The Money Mondays: Episode 103 - AI is REVOLUTIONIZING Financial Services Forever with Pavan Agarwal 🤖
Release Date: January 6, 2025
Host: Dan Fleyshman
Introduction
In Episode 103 of "The Money Mondays," host Dan Fleyshman welcomes Pavan Agarwal, a trailblazer in both the mortgage and artificial intelligence (AI) sectors. As the youngest founder of a publicly traded company and an angel investor in 43 companies, Dan brings a wealth of experience to his conversations. This episode delves deep into how AI is transforming financial services, particularly in the mortgage industry, and explores Pavan's entrepreneurial journey, investment strategies, and philanthropic endeavors.
Guest Introduction: Pavan Agarwal's Journey
[02:24] Pavan Agarwal (Pavan)
"Immigrant came here when I was little and my father was in real estate, so we bought and sold real estate. I cleaned the toilets, painted the house, mowed the lawn, did everything back when we were kids."
Pavan begins by sharing his humble beginnings as an immigrant, working alongside his father in the real estate business. His early exposure to the industry laid the foundation for his future ventures. At just 11 years old, Pavan was tasked with building the technology for his father's mortgage company, showcasing his early aptitude for math and algorithmic thinking. This skill set naturally led him to the realm of AI, where pattern recognition is paramount.
The Evolution of AI in Financial Services
[07:38] Dan Fleyshman (Dan)
"Why is the mortgage space important and how do loan officers, are they making money out there?"
Pavan elucidates the critical role of the mortgage industry and the challenges faced by loan officers, especially in fluctuating economic climates. He highlights the boom period from 2010 to 2020, where low-interest rates and a booming real estate market made it lucrative for loan officers. However, the sudden downturn during the COVID-19 pandemic exposed the industry's vulnerabilities, emphasizing the need for adaptability and resilience.
Angel AI: Revolutionizing Mortgages
[23:54] Dan
"On your hat and on your shirt it says angel AI. Please explain what is that company?"
[24:49] Pavan
"Angel AI is very simple. You simply chat with it, like chatting on WhatsApp with your best friend. Except you chat to Angel through the Angel AI app."
Angel AI, Pavan's brainchild, is an innovative platform that leverages AI to streamline the mortgage approval process. Designed to interact conversationally, Angel AI acts as a personal financial assistant, handling tasks such as credit repair and mortgage approvals with unprecedented accuracy and efficiency. Pavan emphasizes the platform's unique selling proposition: a warranty-backed approval system that guarantees loan amounts, mitigating the common anxieties associated with financial transactions.
Notable Quote:
[27:15] Pavan
"If Angel hallucinated and said here's $100 million, I would write you a check. We’re the only financial services company that can issue a warranty like that."
This assurance sets Angel AI apart from traditional financial institutions, offering a safety net that instills confidence in users.
Impact on Underrepresented Communities
Pavan discusses the societal implications of Angel AI, particularly its potential to democratize access to financial services. By providing warranted mortgage approvals without traditional contingencies, Angel AI opens doors for historically marginalized groups, including Black borrowers, veterans, and Hispanic communities. The platform's data reveals a significant improvement in approval rates across these demographics, bridging the gap that has long plagued the housing market.
Notable Statistics:
- Black Borrowers: Approval rates improved from 1 in 3 to 1 in 5.
- White Borrowers: Maintained a consistent approval rate of 1 in 5.
Investing Philosophy: Real Estate and Beyond
[20:58] Pavan
"I look at minimum cap rate of 10%. If I don't get 10 cap rate, I'm not touching it."
Pavan's investment strategy is methodical and data-driven. In real estate, he adheres to a stringent criterion, ensuring a minimum capitalization rate (cap rate) of 10% to mitigate risks. This disciplined approach extends beyond real estate to other investment avenues, where he prioritizes control and intrinsic value over speculative gains. Pavan underscores the importance of emotional detachment in investment decisions, cautioning against being swayed by market excitement without substantive analysis.
AI's Resurgence and Market Investment
[10:26] Dan
"Why do you think so much money, time, and energy is finally going into AI this year?"
The conversation shifts to the AI industry's recent surge in popularity and investment. Pavan attributes this renaissance to foundational research breakthroughs, particularly Google's 2015 paper, "Attention is All You Need," which revolutionized language processing and made AI more scalable and efficient. The subsequent development of models like ChatGPT 3.0 brought AI into mainstream consciousness, facilitating widespread adoption and substantial venture capital investments.
Philanthropy: Integrating Charity into Business
[32:25] Pavan
"Philanthropy should be a part of everything we do every single day."
Philanthropy is not just an add-on but a core component of Pavan's business ethos. Through Angel AI, he offers services like free credit repair and low-interest payday loans, aiming to uplift individuals from financial instability without immediate financial gain. This altruistic approach fosters long-term relationships and builds a sustainable ecosystem that benefits both the company and its users.
Key Initiatives:
- Free Credit Repair: Eliminates the high costs typically associated with credit repair services.
- Low-Interest Payday Loans: Provides affordable financial assistance, contrasting sharply with the predatory rates found elsewhere.
Future Outlook and Legacy
[38:38] Dan
"100 years from now, Angel AI Mortgage company become worth billions and billions of dollars. What percentage do you leave to your children?"
Pavan reflects on the legacy he aims to leave rather than specific financial inheritances. Emphasizing stewardship, he believes in passing on the responsibility to capable individuals who can sustain and grow the business while adhering to its foundational principles of helping others. This forward-thinking mindset ensures that Angel AI remains a force for good long into the future.
Conclusion
Pavan Agarwal's insights offer a compelling narrative on the intersection of AI and financial services, underscored by a commitment to ethical business practices and societal betterment. "The Money Mondays" episode serves as both an educational resource and an inspirational blueprint for aspiring entrepreneurs and investors. By integrating advanced technology with a philanthropic vision, Pavan exemplifies how businesses can thrive while making a meaningful impact on the world.
Final Quote:
[40:24] Pavan
"Whatever you have doesn't belong to you. It belongs to God. We're just stewards."
Where to Find More
To explore Angel AI and engage with Pavan Agarwal's innovative solutions:
- Website: angelai.com
- Connect with Pavan: Use the Angel AI app to send a message directly to Pavan by asking, "connect me with Pavan."
Join the Conversation:
Engage with your community by discussing the financial insights shared in this episode. Understanding and managing finances is essential, and platforms like Angel AI are making it more accessible than ever.
Thank you for tuning into "The Money Mondays." Stay informed, invest wisely, and give back to your community.