The Borrower’s Intelligence Platform is ushering in a new era in lending, where data-driven insights are at the forefront of decision-making. This technology not only benefits lenders by reducing risk and improving efficiency but also empowers borrowers by expanding access to credit and providing more personalized loan options. As the lending industry continues to evolve, BIP will play a crucial role in shaping its future. It is a powerful tool that combines the best of data analytics and lending practices to create a win-win situation for both lenders and borrowers. Richard Harris of Trust Engine is here with us today to share how their BIP solution helps lenders get a superior funnel performance and monitors their database to anticipate borrowers’ needs.
Borrower Intelligence Platform: Opportunities and understanding borrowers’ needs with Richard Harris of Trust Engine
Listeners, we’re in for a real treat today, because we have Richard Harris joining us today who is the CEO of a trust engine. And we’re very excited to have him here. And the reason is, is we’re looking for a fresh new perspective, an outside view of the mortgage industry. And anytime we can gain that from someone who has a lot of experience outside of our industry, and they bring that experience into our industry, that is a winner. And we all could look at our industry in a fresh new way. So Richard, welcome to the podcast.
David, thank you very much for having me on. I’m excited to be here.
Dave Savage has told me so much about you. David Savage is a good friend. I’ve been on his podcast he’s been in mind, we just keep interviewing each other for such great content. And of course, the private equity group that you represent or went to work for is what acquired both mortgage coach as well as sales boomerang and you’re now the CEO by the rebranded trust engine. And so we’re really excited to get your perspective on it. But let’s let our listeners first of all get to know you a little bit, Richard, introduce yourself, your background and how you got to where you’re at today, my friend.
Okay, man, this could be a long story, but I’ll keep it short. And you can dive into the areas that you want. But I actually started off life as an attorney very briefly. My father was a judge. Yeah. And so he was like, Yeah, you got to go to law school. It was horrible for me, just the worst possible fit for my background. And I was always a tech guy before the internet even existed, I was really interested in technology and kind of the bulletin boards that pre existed the internet. And so I made a shift in my career after only 18 months as a lawyer, and got a scholarship to go to business school. And then I emerged from business school, my first job was really focused on early stage technology investing. And it couldn’t have been a better time to do it, because it was right before the internet bubble took off. So this was 1997, and had some really big successes. And I thought I was brilliant, right, I thought I was super smart. And then the internet bubble burst. And that’s where I got the scars on my back. And I spent another decade or so in investing both in venture capital as well as private equity. And it was a mentor of mine at a large venture capital firm called New Enterprise associates that said, Rich, when you’re involved in these companies, and you’re taking and I take it on some temporary operating roles. When you do that there’s like a spark in your eye and a spring in your step. And you should come and actually take an operating role with one of our companies. And he was the first person that recruited me as CEO of a company called Add This.
Repeat that name again, it was what?
Add This. That’s right, Add This and so Add This was a very interesting company, we were the first company to really develop these tools for sharing and liking and giving personalized content recommendations. And you may have seen the orange plus sign around the entire internet, we had our tools on 15 million websites around the internet. Just amazing. So we built that company. And there was a lot of blood, sweat and tears there. But we built that company and sold it to Oracle, very good outcome. And then I ran Oracle Data class international operations for a while, which was a really interesting experience. And then the private equity firm that I’m working with today called LOR partners, they actually recruited me from Oracle to run a company called SparkPost, which was the largest sender of commercial email in the world. And we supported all of the big email marketing platforms. And we build that company we sold it was a really successful exit. And then I partnered with LOR to join trust engine. So I find myself all of a sudden now 18 months into mortgage and really enjoying it and dealing with the challenges.
Yeah, I’m going to spend some time what you are bringing from your previous successes into the industry, but I want to go in first of all, I want to touch on the fact that you have a law degree. I probably agree with you that it would probably not be my first choice to do as a career. But I think what a wonderful background I’ve been a business owner of many businesses now. And there’s so many times I wished I had law degree training, and maybe gone to be a lawyer for a period of time on a contract law, because there’s so much contract law that goes into virtually everything we do. And there is a replug and want to put a plugin for anyone who is looking at or sees himself owning a business at some point in time, take the time to get some legal training, because it will not it’ll serve you well, you’ll never be disappointed may not be the most enjoyable part of the journey of the education. But man, what a practical background, especially as you look at the various options, it speak to that just briefly, have you found that heard agree to be really give you a unique advantage and nd as you look at various opportunities?
