What’s next in real-time data & analytics

Maleesa Smith: Hi, HousingWire listeners. My name is Maleesa Smith, and I’m managing editor of content solutions here at HousingWire. Today, I’m joined by Michael Saccento, senior director of product management, advisory, and data science products at Black Knight, as well as Richard Lombardi, senior vice president of data strategy and innovation at Black Knight. In this sponsored episode of “HousingWire Daily,” will be focusing on what’s next in real-time data and analytics. It’s so nice to have you both here today. Thank you for joining us on “HousingWire Daily.”

Richard Lombardi: Thank you for having us.

Maleesa Smith: Jumping right in, I know you both have extensive experience in data and analytics. Could you introduce yourselves and tell us a bit about how you got to where you are today? Let’s start with you, Michael.

Michael Saccento: Sure. Thanks, Maleesa. And again, thanks for having us today on this podcast. So I’ve been in and out of mortgage and real estate really my entire career. I started out more on the business side of things, working on warehouse lending, providing short term financing to residential mortgage lenders. That evolved into more of a trading and securitization type role at a pretty large bank. And, you know, throughout all those experiences, I’ve always sort of been, you know, working with our systems, whether they’ve been built in-house, or we’ve use third party systems on, you know, figuring out ways to do work more efficiently in those various roles.

And so, starting off on the East Coast and moving out west, I ultimately made my way into consulting. And that evolved me into the product management space. So, I’ve been doing product management now for a little over 15 years, mostly on the B2B side of things. So, providing products to large banking institutions, capital markets, entities, real estate investors. And there’s always been an underlying focus on data and analytics, whether that’s delivering it through software or just being, you know, at the point of curating that data and licensing it out to clients. Here at Black Knight, I’m a senior director of product management. And I focus on our data science platform products, as well as our advisory services capabilities.

Maleesa Smith: That’s great. Richard, could you tell us a little bit about yourself?

Richard Lombardi: Great. Thanks, Maleesa. Glad to do so. I have been in the data world for about 30 years now, a little over. I started my career in financial services, but really started to fall into the data side of financial services in the late ’80s and early ’90s, and have been doing so ever since. Started my career in the credit data side of the business, and spent a number of years working with credit data and with our financial institution clients to help them make better decisions. I manage product lines in the pre-screen and marketing side and the risk management side, and then eventually across a number of different data and analytics type business units within the credit reporting world.

I moved into the property data side of data in the early 2000s, and I’ve never looked back. I’ve worked in the infancy parts of the property data since early 2000s. And, you know, have created a number of different products and data solutions for the companies I’ve worked for. I’ve even been a founder and starter of one of my own data companies. And then about 18 months ago, I joined the Black Knight team as senior vice president of data strategy and innovation. And, you know, excited today to talk about some of the great things we’re doing at Black Night for our clients in the data world.

Maleesa Smith: That’s great. Thank you for that background. Now, we’ve all seen Black Night’s data reported in the media, and there’s no doubt that our listeners are making data-based decisions. So let’s start there. Where does all this data come from?

Richard Lombardi: Wow. That’s a loaded question. We got about five hours to talk about it? So, yeah, all that data comes from lots of different places. Let me get a little more specific for you and informative here for you. So, you know, one of the important things about data and the data that you’re going to use for your business and making decisions is that, you understand at the beginning where that data comes from to begin with. Where is it sourced? Right? So, we have sort of a campaign here at Black Knight, we call it, “Where great data begins,” because Black Knight is really one of the few data collection entities that actually goes directly to the source and collects it.

Many of the other data distributors that you see out there are probably compiling it from companies like Black Knight and others. So, really, you know, creating a differentiator where that data begins is important. So you understand the source of where that data is coming from. And that when you’re collecting data for your business to help make decisions and feed your products and services, that you’re working with a partner that has an expertise in how that data drives operational excellence, right? Black Knight has been a leading provider of real estate origination servicing, secondary marketing technologies to the mortgage and capital markets world for many years.

We offer expertise and firsthand knowledge of how data is used to drive operational excellence. And, you know, really, we’re able to provide our clients more than just data, but powerful insights on optimizing data for your different products and analysis that you’re doing. And you’re going to hear, hopefully on this interview, that, you know, we’re going to show you some of those powerful tools that help you to do those insights. So, we really, you know, help our clients focus on providing that data that they need. So getting it from the right source.

