HousingWire Editor in Chief Sarah Wheeler sat down with Nicolas Guillen, co-founder of BaseCap Analytics, to talk about data, AI and the problems we still need to solve.
Sarah Wheeler: Your background includes experiences in banking and capital markets, including working at Morgan Stanley as a credit risk manager. How do you leverage those experiences at BaseCap?
Nicolas Guillen: I met my co founder, Steve Smith, at Morgan Stanley during the financial crisis. And we spent a lot of late nights monitoring data to analyze it and then figure out: How do we prevent what will cause the next financial crisis? We did a very critical analysis. We testified at the Federal Reserve with the analysis we did to help other banks do the same type of analysis. But to get to the point where data was fit for purpose, it took a really long time. So we decided to start a software company that took the frameworks that we used and enhance data and validate data quicker.
We started working with financial institutions, just given our background. But we built the platform so that it could help validate data in any industry — we’re looking at use cases in the airline industry for example. But our first clients have all been either financial institutions or some type of mortgage company, whether it’s an investor, a servicer, or an originator — we validate mortgage data throughout the life of the loan.
SW: What are the major challenges that companies have with their data?
NG: The biggest challenge every company has is that the amount of data that’s created now is greater than all of the data created in history. And it’s because every single person is creating data. We’ve thought of data quality as business quality — it is critical for businesses to have good, accurate data to be able to make faster decisions.
In the 90s, I think the priority was to warehouse data, just have data sit somewhere. In the 2000s, the priority was making data accessible and having “big data,” if you will. But in the past five to 10 years, the priority is no longer just having access to data. Everyone’s using data, but it’s how you use it. And there have been a lot of AI companies coming out with models that help come up with insights from your data. But the pipes need to be really clean and the data needs to be completely accurate before attempting to use any type of data since business-critical business decisions will rely on this data.
That’s why at BaseCap we’re so proud of guaranteeing that data is accurate and fit for purpose before it’s used by the organizations.
SW: There are tons of people out there talking about data, there are less people who address using data to really impact your business.
NG: Yes, in fact, when we speak to clients, one of our strengths is that we relate to the pain that they’re experiencing. Business people are the ones feeling the pain, and they rely on their technology teams to be able to fix any type of data problems. Since there are so many philosophies behind treating data and managing data, we will always sit on top of databases, but which specific databases we need to sit on depends on the client. We see the data and technology teams as our partners internally and the business people as the major beneficiaries of our offering.
SW: All this data represents a lot of opportunity for mortgage companies, but also poses a lot of risk.
NG: Yes. Our first use case was heavily reliant on regulatory data — credit risk data that went out to the Federal Reserve and the OCC, and so our target was always governance, compliance, and making sure that banks are using accurate data for this type of critical analysis. As a business strategy, we’ve always targeted organizations that are heavily regulated, because data has become such a critical component of their compliance and ongoing operations. Our background empowered us to create a tool that’s built with that compliance and governance framework in mind.
SW: How is BaseCap utilizing AI?
NG: We are using generative AI to enhance the policies we use to find anomalies in data. It’s a critical part of the expansion we’re planning into new industries, which is going to be incredibly efficient because of the use of AI. The way we create all the policies to check on the accuracy of data for banks, has relied on expertise from industry experts and team members. Having the power of generative AI sourcing expertise for other industries with the proper guardrails, of course, is going to enable us to have a much leaner operation to scale.
SW: When you look five to 10 years out, what will be the next set of problems to solve?
NG: It’s hard to tell, but some of the discussions that we had at NAHREP‘s L’Attitude event involved understanding new platforms and new things being offered. And within those, we have blockchain, we have signature technology, we have background checks, credit checks that are done a lot more seamlessly nowadays. And all these things are huge innovations for the mortgage industry. And every industry is going through similar types of innovations.
But for us to be able to really see all of these come together, there needs to be a seamless and efficient integration. The orchestration of all these platforms is going to be what drives the actual change in how things are done.
SW: You mentioned NAHREP and L’Attitude, where you were part of the Matchup pitch competition last year, and they became one of your investors. What has that investment meant to BaseCap?
NG: L’Attitude has a set of partners that are incredibly influential, not only in the mortgage industry, but in tech and politics and in business. The former CEO of United Airlines is a partner. We have a team that’s incredibly involved. Gary Acosta, the co-founder and CEO of NAHREP and a partner at L’ATTITUDE Ventures, meets with us on a weekly basis to discuss sales pipeline and makes introductions from his industry network. And we have expertise sessions with finance experts and sales experts that help support our operation. It’s exactly what we were looking at in an investor: having that involvement and alignment that’s not limited to capital but that also adds day-to-day value to our operations.