I have, I was bored out of my mind in law school to try to be truthful about it. That said, it has been really valuable for me, I think there’s two big things. Number one, law in some ways people get very nervous about reading contracts and the threat of litigation and having that law degree, it removes that fear, I have no issue, reading a contract negotiating a contract, even down to the details. That’s one side. The other side is, and you may find this today, and folks that you interact with a lot of people can’t write, they can’t write. And law really teaches you how to write in a concise manner in a clear manner. And that is valuable for anything you do absolutely anything. So I agree, I completely is.
I could spend a lot of time on this, I do legal expert witness work on the side as to keep my skills sharp and also find out what’s going on. And if something went bad, you find out about it when there’s a lawsuit going on. And you get caught up reading all the details of why it is so important to your point about contract language that’s written well written clearly is such an advantage in a lawsuit. And sometimes we think we’re writing things clearly. And we’re speaking clearly. But when it gets challenged in court, you realize, oh, my gosh, I didn’t realize or that many potential meanings or interpretations of what I wrote or what I said. So I think it’s a really good point. I don’t want to spend a lot of time there. But I just want to encourage anyone who plans, has plans, or have a desire in your heart to become a business owner or on his senior executive level, man, do what you can to get as much legal training as you can may not have to go get a full law degree, but get some background. And it’s a really good point. Let’s talk a little bit about your perspective, you have now a fresh perspective, you’ve been in this for 18 months, you’ve been looking at the mortgage industry, and working in the mortgage industry, what is the thing that you find most unique? What’s the most, I would almost say shocking or surprising revelation that’s come to you as you started in our space.
Wow. Number one has to be the sensitivity of the business to interest rate changes, right? So I knew coming into this business that it was highly sensitive to interest rate changes. And I knew we were coming into a rising interest rate environment, I don’t think I anticipated quite the impact that it had on a lot of lenders that we were working with. And whether it’s companies completely going out of business, forcing them into merger activity, or dramatic changes, like really dramatic changes in their business. I’ve been through many different economic downturns in my career, internet bubble burst, 2009 financial crisis, you name it, even in the more recent tech downturn, and this kind of blows it away. So it’s just a very volatile industry, relative to what’s going on with the interest rate environment. And I don’t think you really fully understand that. So you’re in.
Yeah, it’s a good observation. And it’s a little bit of a surprising observation as well, because we know how volatile tech can be. I don’t have a great idea, have it launched and have that idea taken out or have the rug pulled out from it seems like in a matter of a year or two. And so there can be a lot of volatility, but this one is very pronounced. Now, to be honest with you, Richard, what’s so unique about this one is I’ve been in this industry for 50 years, nothing is quite prepared, as I’m not sure anyone can be prepared for what we’ve just gone through is when the Fed artificially stimulated interest rates during COVID. And then we went into the one of the lowest rate cycles, and only to be just a whipsawed into what felt like the highest rate cycle not at all close to highest. But it was very painful. What are some of the observations you’ve seen other companies that you have seen are you think have their greatest chance of success? Again, looking at it from as an outsider, what would you say in the mortgage companies that have the best chance of success?
I think there’s a few things I’ve observed working with some of our customers working with some of our partners and one of the big things is that the industry in general moves very slowly. And there’s a number of reasons for that. So you’ve got the regulatory issue, which causes it to move slowly. But then I think there’s also just this issue particularly on the retail side, having to work with All of these individual LOs, who tend to have extremely high influence on major decision making at these lenders, and I really think that stagnates innovation. It stagnates change, it prevents these companies from moving quickly. And speed is such an important factor for success and embracing innovation. And then there’s also this issue of, I would almost say, its bureaucracy created in reverse, right, because typically you think of bureaucracy created from this large, monolithic organization. But it’s actually the reverse where you have a bunch of LOs, that all want to use their own tech platform creates massive complexity and problems. That’s just a few of the things that I’ve seen in this industry.
I think you’re hitting on some really interesting points. And when you look at complexity from where it comes, as you are inside of Oracle, that is a huge organization. And you think that you would have gotten used to the political environment that can be inside of there. But this one is unique, because of the agencies the regulatory pressure that’s honest from the outside, it is very unique. And then you have the entrepreneurial bent within the loan officer ranks that are saying, I don’t want to use this, I want to use this CRM for this platform. But you are sitting on top of some really innovative companies a sales Boomerang, I love Alex and the whole group and what they started with there, when he brought that out, it was like, wow, this is so exciting to what this could do for the insurance industry. Now it’s lived its first early lifecycle, we’re gonna talk about sales coach, and how they all fit together, where they want to get into how you see it fitting and kind of some strategies and why people should be paying attention to these to trust engine and the combined efforts. But looking just at the sales boomerang aspect, that has initial lifecycle and it’s now growing in a way under your leadership, what would you say is the evolution that we can anticipate seeing not only what was sales boomerang now trust engine, but also generally what that service provides?
