure that someone's name is what
they're telling you it is andmatches the ID and matches the
credit report and matches allthose other things.
That technology is not 100 yearsaway.
It exists today.
We just haven't found a way to
bring it all together into thesame platform, which leads me to
my next question on that, which isif I'm thinking about Funmore,
obviously, I'm very intimatelyfamiliar because we are a client
(13:47):
of Funmore.
We were one of the first clients
of Funmore in many ways served asa consultant to helping build the
product that exists today to helpbe suitable for our business.
And we'll continue doing so tomake that product great.
But how should I think aboutFunmore if I'm unfamiliar?
Maybe I'm a brand new mortgageagent and I'm hearing, hey,
Funmore technology, what is itexactly if I've never really done
a mortgage before in my life andwho does it serve?
(14:10):
Yeah.
So thanks for sort of setting me
up to pitch fun more a little bitthere.
But if you've never heard of us oryou're brand new to the industry
or you needed to think about howwe actually support the ecosystem.
So a mortgage application iscreated.
You've written up your first dealand you submit it.
The action of submission thencomes to a back office of a
(14:32):
lender.
And that is where we sit.
So the minute the application iscreated, it then flows into a
workflow automation tool that wehave in market.
Just so I can jump in there.
When I think about the
application, like you're talkingabout Finmo or Velocity or
Phylogix or Boss or, you know, anyother.
Correct.
The agents working in that as
their application flow.
And then when they hit the submit
(14:54):
button from their application flowwith a full application, it's
entering Funmore.
Is that correct?
Correct.
Okay.
So they choose Rocket Pro on theirsystem.
It then goes into Rocket's lenderside of their business and their
underwriters will begin working onour platform too.
So that's a great example of wherewe would start the flow.
So our system has been designed towork with underwriters,
fulfillment specialists.
So these are people that would
(15:14):
actually evaluate documents toreview the document process.
We have some tools to automatethat now.
We have some tools going down thatchain again, the mortgage journey,
if you will, to get to funding.
After you go through the decision,
it then goes through a commitmentgeneration phase, and then it goes
into a fulfillment phase.
During that fulfillment phase,
there's a pre-fund and fundingprocess.
We have tools in market today thatautomate that.
(15:35):
So one of the things that mostlenders will do, and it's also
where some of these challengessometimes arise, is they do a
pre-funding check.
An example of an ID, well, was the
ID even part of this package?If it was, why does the name have
an S at the end and the mortgagedocuments don't?
So the things that get caught sothat when they move into the
funding process, it can go alittle bit faster.
(15:56):
And so that's a tool that we haveto validate all the lending
policies, potentially the insurerpolicies.
So this is the CMHC mortgagecounty guarantee or Sage and
mortgage insurers.
So it can run their policies as
well and make sure that all thosechecks have been done correctly
and moves into the fundingprocess.
That's typically where we sittoday.
(16:17):
We also are moving into theservicing side of it.
So we have a servicing platformthat's maybe two-thirds of the way
built and part of it's already inmarket with one of our lending
customers.
And so this is sort of
post-funding.
So after the application has been
funded, lenders are working withyour customers to ensure good
process.
Post-funding, this is things like
(16:38):
collecting payments, managing theloan, often upselling new
opportunities to these customersin this earning and process, and
then eventually discharging.
So all that technology is there as
well.
It's a lot It's a lot there.
So you're thinking about Fundmoretoday in the context of being the
solution for all like theunderwriting to pre-fund and then
connecting the other parts of it.
(16:58):
So it's kind of like that middle
point really where the magichappens for the lender themselves.
Correct?That's the way we view ourselves
today.
Like I said, it's sort of this
orchestration component.
If you think about the three or
four phases of a mortgage journey,you make the decision to buy your
home, you meet with your mortgageagent broker, you buy your home,
that's sort of phase one and two.
You then get into the lending side
(17:19):
of it.
They're making their decision.
That's where we sit today.
And then they fund the mortgage.
It goes into a servicing platformor core banking system or
something like that.
Sort of the last phase of that
journey.
And today we're sitting in that
middle phase with a little bit ofthe last phase as well.
Awesome.
So right now, I mean, very
code-based driven, you know, Iknow there's a lot that had to get
(17:41):
built out to get there, but Imean, it's right in your name,
right?Fundmore.ai.
How do you think about AI playinga position in the lending space?
or automated underwriting or frauddetection, all the way down to
picking the loan product, whichone would think might be simple,
but not as easy as people think.
