Major industry players are revealing their approaches to challenges they face in scaling operations and pursuing efficiencies. 

American Pacific Mortgage President Steve Majerus, who sits at the helm of one of the largest retail shops in the country, said he is frustrated with "single solution" vendors that fail to think bigger. 

"I would rather go deeper with less vendors than have 'single solutions' that I need to weave together across the ecosystem," he said at Day 2 of National Mortgage News' Digital Mortgage conference, noting that this puts a crimp on scaling.

Leading lenders also said Wednesday the technology philosophies that have propelled them to the top have included more hands-on gameplans, following much-cited advice at the conference that Movement Mortgage Chief Operating Officer Lyra Waggoner shared on Day 1. 

Brandon Stein, chief strategy officer at top-five wholesale lender The Loan Store, described how his CEO, Phil Shoemaker, underwrote hundreds of loans to get a sense of how to weed out inefficiencies.

Stein said championing the company's efficiency efforts earned the buy-in of its teams because it demonstrated that they were the priority.

"We're not trying to replace our people — we have not terminated a single person due to automation," he said.

Spending wisely

Pennymac Chief Information Officer Mike Hogan described his company's shift in artificial intelligence adoption. Whereas a year ago the lender was trying to encourage employees to use AI tools, it's now trying to manage the associated token costs.

Teams that are keeping their data clean, and not bolting AI onto bad data workflows are going to differentiate themselves, JPMorgan Chase Executive Director Taranjeet Kaur said. She described the careful balance of AI usage and spending as "tokenomics."

"We are going toward cleaner data hygiene up top, as opposed to fixing something through advanced analytics later on, because that's always going to amplify or expand," she said. "To spend your tokens on a bad data program, that's just going to cost you."

Experts also discussed how they measure the return on investment of AI. Pennymac measures how well its AI transfers customer calls to loan officers. JPMorgan Chase measures human touches in AI processes and watches for drift from its performance over time. 

Tim Von Kaenel, chief strategy officer and head of lending and fintech at technology and consultancy CI&T, said firms need to think bigger. Rather than shaving minutes off of inefficient processes, for example, AI can allow lenders to automate or eliminate the process entirely. 

"That's where you're going to see substantial, game-changing improvements in metrics," he said. 

Compliance and regulatory risk

Lenders and vendors also need to remain wary of regulators who continue to step up scrutiny despite some federal pullback. The industry may outpace regulators in terms of expertise, but  examinations are still being conducted and oversight is still being proposed. 

Attorneys and lenders emphasized the need for audit trails for both development and compliance purposes. Both sides of a partnership need to be ready to explain how their AI and front-end technologies work. 

"It's important for vendors and lenders to work together and really kind of strive for best practices and compliance," said Matt Jones, partner at Mitchell Sandler. "Sometimes there can be a tension between what gets shared and what does not, but both companies are eventually going to be asked to account for it."