- 2 hours ago
Copperlane co-founders Athan Zhang and Brianna Lin join HousingWire’s Allison LaForgia to discuss why AI adoption must come before ROI, how lenders can encourage loan officer buy-in and why reducing human touches and measuring real usage are critical to successful mortgage automation.
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00:08Live from Dallas, Texas, I'm Allison LaForgia, and today I'm sitting down with Ethan Zeng,
00:13the co-founder and CEO of Copperlane, and Brianna Lin, the co-founder and COO of Copperlane.
00:19So we're going to jump right in. And, Ethan, Brianna, thank you for sitting with me today.
00:25Allison, thank you so much for having us.
00:27Now, I want you to tell me a little bit about what led you to launch Copperlane.
00:33What did you see missing in the industry's approach to AI?
00:40So for a little bit of context, I think this is a question that a lot of people give us
00:44as you see us around at conferences and at different trade shows.
00:49But both Brianna and I actually have family in mortgage.
00:52That's kind of where the exposure to the industry came from.
00:55But we both grew up as, I'd say, tech people, had technical backgrounds.
01:00And so as we started getting into the world of entrepreneurship and fell more into mortgage,
01:07the one thing that we saw a lot was that a lot of the innovation in the space was coming
01:12from people who came from the industry.
01:15They really understand the problem, but a lot of the solutions that they put out maybe wasn't giving the results
01:24that people wanted.
01:25And so when we sought out to build what Copperlane is today, the main thing that we focus on is
01:30bringing our product taste and product engineering,
01:32but also understanding that the one thing that people most likely doubt about us is our understanding of the process
01:39and the industry.
01:41And so that's why we're always very dedicated to coming to these shows, dedicated to meeting our customers in person,
01:48talking to their loan officers and really understanding the process because that de-risks what our weakness is.
01:54And that allows us to build a much better product because we're both the people who see what's happening on
01:59the engineering side,
02:00but also are talking to the users face to face.
02:04I think that's such an important clarification point.
02:07And because you both have such long experience seeing the industry,
02:12it's something that you need to give more visibility to because you guys have not only brought in a new
02:18focus
02:18where you're looking at something with fresh eyes from the tech side of it,
02:23but you have deep industry knowledge and understanding of those problems and those issues
02:27so that you can address it in the best possible way.
02:32I want to talk to you a little bit about something that I think can get a little sticky.
02:38We as an industry need to talk more about adoption before we talk about ROI.
02:46Why do you think AI adoption needs to come before ROI?
02:50And what happens when lenders invest in technology that, quite frankly, LOs aren't using?
02:56I think that's an excellent question.
02:58I think there are steps to when a vendor sells a new technology to a lender.
03:04First, the lender makes the upfront investment to believe in this technology,
03:08to believe that it can generate ROI.
03:10But there are quite a few intermediate steps that you actually need to take still to get there.
03:15One of the biggest ones that we see is driving adoption with LOs.
03:20When we sell a product, there needs to be buy-in one from the executive team.
03:24But then after that, you actually have to get buy-in from the individual users too.
03:29In most cases, this means getting buy-in from loan officers.
03:33I think it's particularly difficult in this industry because loan officers all have their own workflows.
03:40They all have their favorite processor.
03:42They all have their own tool set up.
03:44And it's very difficult to get them to adopt new technologies because no one really wants to change their ways
03:50as much.
03:51So thinking about adoption and how we can bring technology in a way that doesn't disrupt how they currently run
03:57their own workflows,
03:58I think it's a huge thing for lenders if they want to see ROI.
04:02I think that that's an important clarification.
04:06And I want to dig in there a little bit more because it really can be an incredibly difficult conversation.
04:13And I'm interested in your take.
04:15Why is it so difficult to get loan officers to change their habits?
04:20And where do you think lenders are getting that adoption process wrong?
04:27I think there's two pieces to it.
04:30One is loan officers can be stubborn and they don't want to adopt the new technologies.