Often the wrong loan product is
chosen either at the broker levelor the lender level, even like
(18:02):
matching it to rate.
One of the things that our teams
have been working toward is like,just how do you pick the right
rate, the right investor?Like how does AI, some internal
decisioning improve the experienceoverall in the future?
I think there's two worlds of AI.
And I think there's the, we'll
call it five to 10 year version ofAI.
(18:24):
And then the one that's availabletoday.
I think in five to 10 years, itprobably gets to a yes, no. And I
say that because I think thecapability of what we're seeing
today and some of the technologythat's being built around, like
you said, the pricing engines, howit makes more complex decisions
very fast.
So if it can look at all these
different data points from theapplication to the documents to
the lending policies themselves,the product guidelines that are
(18:45):
all associated with this andunderwrite a deal, to be honest
with you, it's available today.
But I think for a lender to be
fully comfortable with that sortof context driven decision, we're
probably five years to 10 yearsaway.
And then you have people that arehyper enabled to just say yes, no,
yes, no, yes, no, to validate it.
And you're doing that more from a
risk compliance standpoint thananything else.
I think where we are today, it'san exceptional augmentation or
(19:07):
enablement tool for those that arelooking to adopt it.
And I think there's some key areaswhere you're going to start seeing
benefits.
One, I've talked about a couple of
times here, but it's around thedocument review phase, its ability
to take unstructured andstructured documents and really
understand what's in there.
So that's one.
(19:27):
And then you can get to avalidation and acceptance much
quicker.
And if there's challenges within
it, that can be exposed muchfaster.
So if you're an underwriterworking on a file and within
seconds, it's telling you, look,the income's not adding up.
And here's why.
And I think the here's why is the
important thing.
It's not just, you know, there's a
bunch of bank statements and it'sgiving you some numbers, but
(19:48):
actually giving you some context.
And here's why is because it's
actually reading the lender'spolicies and procedures.
And it's saying, look, based onour policies, we can't actually
accept this type of income forthis type of product.
And so to your point about, youknow, having it make a better
product selection, well, it canalso make a product selection
quicker or make can also make aproduct selection quicker or make
(20:09):
the adjustment to the productselection.
So when the underwriters arerunning scenarios and trying to
find a way to make the deal work,it's enhancing and enabling a much
quicker experience.
That's a use case on the backend
for lenders that they're going tosee some value over the next
couple of years as it becomes moreand more available.
And then I think there's two otherreally great use cases for AI.
(20:32):
And I think first one is I'll goto the servicing side of the
experience right now.
And you can think about any one of
you have a mortgage, you probablylog into your TD, RBC, Rocket
Mortgage app, Rocket Mortgage app.
And you're going to go through
that experience and ask, I need tomake a payment change.
I need to increase my payment.
I want to pay my mortgage early.
(20:53):
And typically now there's awaiting process.
Like I gave an example, we justmade a payment on our Scotiabank
mortgage.
My wife seems to do this like
every quarter.
She likes to pay something off.
We go and say, let's initiate apayment.
And it takes seven or 10 days forsomething to actually happen.
My assumption is someone'sapproving it on the back end and
then eventually someone triggersthat action to pull the money out
(21:16):
of our account and put the lumpsum payment on it.
When I think about that experiencethough, it's ridiculous.
It shouldn't be able to make apayment the same day.
Part of that is payment railtechnology improving.
Part of it's just how I engagewith it though.
Now, when I first go in, I'm notreally familiar if it's my first
time wanting to do this and tryingto understand this.
If that whole process is nowthrough a co-pilot or GPT type
(21:36):
experience where I'm just askingit questions and it's giving me
feedback and giving me the actionsthat I need and confirming it,
that experience for me is a lotbetter.
And this can be done throughvoice.
It can be done through texting.
It can be done through an
interactive app.
That's a use case that's also
available today.
And you're starting to see it pop
up more and more in financialinstitutions.
And I think you're going to seethat trend continue over the next
(21:57):
couple of years, where Orwells aregoing to have better experience
communicating with these agents atthese banks.
These agents being these GPT typeagents.
type agents.
Yeah, an AI bot.
How much of that iscomfortability, do you think?
Because I'm thinking back likejust a few years ago and maybe
even up until recently, peoplewere skeptical.
And I think, you know, the averageconsumer, like technology
companies are often trying totrick consumers into not
(22:18):
recognizing the fact that theywere talking to an AI bot.
But now it seems that people areactually more comfortable.