And then, you know, getting a complete dataset. Black Night, we cover 99.9% of the counties in the United States. So we’re a U.S. data provider. But we provide the most current data available, right? Because you’re getting it from the source, you’re getting the most current data available. We apply a very high level of quality control to ensure that we’re cleansing that data. So when we go out to the different counties and reporting agencies within the United States, that we are helping to ensure the quality of that data as we go forward, and that we understand the intricacies related to that data to help our clients better manage and leverage the data they’re getting. We collect a variety of data types, many of it is structured, some of it is unstructured, some of it is shape files or location-driven data.

We do collect more than just public record data. So we collect MLS listing information, a lot of third party data sources that are collected from different government entities or contributory sources. And we even have contributory databases where some of our clients contribute data to us, we compile it with the data that we get from all the other companies just like them, and then we’re able to share that data amongst those contributory entities. So, we’ve really come up with a number of unique ways to gather this data from thousands of different sources and hundreds of different locations to really fill out what is the largest and most robust data set in the United States today, related to property information.

Once you get that data. Having exceptional quality control. We have many types of automated quality control processes to ensure we’re cleansing that data and getting our clients the best data possible. So we go through hundreds of different validation rules, we perform sampling and verification within, not only our county source sites, but our collection partners and keying partners for that data. And then we ensure that we have a robust integration standardization process, so that data can all be linked together with confidence. That data is matched to the proper property, and that our client is going to get the best experience.

And then, lo and behold, the last part of the data journey for us and our clients is around, we stand behind our data. We have a customer-centric support and delivery process that really backs our data, is there for our clients to respond to questions, to help them through their problems. We’ve been working with this data for years. The Black Knight dataset is one of the first collected property datasets. We go back, you know, many, many years of history of data. So we have a lot of experience and expertise that we could share with our clients. And it really helps to make the data experience for our clients optimal.

Maleesa Smith: Now, with so much raw data to sort through, how can Black Knight make sense of it and draw valuable insights?

Michael Saccento: Yeah, that’s a good question, Maleesa. So, I’ll take that one. As Richard highlighted, we have a ton of data at our disposal here at Black Knight. And, you know, that data ranges from the property record data that we go out and curate and put in a database and then offer to our clients. Today, analytics, we develop, which in reality is data in and of itself. Take an Automated Valuation Model, which is really a derivative of multiple data sets, where we estimate the fair market value of a home using a model to deliver on that value. And so, you know, on a weekly basis, Black Knight will run the entire universe of properties through that AVM or multiple AVMs, and basically create another data point.

We have an additional data point that expresses the value of that property that we estimate it to be. And so, you know, through those different data sets, we have teams and technology behind the managing of these data and analytics products. Some of that has even been created through acquisitions that we’ve made from other companies. And, you know, over time, what we realized is that, some of the greatest insights and the most interesting things you can discover when you use all this data is when you combine it together. And the reality that we came to is that, well, you know, while we have all this data, there really wasn’t a single source of truth, you know, within Black Knight where someone could go in and analyze these multiple data sets in a single environment.

And it’s not too different than the problems that some of our clients have. I mean, if you go from, you know, all the different clients that we serve today, they’re all at various stages of making their data useful by investing money and bringing it all together, and then making it accessible to the various consumers throughout our organization. So to solve that problem here at Black Knight, about four or five years ago, we ultimately built a platform. And that became what we call Rapid Analytics Platform, or RAP for short. And what RAP is, is a platform where on a daily, weekly, monthly basis, depending on the update frequency of the dataset, we ingest all that data into a single cloud-based environment.

And then on top of that environment, we have a analytic studio that allows, you know, internal subject matter experts of this data within Black Knight to use SQL, Python, R, Scala, various coding languages, to go out and create analytics, and to help them sculpt the data and understand different cuts of the data. That tool became so useful to us here at Black Knight that we ultimately sort of turned the page and said, “Well, you know, wouldn’t it be interesting if we made this platform available to our customers?” And that’s just what we did. And so, again, about three, four years ago, Rapid Analytics Platform became one of the primary ways that we deliver data to the market. And so now we’re starting to see, you know, a lot of value not only from Black Knight using our platform, but from our customers themselves.

Maleesa Smith: I’d love to dive into that platform a little bit more. How does it play into Black Knight’s larger data strategy?

