“It is change, continuing change, inevitable change that is the dominant factor in society today. No sensible decision can be made any longer without taking into account not only the world as it is, but the world as it will be…This, in turn, means that our statesmen, our businessmen, our everyman must take on a science fictional way of thinking.” ― Isaac Asimov, Asimov on Science Fiction

In the 2013 fall issue of AMBA Matters, I considered a three-fold analogy for contemplating our industry from a 50,000 foot macro perspective, considering in particular, the role played by programs, systems and processes, in the article Trains, Quarterbacks and Architects. Today’s article is about the Artificial Intelligence (AI) train, which is running and picking up speed.

What is AI?

At its core, AI is about creating systems to do the work that would otherwise be done by humans. Be it physical work, such as sealing tomato cans, or analytically driven cognitive work, such as generating a beacon credit score, by evaluating a consumer’s financial history. The capacity of automated computer driven systems is growing exponentially.

I have been known to mutter or say, people just don’t get exponential. You may recall from your primary schooling years learning about exponential series (for example, one, eight, 16, 64, 128, excreta). If you’re like most people, such lessons were likely accompanied with glazed over eyes and wandering of the mind. Yet, the impact of such rates of change, as manifesting in the physical world, is everywhere. And it’s not just the doubling, it’s the qualitative differences and the increasing doubling speed. The more we learn, the faster we learn.

Indeed, we are at the precipice of a new era. Much like the crew of the Starship Enterprise in the Trouble with Tibbles episode, from the original Star Trek— we face the risk of being overrun by what we can call the AI train. Mortgage brokers, along with every other professional involved in real estate and mortgage financing transactions, need to be cognizant of the very real prospect that much of today’s work will one-day be done by an AI driven system for a fraction of the cost (both in time and in money).

Consider for a moment the extent to which we, as human beings, tend to define our lives according to a linear yardstick of time. Time progresses at a fixed pace, one year is always followed by exactly one more year. When the numbers are small and the rate of change is slow, an exponential rate of change is almost indistinguishable from a linear rate of change. It is only when the quantities become sufficiently large that the radical implications of exponential growth become apparent. Coupled with required doubling time compression, also known as accelerating exponential growth, it is only a matter of time before the capacity of computers displace the vast majority of human professionals currently performing the cognitively taxing analytical work involved in facilitating complex commercial transactions is upon us. How soon is not exactly clear, but it is a certainty nevertheless.

AI’s exponential growth and impact is already being felt in the form of an ever increasing insidious creep that at some point will hit hard, fast and seemingly suddenly. The speed of change will continue to accelerate with the adoption of cloud computing and the Internet of Things (“IoT”) – think big data connected. For further insight read Mother Jones, May 2013 article, Welcome, Robot Overlords. Please Don’t Fire Us?

We have already seen disruptive upheaval in many industries, and AI is poised to strike more. In some ways, it will be just a natural progression and inadvertent collateral damage is bound to ensue. Or as Tim Urban so eloquently said, “What does it feel like to stand here?” time

This is not meant for you to worry about the ‘Terminator’ coming. Leave that to the likes of Stephen Hawking, Bill Gates, Elon Musk, Steve Wozniak, Neil Bostrom and that whole crew. They know better. Just concern yourself about ‘Terminate Me’ and what that may entail.

While failure to attend to the impact of the AI Train is to court unnecessary disaster; all is not lost and my purpose is not to prognosticate apocalyptic. Oh contraire! With great changes comes great opportunity.

Already there are firms actively seeking to develop new applications of existing AI technologies to streamline real estate and mortgage transactions, unbundle services and reduce costs. Companies like MortgageHippo.com, are offering end-to-end solutions for securing a mortgage. Other companies, such as Conversica.com, are assisting with front-end customer relations by using AI software, capable of engaging with customers by crafting original emails to clients, without any real person entering a keystroke.

For those willing to be on the leading edge, there is ample room for growing your business through the creative applications of existing and future technologies—a topic I will cover in more detail in part two of the 2015 AMBA Matters winter issue. In the meantime, if you are interested in developing an AI strategy, feel free to call me at 403.209.4988 – our AI is standing by or out to lunch learning.

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