The broker of the future: Fintech CEO outlines his vision

“We need to bring together the lenders, customers, brokers, real estate agents — everyone involved in a home purchase — and make that work process infinitely more efficient.”

According to Mr Bulfer, by 2022, artificial intelligence (AI) and technology are not a threat to the mortgage broking industry but instead could offer brokers the ability to provide a more personalised service.

Building on comments made the previous day by some of the delegates around AI changing the focus of jobs from processing to service-led, Mr Bulfer outlined what he believed could be on offer to brokers (in the US) in the next five years.

He said that if lenders, real estate agents and consumers shared data and harnessed technology to create a more open picture of what is available on the market (and if consumers created a StreamLoan Financial Passport “like Apple Pay for your finance DNA”) that would benefit all players in the home buying process.

Mr Bulfer elaborated: “We have a number of different engines that we’re building and starting to deploy that monitor macro-level forces in the economy, such as interest rates, currency exchange rates. Because if interest rates change for better or worse, that impacts [a borrower’s] debt-to-income ratio and the type of financial products you can qualify for.

“So, that can be very informative and you as an adviser can either manually, or via a technology service, start to recommend different products in near real-time, which would be useful when interest rates change every day.”

Touching on credit reporting (the United States’ credit reporting covers both positive and negative credit), Mr Bulfer suggested that there are already some micro engines monitoring credit, which brokers could also tap into.

“If you monitor someone’s credit rating and recommend the right products at the right time, that’s a pretty big deal. With the use of data, we can manage debt-to-income, loan-to-value, etc., and we can get really smart on putting the right financial products in front of the right people, by better understanding the simple requirements and matching those against the consumer.

“If you can identify that opportunity or insight for potential borrowers and get it in front of them, they are probably going to go with you, rather than waiting, or having another broker or loan officer chase that down.”

Mr Bulfer told delegates that the way borrowers find and buy houses could also change to a “reverse auction” model, thanks to “consumer demographic, psychographic profiles”.

He explained: “Looking at customer archetypes, segmentation and all of that is going to start to play an interesting role in matching against inventory. For example, I’m probably going to be looking for an eight-bedroom ranch home in San Francisco, [but] it just doesn’t fit my profile. So, there is a certain inventory that I’d want that fits my lifestyle and family requirements, etc.

“If you can start to match the houses that are available on the market in a more real time way against the lending products that are out there, and then match it against the consumer profile, it’s pretty interesting.”

He suggested that these could actually lead banks bidding/tendering for mortgages.

“I don’t know how soon this is going happen, whether it’s a year out or three years out, but I think it will play out where you will have banks bidding on the business in a blind way. They’ll be saying I want ‘high risk, high interest rate’ or ‘low risk, low interest rate’ borrowers, and all of this will be automated.

“But that’s not to say people won’t be involved in the process, because there are still going to be advisory opportunities for brokers through all these specific deals. This is where the advisory and strategy comes in, and I think that’s how the industry is going to be shaped moving forward, whether you are a broker or a loan officer.”

Mr Bulfer concluded: “It’s not like you can push a button and have a loan, but it does make it a lot more efficient and provides a more tailored option.

“So, you want to be able to communicate faster, cheaper, better and in a secure way but with the notion of data and document exchange. We aren’t yet there, but we could be soon.

“The fundamental plumbing we’re just starting to lay right now — we need to get that in place first, which is partly what StreamLoan is doing — before we can connect the pipes.”

The Adviser’s US Study Tour 2017 is designed exclusively for Australia’s elite mortgage brokers and third-party industry leaders. It focuses on innovation, tech, data and how the best US mortgage brokers dominate their markets.

Speakers at the conference included, among others: Jonathan Miranda — director of strategy, technology at ‎Salesforce — who spoke about the future of AI; Matt Swanson, CEO of Augment, who spoke about the future of chat bot technology and its ability to create a socialist environment (where the cost of things will plummet); and mortgage broker and High Trust founder Todd Duncan.

The three-day study tour has been developed by The Adviser with support from financial services executive Steve Weston, StreamLoan CEO and co-founder Stephen Bulfer and StreamLoan head of business development Aaron Sturm.

Find out more about The Adviser’s US Study Tour and keep and eye out for more updates from the tour.