Advancing title industry technology and how it can give businesses a competitive advantage were hot topics during this year’s National Settlement Services Summit (NS3).
A packed room took in a group talk on the matter led by Rick Diamond, vice president, agency IT director at Fidelity National Financial (FNF), and Erica Meyer, October Research CEO and publisher.
“How can we make the best use of AI?” Diamond asked the crowd. “How can we help on fraud? How can we help to make sure we’re protecting everyone involved in that transaction? That’s the customer, title agent, real estate agent, us underwriters and the vendors, as well.
“If there’s a problem, everyone is on the hook. How can we use technologies here today to not only differentiate ourselves as title agents but also make us more relevant as an industry? It’s a big job, something we all need to take on together. This industry must evolve and not continue to do the same things and it’s time to embrace new technology to enhance and protect every single transaction. We cannot shoot ourselves in the foot by not doing what needs to be done to communicate better and to protect everyone in the transaction, the buyer, seller, title agent, lender, real estate broker, underwriters, and vendors. There is too much outside pressures on this industry for us not to evolve.”
The conversation steered its way toward how title businesses decide whether to adopt a new piece of technology, considering factors including the aforementioned competitive advantage, security, efficiency, impact on partner operations, cultural fit and trading partner requirements.
“Information and stories on tech and cybersecurity are always some of the most critical things that are out there,” Meyer said. “We’re trying to get this information out and talk to the different vendors who are here about sharing those tools, to help folks who might not be here live get that information in their hands.”
Tyler Adams, CEO and founder of CertifID, said adoption of new tech is sometimes slowed by industry stakeholders not sharing enough information with each other.
“When you think about technology adoption curves, you go through the phases of early adopter, early majority and late majority,” he said. “I’d say we’ve gotten through the early adoption part. I’ve been at this conference since 2016 talking about fraud. We were there in the early days when no one thought it could happen to them. I think we’re starting to be in that early majority part now. It just takes a long time.”
Roughly one-third of real estate transactions are targets for fraud, Adams added.
According to a recent CertifID report, 74 percent of wire fraud recovery requests came from consumers with an average loss of $106,557 per consumer recovery case.
Of the recovery requests for wire fraud, 41 percent were buyer cash-to-close transactions, 24 percent were mortgage payoffs, and 11 percent were seller net proceeds.
Wire fraud recovery success rates for consumers were one-third that of real estate firms.
“Many people think that a remote online notarization (RON) transaction is more secure than a paper transaction,” Diamond said. “There’s probably an argument for both ways in certain circumstances. What’s going to drive more RON transactions is the lender. Could you see the lender community an eighth of a point off to do a RON transaction? You might get some attention like that, and really get the (RON transactions) moving that way.”
In addition to wire fraud protection platforms, technology set to become title industry standards includes blockchain services, automated property valuation models, eClosing, online title ordering and tracking, and, of course, artificial intelligence/machine learning (AI/ML).
Hoyt Mann, president and co-founder of Alanna.ai, said finding optimal use of AI and automation in the face of emboldened fraudsters couldn’t be more important.
“With AI, it’s about focusing the AI on the repetitive tasks,” he said. “Find the lowest-level tasks in your business, automate those, and free up your human capital. Have the funds available to hire that security engineer or the human capital to focus on security issues. None of us here are making 10 times more than we made last year, but I guarantee there’s about 10 times the security threats coming at us.
“If we don’t start focusing on leveraging AI and how to do our business faster and better, we’re going to grind to a halt.”
Those leading the discussion and several audience members cited ways the COVID-19 pandemic sped up adoption of new tech, whether that be in the title industry or any number of office sectors. Related advancement touched upon include remote work collaboration, digital customer engagement, paperless services such as RON, AI for risk assessment and digital marketing.
“What this industry did during COVID was incredible,” Meyer said. “We made it through and did incredible things throughout. Whatever these conferences can help with as far as pulling people together and sharing best practices, as well as education from the publications year-round, tell us. We want to hear from you.”
“All of this talk is about trying to figure out where we’re going,” Diamond said in conclusion. “Do we have all of those answers? I don’t. What I want you to take away from this is thinking about not just what we’re doing individually, but how we can work together to move this industry forward and keep it relevant? The trade organizations and these conferences like NS3 are a great way to make that happen, so we’re not all just running back to our offices working and thinking as individuals. All of us have a very big stake in what happens next in this industry, and you need to be part of shaping what that is.”