While real estate has been slow to embrace fintech, Adam Carmel plans to help him catch up and excel in space.
Carmel is the founder and CEO of Pollya company that seeks to transform the mortgage industry with a data-driven capital markets ecosystem that they believe delivers value every step of the way.
Filling a price gap that has lasted for decades
He worked in the mortgage industry for 15 years. Eight years ago, Carmel founded a mortgage company and began developing technology that reduced origination costs. He quickly realized that the biggest issue was software pricing, a belief that was confirmed by many industry executives he met during his research phase.
“They all said the same thing; they had the same pain,” Carmel said. “There simply hasn’t been a competition for 20 years. I went to our board and said there was this legacy software in the pricing engine vertical that I think could be disrupted over time.
This could certainly be disrupted, Carmel thought. He envisioned the mortgage industry’s first and only vertically integrated, cloud-native capital market, a software solution that starts at the point of sale and goes through the sale of loans and delivery to the secondary market. It focuses specifically on the capital markets value chain.
If so, Carmel and her team can focus on creating additional products and services to drive customer ROI. These initiatives would be driven by machine learning and artificial intelligence.
Why real estate has lagged behind in innovation
Why has real estate taken so long to be impacted by technology in other industries? Carmel said it was a tough business to operate. It is also plagued by many legacy software and solutions. Some software vendors have been distracted by the latest technology and lost sight of the mission. Both service and innovation have deteriorated.
The mortgage industry consists of three software categories, point of sale, loan origination and loan service. Innovators tend to work exclusively in one of them. Carmel saw an opportunity to take a different perspective.
“No one has ever considered capital markets as their own category. Historically it was just pricing engines and then you had these other discrete type providers that relied mostly on manual labor, things like spreadsheets and email telephony, to run their business “, did he declare.
“It is also a difficult problem to solve. You need deep domain knowledge, deep institutional knowledge, and deep technical knowledge. Then put these three vectors into one organization and do your best to attract world-class talent. It’s really very hard. »
The many advantages
Reach the goal, and the impact is huge, Carmel said. Reduce the cost of origination with an automated and scalable system and pass that on to the consumer.
Customers only need a few weeks to get to market, a shorter time than average. Carmel said Polly was very intentional about this. It cannot take months to achieve this transformation.
“We’re very focused on creating tremendous value for our customers,” Carmel said. “We see ourselves as a mechanism for them to reduce costs and increase revenue, and that’s increasingly important in the market we find ourselves in today. We didn’t want them leaving their old systems to join our growing network.
“And so we were very intentional and focused on making that as seamless as possible for a no-code deployment. They don’t need any IT support. We have a top-notch service. And do all the work. Then we ask them to do tests on what has been configured.”
Steps to innovation, beyond risk management
How did Carmel and Polly’s team deploy new technologies to drive this growth? Start by not accepting the status quo. Think about what could be and explore the most modern modeling and algorithms. Consider where they can be used to perform more manual operations.
Expose people to data so they can react to it instead of spending their time organizing it. Let technology take care of these tasks so businesses can take action.
Polly’s Loan Exchange offers automated auctions and real-time loans where the system automatically detects when loans are eligible for sale. Advanced bidding rules use business logic to optimize hit rates and sell loans to the right investors. TBA benchmarking enables real-time, market-based decisions that reflect bond market fluctuations.
Carmel said most vendors only focus on risk management but never look beyond that.
“After they were done with risk management, they never thought about how to accept these loan-level loans and maximize revenue,” Carmel said. “How do you automate this whole workflow and eliminate people going through 14 different spreadsheets, taking submission sheets from everywhere and trying to figure out these other things that are going on and then somehow come up another to the best decision.
“That’s not how it works.”
Are there opportunities in Metaverse finance? Currently, digital property as an asset class does not face the regulatory burdens of physical property, Carmel said. The protocols will not be as strict. There is no digital title; it is simply an NFT. Lending will likely be more asset-based than how traditional mortgage financing is done.
Carmel said Polly is ready to add value anywhere in the capital markets value chain. Their contribution will depend on where their customers see the problems to be solved.
“Usually they tell us, and then we reconcile that with the longer-term vision and how we want to create value and democratize data and automation for the entire market.”
- About the Author
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Tony Zerucha is a longtime contributor in the fintech and alt-fi spaces. Twice nominated for LendIt Journalism of the Year and winner in 2018, Tony has written over 2,000 original articles on blockchain, peer-to-peer lending, crowdfunding, and emerging technologies over the past seven years. He has moderated panels at LendIt, the CfPA Summit, and DECENT’s Unchained, a blockchain expo in Hong Kong.