Sure. So Sales Boomerang provided a very valuable service. And that is really providing data or triggers to people, and to get them to understand what’s going on with their customers. And then for example, if someone actually has a hard credit, pull one of your borrowers or prospective borrowers, then you could call them up and say, Hey, I understand you’re shopping for a loan. And let me talk to you about that. And here’s why you should either stay with me continue to do business with me, or why you should do business with me instead of someone else. And that’s a singular data point. And that’s valuable. But there’s no context around that. What’s actually going on the borrowers. What are the borrower’s goals? How do they want to approach they’re in the next phase of their life, and what’s going to get them to financial freedom, for example, which is something that Dave savage talks about a lot. What we’re trying to do is to take this from singular data points without any context, and give the full story, the full picture and get predicted not wait until the last minute, the borrower is already out there shopping, but really give the lender an understanding of what’s going on with their customers and their prospects, so that they can engage with them and have that advice based conversation and become a trusted adviser, and do repeat business with these folks over time. And this is, by the way, something that we’ve seen in other industries as well. And it absolutely works. And this was an evolution that occurred in several other industries before it occurred here. And I could certainly talk about,
I would like to get your perspective on what we’re really talking about what I got excited about is business intelligence, we have not focused enough in our industry on the business intelligence, really consumer intelligence. That’s where we get our business from the consumer, and getting that intelligence. Let’s contrast looking at how important business intelligence is outside of the mortgage industry, if you could bring your experience in. And it seems to me my impression is Richard, that we have a long ways to go to develop really meaningful business intelligence. And that’s one of the reasons I’m excited about LOR is the investment bringing you in and combining of these companies and the next chapters that lie ahead.
So intelligence is certainly important. And that’s one piece of it. And I think that what we’ve seen in other industries and in the mortgage industry is that people have done a pretty good job collecting a bunch of data, providing more intelligence, that’s for sure. For example, many mortgage lenders use a CRM, and the CRM does a pretty good job in aggregating information about your customers and providing you some intelligence. But then the question is, what do you do with it? How do you use it to actually impact your business and help you achieve your business goals? And then how easy and quickly can you take advantage of that intelligence and that was the same Evolution that we saw, for example, if you take ecommerce, for example, so ecommerce, all those e commerce companies use CRMs, just like they do in the mortgage industry, to essentially aggregate data about their customers. But what they found is that it was too slow. When someone hits your website, and they’re searching for a belt, you need to know right away, whether or not they’ve bought a pair of jeans from you in the past, and you need to know right away, what other things they’ve been looking at, you need to know as much as you possibly can about that customer. But then on top of it, you need to act on it in seconds before they leave your website seconds, how do you actually take advantage of right away. And so that’s where you saw the advent of new platforms called performance marketing platforms that specialize in bringing that data in and acting on it literally instantaneously. And that’s exactly what we’re bringing to the mortgage industry. So companies send these wrong customers into prior lives. So customers like Braze, Klavio, Bluecore specializes in Ecommerce, utterable, you may or may not have heard of some of these companies. But these were over the last 10 years, the performance marketing platforms that grew up alongside Salesforce and Oracle and Adobe, the legacy CRMs. They were very good platforms, Adobe, Oracle and Salesforce and Microsoft. But they were not built for very quickly. actioning intelligence and high flexibility and speed.
Yeah. So when it comes to performance, marketing systems and platforms like that, I’m not sure our industry has that in their grid in the fact that you have that I think this is one of the things that’s so exciting about, we need to be paid attention to what you’re going to be doing, that are a trust engine. So what does performance marketing systems platforms do give us more of a context of that to help those that do not understand that? I think I do, but I’m not even sure that I do.