04:34And then the other piece is the vendor as well as the leadership team need to be pushing new technologies
04:41more.
04:41A lot of the speakers we see going on stage today at Housing Wire are talking about the only moat
04:47that lenders still have in the current market
04:50is if they can find a sustainable way to cut the cost of production.
04:55And I think this ties into the general talks right now that people have about AI.
05:01Leadership teams are bought into AI and its potential, but they need to convey that to the people who are
05:06actually using it still.
05:07So one of the parts of this is actually getting the loan officers to try it out, to taste the
05:13value for themselves.
05:14And that allows them to actually adopt the product.
05:17And I think the lender plays a huge part in pushing that workflow internally for the LOs.
05:23When, let's say, you don't have a great rollout and you have AI adoption that is stalled, where does the
05:32responsibility lie?
05:33What role should leadership play in making a new technology switch?
05:40I think it's really hard to say where the responsibility lies, but it's most likely you want to put it
05:47on the people that you work with.
05:49In this case, it will be vendors, right?
05:52There are two cases where you see rollouts.
05:54It's either an internal effort or it was an external effort.
05:57However, if you have an internal effort, then you need to make sure that you have clearer success, like milestones
06:04for your internal teams, just as what you would expect out of external teams that you bring on with vendors.
06:10Now, as a vendor, right, it's hard to say that the responsibility belongs in us, but it really does.
06:17When we work with our customers, we expect a level of cooperation, right?
06:22We can only do so much to help improve your life, like your workflows, if you're going to work with
06:29us.
06:29Let me help you.
06:30Yeah, right.
06:31Let me help you.
06:32But it's also, we know it's our responsibility to deliver results.
06:36And so we will be very hands-on in the beginning of a lot of these processes to make sure
06:42that adoption happens.
06:44I think loan officers, like, are stubborn, but it's not something that is, like, belongs only to this industry.
06:53People everywhere don't really adopt new tools, and they only will if people rave about it or if they think
06:58it's cool.
06:59And how you get people to rave about something is if the first person who tries it thinks it works
07:03really well.
07:04And that's why first impressions matter a lot.
07:06And that's why in the beginning of processes, we tend to be very hands-on.
07:11I think that that is such a fresh take, where you guys lean into accountability for adoption.
07:18And clearly, that's something that you guys both feel strongly about as leaders.
07:23So I want to talk about your leadership styles for a second, because I think it does make a really
07:28big difference.
07:29As co-founders, how do your leadership styles complement each other?
07:34And how does that shape Copperlane's approach to growth?
07:40Yeah, I mean, I can start off with talking about Aethan.
07:44So, first of all, great CEO, great person to work with.
07:48I think we have very different ways of thinking about things in a way that complements each other very well.
07:55Aethan is very much a big-picture thinker.
07:57He thinks about the macro environment.
07:59He loves talking to lenders and understanding what their broader goals are amidst high rates and low-revolume production environments.
08:07So I think he's definitely a big-picture thinker.
08:10He thinks long-term about the vision, the roadmap, what people want longer-term.
08:14And that helps align the company very well.
08:17Yeah, I mean, I think Brianna and I are both very well-rounded people, which is something that I think,
08:22in our position, we need for this industry.
08:26But at an atomic level, the complementary part is that she's very good at being detail-oriented.
08:33And there's, in the early days, right, we do, like, as people always say, we wear many hats.
08:38And so you can see this in how she brings her execution with things like organizing our events or our
08:45sales motions.
08:46But also, she's very much involved with our product design and getting customer feedback.
08:52And I think that level of detail is something that we also need because that takes us from the 80
08:56% to the 99%, right?
08:59You both have mentioned being hands-on throughout this conversation and how lenders should not only approach adoption, but how
09:08they should look at ROI.
09:10I want to see what you think lenders should measure beyond AI investment and ROI.
09:18And I know that that's a tricky question, but I'm interested in both of your perspectives on it.