And I think that'll even grow overtime, that people are going to get
more comfortable knowing thatthey're talking to an AI bot.
But I think it's all their problemin three minutes, as opposed to
waiting seven to 10 days for abunch of humans to press a bunch
(22:38):
of buttons on the back end.
Like, why would they want to wait?
Is the way that I think aboutthat.
Are you seeing that too?Because like you some said, of
these things exist to wait is theway that I think about that.
are Like, you seeing that too?Because like you like said, some
of these things exist.
It's about implementation.
It's about comfort.
Like, are we approaching that
level of comfort yet?Or do we still have a ways to go
to?I think the demographic shift as
(22:59):
millennials are becoming a largerpopulation base shift as
millennials are becoming a largerpopulation base who grew up on
mobile devices, I think is goingto be the triggering factor that
those that haven't fully adoptedor become comfortable with it
That's an inevitability I think isgoing to be the triggering factor
will.
that those that haven't fully
adopted or become comfortable withit will.
That's an inevitability I thinkwe're all facing.
But I also think the way it's ableto adjust to you in any mood that
(23:21):
you may have on that particularday, engaging with your financial
institution, as an example, isalso a big win for you as a
consumer or the financialinstitution behind it that you
know if something went wrong andyou're irate and you're able to
talk to something that you know isactually able to empathize with
you very quickly and change itstone whether that again be over
phone and it's a voice or whetherit's you're texting or messaging
(23:43):
something a bot is an incredibleuse of ai today and i think it
helps improve that customerexperience which ultimately will
make this become more and morecomfortable for the average
canadian looking to incredible useof AI And I think it helps improve
today.
that customer which ultimately
experience, will make this becomemore and more comfortable for the
average Canadian looking to dosomething or change or make an
(24:04):
update on their situation.
I also think there's a world where
you actually don't have to makethat call.
And I think this goes back to myfive or 10 year vision.
This was the last point I wasgoing to make.
I actually think the averageperson will have an agent that's
going to live in their iPhonewallet or Android wallet.
And that will be the data thatneeds to share with financial
institutions.
And the banks will have their own
agents.
And these two systems will just
talk in the background.
And it's going to give you the
(24:24):
opportunity to simply say, do youwant your mortgage renewed?
Or do you have an update coming upthat you want to make a payment?
It looks like based on yourfinancial situation, you'd be
probably best suited to make alump sum payment today.
You accept it and it's just done.
That's probably the 10-year path
where you have all the servicingcomponents of your financial life
will be solved by an agentrepresenting you and an agent
representing your financialinstitutions.
That is a very bold and excitingvision as I think about it.
(24:44):
So to summarize back to you in away, picture an app on your phone.
That app is your finance app,right?
The way that we may think about amint or a credit karma or borrow
well or something like that.
And instead of being somewhere I
can just go look at all myfinances, it's actually a place
where I can command my finances ordictate what my finances are going
to look like.
So I would just go in there and
I'd be able to type text or voiceto text, please raise my payment
on my mortgage up to the 2020limit that I can and make one
(25:08):
extra payment a year within theallowable timeframe and can take
that as instruction, communicateas an AI agent to the AI agent at
the financial institution and makethose things happen for me.
That is very cool.
10 years would be incredible.
It might be a little longer, butthat to me is the future future of
finance.
Yeah.
The only caveat I would put inthere is that I think it will also
make predictions for you.
So it's not you just having to
command it.
It's actually making the
recommendation to you saying,look, I think it's in your best
(25:29):
interest to do this.
And then you making that decision,
I think it's important you controlthe decision, but I think it'll be
in a position where it has thatcapability.
Yes.
You should refinance.
You should renew your mortgageearly.
You should stop this automaticpayment for some subscription
service that you no longer useanymore to save money.
I couldn't agree more.
And I, for one, am very excited
about a future in which thathappens.
I want to remove many of thoseinconveniences from my life.
(25:49):
And as I think about thegenerations coming behind us,
Chris, they demand convenience inall aspects of their life.
They don't want to deal with anyof these things when I think about
the demographics, becauseeverything has always been right
here.
They've never had to go to a
library and go through a cardcatalog to find the book that they
want.
They just type in the name of the
book and they hit order in asingle click.
(26:11):
And the book either arrives totheir front door or you know
downloads right to theirapplication and even the fact that
that might take you know 10seconds of load time is an
annoyance to the generation comingbehind us so that is i believe
where we're going now the questionthen becomes like does that excite
you and i guess to the follow-upto that so call it a two parter,
(26:34):
if you will.