Richard Lombardi: It’s interesting. For years and years, the data business has been a push business. Companies would push data out to you, they back up the truck and dump a bunch of data on you and say, “Good luck, hope it all works for you.” What Black Knight is doing here is really sort of trend setting. And you’re starting to see the growth from the things that we’ve done here. And the fact that, not only do we have a tremendous amount of data to provide to you, we don’t just dump it on you and let you go figure it out, right? The Rapid Analytics Platform that Mike just talked about is one great example of that. And that’s part of how that fits into our overall strategy of not just being a data vendor, but being a business partner for our clients.

And the Rapid Analytics Platform is a great example of, not only can you get the data, ingest the data within your organization, build it into your products, and analytics, and solutions, and models, but we also provide you tools from which you can interpret the data, you can analyze the data, you can bring in your own data sets and interpret and analyze the data. You could bring in outside data sets. And what’s really unique about this is, we’re not only the data provider, but we’re the tool that comes along with it. All of our data at Black Knight is linked together through at Black Knight. So we’ve done all that work for you.

So, when we bring in the various datasets, whether they’re forbearance data, or boundary solutions, or property data, or derive data, like Mike was talking about, calculated field, things like that, it’s all tied together and mashed together for you. And it allows you to then use it in these tools, whether it’s a Rapid Analytics Platform that provides you a very powerful tool to analyze and use the data, or one of the other platforms from which our data is throughput to our clients. Whether it’s our Site X Platform, where we pass our data as reports to our clients in a human readable format. So they could log in, look up and get information, get access to information. Whether it’s our API deliveries.

Whether we’re doing custom work for you, and match and appends, where you provide us information, we append our data, and return it back to you. Or some of our other real estate-based platforms that service the title, and the real estate, and MLS markets, and our mortgage platform. So, you know, how this plays into our strategy is, we just don’t dump a bunch of data on you, we really are not a data vendor, we’re a data partner. And as a data partner, I don’t use that lightly. We stand behind our data, we service our clients, we are generally the source of origination of the data, and we’re the experts in the data. And by doing so, our clients gain tremendous amount of value from using and working with us for their data needs.

Michael Saccento: Yeah, Richard, those are great points. I can maybe add to that a little bit. So I’ve sort of seen both sides of it. I’ve seen the side where, as Richard mentioned, you know, you sort of back up the dump truck, and FTP access the data to a client. They’re responsible for finding a place to store it, to organize it before it even gets downstream to the ultimate consumers of that data set.

And, you know, what I found in that model from firsthand experience is that, you know, ultimately, we’re the experts of the data, right? Meaning Black Knight is the experts of our property record data, of our mortgage performance data. We had an earlier podcast on the McDash data senate forbearance data that we put together, as well as some of the rate lock data. And so, you know, when our clients are ultimately trying to use that data, you know, at least half of the things they’re doing with it are pretty common across multiple clients. Meaning, you know, whether it’s compliance, or creating marketing lists, or, you know, trying to understand the share of single family detached properties in a certain geography. Those are pretty common questions that our clients are looking to answer with our data. And so it really doesn’t make sense for them to reinvent the wheel.

And so when they would go in and actually have to build queries or more analytics around that data, you end up in a situation where there’s a lot of back and forth over the phone or via email on, well, how do you do this? And which field is best for this? And are there any pitfalls with this field? Right? And so, it’s a pretty inefficient way to share our expertise with our clients when they’re trying to get up and running using our data sets. And so the paradigm shift with Rapid Analytics Platform is that, we’re in this platform, building much of these queries and analytics ourselves in the platform. And when a client comes to us and actually asks a question about, you know, what can they do and how should they do it, you know, it’s often us literally just sharing code out to that client on how to get there.

Ultimately, we’re in the data business here. We build proprietary analytics well. But if you’re just trying to, you know, sum up something across multiple different geographies, and come up with a metric that makes sense, we don’t feel like that’s really what we’re selling. And so, by providing that directly to our customers in the form and a very transparent method in RAP, we call that a notebook, and a notebook just houses a bunch of code that will query the data and summarize it in various fashions. That has become a very, you know, I think, efficient way to engage our customers as they look to utilize our data as quickly and efficiently as possible. And so that’s been a huge benefit of the platform.

And, you know, what they’re using it for today is to understand mortgage performance. If they’re either holding residential mortgages on balance sheet, or they’re trading mortgage backed securities or home loans using our McDash data to understand prepayment speeds, and the impact of forbearance, that has become, you know, a major use of the platform. And again, you know, when they’re going in to try and understand or calculate those prepayment speeds, you know, we have those types of analytics already pre-canned in the platform that we can offer to our clients.