That’s no problem. So performance marketing really is about number one, understanding your customer. So that’s collecting data from various different sources, and really understanding your customer, but then being able to activate it very rapidly. And then the third piece is once you’ve activated, so take action on reach out to the customer with a very personalized offer at the exact right time that they’re in market for a loan or about to be in market for and then be able to have, say an advice-based conversation because your information about them. The last piece then is to really bring that information back of what worked and what didn’t in an automated way and enhance your data and optimize your algorithms. So that you have this constant loop going an automated loop that optimizes and improves performance over time. And the whole idea is that this has to be very automated, right? If you’ve got a situation, typically a CRM, for example, you have data about your customer. And you may say, well, I want to create a nurture campaign to stay in front of them. Often, it’s very complicated to set that campaign up. Once you get it set up, you may not want to touch it for six months, maybe for a year. Maybe you’re changing every month, you’d be one of the more advanced lenders out there today. performance marketing automates that customer journey, how you’re reaching out to them every single time automatically. And immediately.
What is the most effective way to do that? And we’ve seen these bots that’s been so popular and prevalent on so many websites, is it in a transaction as personal as an important and pivotal and monumental is I’m trying to find the right word. Their monumental is probably the best word for most consumers is the electronic communication about that if you’re buying a refrigerator or buying something online, that may be one thing. But you’re talking about the mortgage. This is where the baby sleep, and then you’re financing on your primary residence. Are you finding that there’s anything that we need to be doing differently as it relates to it being a mortgage versus a consumer product?
Yes. So you’re hitting on what we think is our primary differentiator and why we’re doing this in mortgage. So the performance marketing platforms that I talked about in other industries, ecommerce, for example, are for small decisions, buying a belt, buying a pair of jeans, right? Maybe you can even get up to the point where you’re buying a car online without talking to someone but that’s unusual. Actually. Tesla is doing that today, a few other companies but for the most part, these are smaller decisions that don’t impact your life as much as a house. which is typically your largest financial decision. And so what we’re really trying to do is to take the leading edge innovations that we saw in performance marketing for these small decisions, which really worked. And how do you apply that to big financial decisions, like mortgage or potentially in the future wealth advisory or insurance and some of these different things. We’re starting with mortgage. And so what we found is there has to be a really interesting combination between digital automated communication, and in person discussion, and conversation. And so how do you meld the two? And that’s exactly what we’re doing. And this is not a simple challenge to really untangle here, but this is exactly what we’re talking about.
About digital automate, I’ve just been, you know, digital automated communication. What does that look like? Where’s that going? What’s the chat GPT, we’re seeing so many advances in how we can community enhancing our ability to communicate improving our writing skills, going back to what you’re talking about, yeah, to learn how to write. But in your mind, cutting edge when it comes to digital automation communication.
There’s cutting edge in mortgage, which is probably 10 to 15 years behind cutting edge, and other industries.
And it’s an indictment on it’s true, we do not innovate near enough. But those that can innovate and use the tools such as what you’re bringing through trust engine are going to have a decided advantage. And I’m gonna give you some examples, right? That hit me.
I didn’t mean to interrupt you look, the most advanced industries. And I’m sure you’ve had this conversation with friends and family where they’re like, Alexa was listening to me. I know Alexa is listening to me, because I was talking the other day about, I don’t know, buying a new computer, and I just got an advertisement. I haven’t even started searching for it. How is that even possible? And what’s happening? And you mentioned Chat GPT is the most sophisticated companies in Ecommerce like Amazon is a great example. They are combining everything you know about which is a lot, right. They know what you’re looking for online, what you’ve purchased in the past, right? They probably know about your family, you’ve done family on Amazon. So they probably know your demographics. It’s incredible what they know about you. And they’re able to use artificial intelligence to predict then what you are likely to do next. And it’s gotten so good that people think that Amazon is using Alexa to listen in, but they’re not. They’re just using artificial intelligence is.
So powerful. This is a question that a lot of us have been in the industry for a long time, Richard have ever considered the fact that an Amazon could come into our industry and absolutely turn it up on its ear, because they have all this knowledge and they would have such a decided advantage. Why is it that you think that companies like Amazon, or Microsoft or any of the others have not come in successfully in the mortgage industry? I think some of them are tried different ways. But why there’s a reason they haven’t? And is that something that you think might change?
I think one of the big reasons is that I’ve learned over the last 18 months, mortgages have very specific industry with a lot of specific ways of doing business. It’s highly regulated, it’s highly volatile impact by the interest rate environment. And so I think a lot of those factors make it such that people are hesitant to just jump into it now company like Amazon doesn’t seem scared of going into any industry. They’re in the grocery industry. They’re in health insurance, prescription, you name it, if they decide to go in, they may come in, you’ve already got rocket, right, which is taking an Amazon like approach. And they’ve gone from nothing over the last what decade or so to become the dominant lender in the United States. And I think that’s a really good example. And then you also have UWM, who has very much through investment in technology and their tech platform that they’re providing to brokers, essentially for free, become dominant in the wholesale market. Right. And the broker market, I think you have seen some of it. And if Amazon was going to do it, they probably would buy UWM or rocket.
