Digital Landscape

The world is being transformed by continuing advancements in technology and technological innovation, by a transition to digital platforms in financial markets, and by the role of data and the capabilities around data, whether its artificial intelligence, generative AI, deep language modeling, or block chain. The revolution happening in the present day has both complex points of friction and unforeseen threats. These challenges are an opportunity in disguise, but only if we are able to evaluate them and navigate at speed. This kind of leadership requires a comprehensive understanding of the market, of the policy environment, and deep experience, knowledge and insights in emerging technology and their practical application.

The Genie is Out of the Bottle

As an example of the transformative effects in financial services, Gate House Digital CEO/President Dain Ehring discussed the role of Artificial Intelligence (AI) in mortgage lending decisions in a piece in DS News. Amidst significant momentum for the technology, Ehring shared his insights on AI’s increased usage within the mortgage market. The “genie is out of the bottle,” Ehring wrote. Rather than looking backward, it is time to push forward, albeit deliberately, in the name of expanding credit to qualified unbanked applicants, fair lending, and common sense, he argued.

While acknowledging a need for sound guardrails, Ehring strikes a cautious note against government’s preference for ambiguity in the guidance, a trend that stifles innovation and product development in the private sector, and often leads to capitulation to the legal risks of their ingenuity, and ultimately, producing “increased fees, fewer services, and diminished access to affordable credit for aspiring homeowners.” “Without a thorough and prudent understanding of their appropriate role for the agencies, they could produce harmful unintended consequences,” Dain writes. “…Washington, D.C., must be careful not to wield a rusty axe, when a surgeon’s knife is more warranted.”

Dain warns that our oversight agencies need “not become a drag on the very thing most of our policymakers and government leaders want: mortgage financing available to families in need of affordable, quality housing, thereby creating more equitable homeownership.” In a note of optimism for AI’s future in mortgage lending, Dain explains that “artificial neural networks” are helping to overcome the objections of its skeptics and critics. Can AI be “be free of bias” as the top regulator suggests, Dain asks: “Compared to what?”

Digital Transformation Resources

See the Gate House Compliance Landscape page for more information and resources related to to consumer protection and fair lending/servicing.