What would frustrate you today
about the current experience?And then again, building off the
back of that, like what excitesyou about that future experience?
Yeah, I mean, I'm still frustratedthat we've been driving this
mission for five years.
And banks have been on this
journey of digital transformationfor, it seems like as long as I
can remember, it seems to be thebuzzword.
I think you go back and they hadbuzzwords all the way back to the
(26:57):
fifties of automation.
You know, and we're still sitting
here in 2020s and automation isstill a word in their digital
transformation journeys andprojects.
It's slow moving with financialinstitutions and if I could wave a
magic wand I would find a waywhether it's us or someone else
that's trying to do some similarthings in market that we just jump
(27:18):
forward and wave a magic wand andsupport this digital
transformation so that we canexecute on this mission that I
have that you know how do you makeit easier for everyone so that
more people can buy homes?It's really simple.
But until there's a way to speedup the digital transformation,
that's my frustration.
I think there is a lot of cool and
exciting technology and innovationhappening around the space, but
not getting full adoption from thefull ecosystem as fast as I'd like
(27:40):
it, you know, makes it difficultto execute on the timeline that I
would like to execute it on.
And then, you know, as part of
that, again, like you're obviouslydoing some pretty cool stuff.
I see a lot of new players poppingup.
I actually don't think theinnovation will come from inside
of the big legacy institutions.
I think the upstarts are going to
be the one to bring that.
(28:02):
And I think others will eventually
be forced to adopt that if theycan't figure it out themselves.
So what excites you as you lookforward then?
I think I think that, you know,the nice thing about the real
estate market in whole is thatit's a gift that keeps on giving
and that sky's sort of the limitfor opportunity around innovation.
That there are so many brokenprocesses within that entire
experience from the minute someonedecides to buy a home until you
(28:22):
securitize it and sell it on intoa secondary market and all these
things that happen well down thestream of funding.
There's continuous places forcompanies like mine to go and
yours, frankly, to go and findways of improving and getting to
an overall better experience.
And that, you know, it's exciting
that there are improvements comingand that there are improvements
here today, but also that there'sstill lots of things to go and
(28:44):
fix.
And, you know, maybe it doesn't
entirely answer your question, butit's sort of how I see it that you
can keep coming up with crazyideas and figuring out, is there
an opportunity and someone willingto work with you to go execute it?
Yeah, totally get that.
So then I feel like I know this
answer in advance just based onour conversation, but I still have
(29:06):
to ask it because maybe it's evengrander.
What do you want your legacy tobe?
What do you want your impact to beon the industry and life?
That's a big question.
I think at the end of all of this,
you know, two parts, if I can helpchange the way mortgages are
processed, when we sort of hang itup, it'll be a win.
If I'm sitting here in howevermany more years and very little
(29:29):
has changed, that will not besuccessful.
Even if we move the needle alittle bit, I don't think it's
enough.
You know, I really want to end
this journey with saying weactually made an impact on how
mortgages are processed and, youknow, supporting the Canadian
getting a home.
And it's probably a big statement,
but that's really why I'm tryingto do what we're trying to do from
a different perspective, just onlife in general.
(29:51):
And I don't know, I think it's toobig of a statement to kind of
reflect too much on it.
But once this is done, I'll go
find something else.
Like where's the next door that
will open and figure out where I'mgoing to go next.
Last night, I had the privilege ofsitting next to someone.
(30:12):
He was telling me his life journeyand it was quite interesting.
He's about our age.
And you know, he started off as a
working in a restaurant and then,you know, decided that was done.
And then he went in and ended upstarting a technology company,
exited that, became a CEO of someother company, and now he's a
pilot.
It's just bouncing all over the
place, right?And figuring out where your life
takes you and having opportunitiesto, or being willing to open the
(30:33):
door and figure out what's next.
But it's probably a long-winded
answer.
I think it's fantastic.
It's about riding the wave andgoing where your heart takes you.
And I've always respected andappreciated you for that.
You know, when you get yourmindset to something something
like, I'm going to go do that.
And then you seemingly will go and
(30:54):
attack it and you attack it withall the energy that you have.
And I think that's the importantthing is, you know, knowing where
to apply that energy and thenultimately actually applying your
full self to that thing.
And you can build a lot of great
things that way.
So appreciate you, appreciate your
partnership and thanks for beingon the Lending Thoughts podcast
today.
Yeah, again, appreciate you having
me on and looking forward to doingsome cool things with you guys in
(31:17):
the next couple of years here.
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