09:22And how they can tell whether adoption is actually happening or if it's just something that they're seeing anecdotally.
09:32I think one interesting thing that we like to measure when thinking about adoption is how many human touches we
09:41can reduce per loan.
09:42So I remember early on, one of our customers told us when we first signed them, they said,
09:48if you guys can reduce the number of emails, phone calls, and texts that our loan officers need to make
09:53today, that's already a very huge success for us.
09:56When we think about bringing AI and automation to the space, we're big believers in the fact that, you know,
10:0350 or 70% of automation is not enough.
10:07You need to be 95% automated or more in order for the automation to be actually useful.
10:13So we try to bring Penny in a way where we can automate a huge portion of the workflow.
10:19We can handle the handoffs between all the parties involved in a transaction.
10:23And that significantly can reduce the number of times a human loan officer or processor needs to go into the
10:30loan.
10:31And I think that that human touches of humans going into a loan, working it, reducing that number is a
10:37huge proxy for adoption.
10:40Yeah, I mean, I think for us, one of the things that we measure a lot is usage.
10:46And the reason being is because our product is very much an optional product, right?
10:52You don't have to replace anything in your current stack.
10:56We're very low lift, right?
10:58We kind of are purely an addition.
11:00And so if loan officers are using us, that tells us something is going well.
11:05You might not expect that out of some of your other tools because it's more of if loan officers aren't
11:10using this tool, then something is going seriously wrong.
11:12Right.
11:12But with us, we see very high stickiness.
11:16We measure internally.
11:18We measure how many users are using us on a daily basis.
11:21Right.
11:22And how many, like with that, like usage, what is that engagement?
11:25How much are they actually using it?
11:27And that's what we really try to push.
11:30It's implied that if people are using this optional product, it's helping them in some way.
11:35Because as we know, loan officers have a hard time adopting things that don't really help them.
11:40And this is something that we measure ourselves to improve our product, but we also report to our customers to
11:45give them insights.
11:46I feel like it's one of those things until you use it, you don't know how it's going to, like
11:50you don't know what you don't know.
11:52Yeah.
11:53Which brings me to where I want to end today's conversation.
11:56As you guys look ahead, what do you think it will take for AI to become a part of LO's
12:02day-to-day work?
12:03What gives you confidence in the industry's potential to adopt it?
12:08Hmm.
12:11I mean, I think it's less about confidence.
12:15It's more about something that we know it will happen.
12:17I don't think anyone is going to get on stage and refute the point that AI is coming for this
12:21industry.
12:22It's really the one thing I've seen from a lot of the conversations I've had is people are very easy
12:29to diagnose problems, but solutions don't come out easily.
12:32Right.
12:33Like this is just something that's always true.
12:34I think what will happen is like what we've seen in 2016 with Rockets first digital experience.
12:41It will take some groundbreaking like experience to come out for everyone to really wake up.
12:48Right.
12:50And so I think the call is going to come from inside the industry.
12:56Something is going to happen and then people are going to realize that they have to start acting.
13:01I think everyone knows they kind of want to do something now, but with how tight the market is and
13:05all these things, it's easy to think that, you know, I'll wait.
13:08But by the time that happens, you're going to be too late.
13:12I think an interesting point there is that you mentioned that this is something that's low lift and this is
13:19also something where you can just implement it.
13:22You don't have to change your whole tech stack.
13:24And I think those are the ones that people are looking for, where you can have something that makes your
13:29LO's lives better and that you can still deliver a great experience while allowing them to really lean into the
13:36task that they like.
13:37Because let's be honest, a lot of those human touches are brutal for us, right?
13:42Right.
13:43Especially the going in, hopping between systems.
13:46So I can't wait to see what's next.
13:50I can't wait for an update from both of you, Ethan, Brianna.
13:53Thank you so much for joining me today and I can't wait to see what's next for Copper Lane.
13:57Thank you so much for having us.