Who comes out on top in title production when considering in-house work, outsourcing and the rising tide of artificial intelligence (AI)?
That question was posed to D. Bello CEO Jeffrey Bates and Pythonic Corp. co-founder and CEO Matt Younkle during the 2023 Association for Title Information Management (ATIM) Excel conference in Philadelphia.
The Title Report sat in on the talk, with panelists agreeing that outcomes with AI are often only as good as the humans who built it.
“We’ve done some things with ChatGPT, like asking it for a legal description of a certain document. It fails miserably,” Younkle said. “There’s a lot of capability it has as far as understanding natural language, but the domain specificity isn’t where it needs to be yet. Also, you’re feeding it text. A lot of the source material in the title industry is in the form of a document, whether that’s a PDF, scanned image, you name it.
“It seems that the key now is giving eyes to language models to see and understand what’s there. That seems to be where things are headed and has to do with some of the things we’re working on.”
In addition to title production, workflow management and client communication, panel members said process tracking, reconciliation, title search and commitment preparation are already being enhanced by AI or set to benefit from it soon.
Bates said that despite AI being an emerging technology, a perception has already grown that no error stemming from its work is acceptable, even as its architects construct it with human imperfection.
“Statistically, the self-driving car is already safer than a human-operated car,” he said. “However, how many people would get into the back seat of a car with no driver? A different standard is applied with AI. What’s the standard threshold with that, and how do you fit your business operations into it? In title, there are many variables that come in, whether it’s a new form or a change in the system. To make the AI side profitable, it’s very important the AI knows what it doesn’t know, what it can’t figure out.”
While outsourcing has been a growing trend across countless industries for decades, the COVID-19 pandemic and rapid shifts to remote work showed employers that even more tasks can be successfully completed away from the office.
The global business process outsourcing industry was valued at $261.9 billion in 2022 with annual growth of 9.4 percent projected from 2023 to 2030.
Advocates of the practice cite benefits including enhanced business scalability, changing fixed costs into variable costs, and expedited access to new technology in addition to broad cost savings.
Audience members asked the panel how rising standards of living in countries often used for outsourcing will play into future costs of the model versus automation or keeping work in-house.
“When looking at a lot of these technologies, you have to ask yourself after a while, ‘Does (the cost) ever really come down?’” asked Bates. “We processed something like 10 to 11 million title documents last year, something like 15 million or 18 million pages. We hear (optical character recognition) companies all the time say they can help, for something like a penny a page.”
Optical character recognition, or OCR, identifies text within a digital image and is commonly used to create an easily accessible digital version of physical paper documents. A 2022 study cited by Forbes valued the global OCR industry, which often includes outsourcing, at nearly $11 billion, with projected annual growth of 14.8 percent through the end of the decade.
“Turnaround times are always a huge factor in these decisions and, sometimes, there’s data you just can’t send offshore,” Younkle said. “So, we’ve had folks approach us about using AI services because they are not allowed to offshore due to agreements with lenders. There may be too much (personal identifiable information), whatever it is. It’s just not a possibility sometimes.”
Both panel members said balancing allocation of duties while striving for optimal efficiency between in-house employees, outsourced help and AI technology will be of the utmost importance for title and many other industries moving forward.
“You need to find that sweet spot where all these things are going to work together,” Bates said. “You want them to always create the best, most consistent and beneficial outcome for you and your clients. Find a way for all of them to interact and take the most advantage of what’s possible at any given moment.”
Bates said in-house staff remains a top priority across the industry, even among firms seeking new avenues for outsourcing and automation.
“When you utilize outsourcing or search automation, it can be viewed as a threat to the number one value that got us there,” he said. “These are the people who got you to the dance. Both (AI and outsourcing) face that same opposition. People ask, ‘Will this replace me, or will it fuel what we’re already doing and be a catalyst?’ Everything can work together where everyone benefits.”