At the same time they can customize, right? So it’s a very open, sort of…it’s a sandbox, if you will. In that, you know, you can code in any shape or form that you want against the datasets. So, to the extent they want to customize something we already did, they’re able to do that as well, and that makes them, you know, more competitive in the market, depending on what they’re doing. We have clients who work on retention strategies, trying to understand, you know, when the portfolio is running off, you know, where are these loans, these refinances going to? If they’re not getting that sale and purchase transaction with that consumer, who’s actually the lender out there who is providing that financing to that consumer that they once had? That’s being done via the platform. They can create marketing lists from our property record data.

So, because all the data across our entire segment is on the platform, pretty much every single application of the data or problem that our client to solve is, you know, is something they can do on the platform. And with our advisory team here, working in the same environment, it’s very easy for us to get in there and help our customers answer those questions as quickly as possible. So, again, that’s been a great benefit of the platform. And so, to answer this question, why would you build this thing when there are these other, you know, data science platforms out there? It’s because it’s become a really great medium for us to engage our customers.

Richard Lombardi: And, Michael, I would just add to that, real quick. I think it’s an important distinction. Because there are other platforms out there, generic platforms, that are available for you to load data onto and do some things. It doesn’t necessarily come with, you know, the data experts behind the tool that are the people behind the data. So, you know, those platforms, although they may be very efficient, do not provide the expertise, and the data is not built for that platform. So, that’s what makes the Rapid Analytics Black Knight data solution so special, is that it’s very unique in the industry.

Michael Saccento: Absolutely. Couldn’t agree more.

Maleesa Smith: And that brings up an important point. Over the last couple of years, Black Knight has been innovating more and more around near real-time data. Can you give our listeners an idea of what you’re doing now and how that’s changing the landscape?

Richard Lombardi: Yeah, yeah. Maleesa, this is Richard. I’ll start with that one. So, our clients are demanding faster. They want it sooner. And Black Knight is really set up to address that. So, we were just talking about the Rapid Analytics Platform. There is a great example of how we get the data in our client’s hands faster by a cloud-based tool like Rapid Analytics that has the data in there. Our clients are not waiting for updates to be sent via FTP, or they’re not having to go pull that data and inquire on it. We’re maintaining that updated file within the Rapid Analytics Platform. So when they’re doing their work within that platform, they’re getting the most updated data possible.

And because, like we talked about earlier, Black Knight is sort of where the great data begins, right? We’re going right to the source. That data is not passing through three and four different companies and vendors and processes before it gets to you as the end user of the data, in this case, the client. So it’s really going from the source to the client, with Black Knight making that happen, okay? So we cut out a lot of the middlemen along the way, which makes it faster. And we’re starting to see a desire for our clients to get data faster.

So a lot of the new products and services that you’re seeing, and solutions that we’re building, are based on real-time data sources. A great example is, we’ve launched recently our early warning suite, or our real-time disaster alerts. As a wildfire, or a tornado, or hurricane, or some sort of natural disaster is occurring, we are working behind the scenes to capture that information and to identify, at the property level, the properties that are impacted by that natural hazard. So if it’s a wildfire coming through, as that wildfire is happening, we’re reporting back to our clients within the next 24 to 48 hours, which properties were in the line path of that wildfire, or hurricane, or tornado.

Why that’s important is because, our clients, primarily lenders, but lots of different clients, can review and see what the impact to their portfolio could be, depending on that disaster. Apply a bunch of other Black Knight information and calculations like valuation to get a scope of what the impact could be on their portfolio.

And what’s so important about this real-time, as the disaster is occurring is, traditionally, for years and years, the only way to get that information has been through federal government reporting, which is usually at the county level. It’s not specified at the property level. So you have really no way of tying it back to a specific property, if that property was impacted or not. So, these are some of the things that, having the RAP solution, having the data that we have, being the source of the data and going directly to the source of the data has allowed us to really sort of lead the market in more real-time response to our clients’ needs.

Maleesa Smith: Well, Richard, Michael, it’s been so great to hear more about your thoughts on the future of real-time data and analytics. And with that, I’d like to say thank you to you both for joining us on “HousingWire Daily” and sharing your insights. Listeners, we’ll see you back here tomorrow.