They have the capital to do it. That would make sense. Yeah. Oh, absolutely. So I’m sorry, I’m gonna go two different directions that we have the two ways. We have the relationships we have through the mortgage servicing rights we refer to as MSRs. We have our investment, we’ve made a loan, we retain the servicing, many of us retained servicing. And so it’s the retention of the consumer that we have. And then there’s also originating new loans. So these are two directions I want to go and I specifically see the value of what your background is and what you’re talking about with this performance based marketing. I really see as being able to get to know servicing retention is a huge one, we’ve been originating loans now at a higher interest rate. So we have the new book of business on at a higher rate, we have the old book of business that was originated when interest rates were back in the threes, even down in the low or the high twos. But that is at risk of being run off or paid off, either through life events or interest rates are now falling so we can refinance that previously retained book of business that was at a higher rate. This seems to be what you’re talking about right? Here seems to be a real advantage for retention. And this is something that the mortgage industry has done, generally very poorly with the exception of our freedom mortgage, or some of the larger mortgage companies that can go in. And I’m really interested in your take on this. And if you have any specific initiatives to help those that own an MSR I’m thinking several times, my clients that own MSR significant MSR investment, and they are really wanting to do a better job of retaining it, how can trust engine help them.
You’re hitting on exactly what we’re going after here. And I think whether it’s retention, and I also want to talk about prospects, because I think prospects are probably unfairly ignored in this industry. And that’s one thing that I’ve seen, and, and particularly in this purchase market, we’re seeing the whole prospect database, which I could talk about as being extremely high ROI and very effective. But on the retention side, it’s similar to what we’re doing on the prospect side, quite honestly. But it’s a question of understanding what is going on in their life. I think in the mortgage industry, what we’ve seen is that people who own servicing portfolios, their idea of understanding their borrower is literally setting up a prospect trigger, so that if there’s a mortgage inquiry, alert, then they call them and they say, Hey, you should stick with me, I can give you a better rate, that time has passed. And that time has really passed, thank you for saying, if you want to be a leader, if you want to be an innovator. And by the way, I’ve talked to the folks at Freedom, and they have an entire data science team doing this. So if you’re a servicer, and you’re not trying to get more predictive, if you’re not trying to understand what’s going on in your borrowers lives, before they take an action, you are not going to survive, you’re not going to survive. So you might survive for a while. But eventually your business is going to go away. We run these analyses for a number of our customers. And we’ve seen that a lot of the best lenders are retaining only 20% of the loans that current borrowers go out and do one and five, that would be good. And in my view, that’s crazy. You should be at 90%, why is it not at 90%? Right?
I’ve already got a relationship with him here, we have a relationship, but we let that relationship going. I think this comes into relationship nurturing. And one of the things I’m so fascinated by is what technology can do without the human factor to continue to nurture that relationship that you were pulling on your background from your previous life outside the mortgage industry.
Yes, and this is a perfect analogy, right. But in the same evolution occurred in E commerce that’s happening now in mortgage, I’ll start by talking about a customer forum that we had. And I remember not going to, of course, say who this was. But I talked to one of the lenders. And he said to me, Hey, rich, if I can talk to one of my borrowers on their birthday, I’m gonna have them as a borrower for life. And I said, really, your borrower actually wants to talk to their lender on their birthday. That’s the person they want to talk to. And that really matters that they got to Happy Birthday, who cares? Who cares. And the same evolution occurred in Ecommerce, right? And ecommerce, it started off, oh, we’ve just got to stay in front of our customer all the time, right? If they bought a belt from me, I’m going to just hammer them with emails, and every month and every single quarter, I’m going to send them more offers for belts, and I’m going to keep telling them the new belts that came out on this fashionable one, and this that and the other. And what we realized in Ecommerce many years ago, is that just creates customers that don’t want to do business with you anymore. They’re just annoyed, they’re already have a belt. They don’t want to hear about 20 More belts, right? They’re sick of it. And so what you need to do is if you don’t have anything relevant to say, don’t say anything at all. And when you do have something relevant that actually will enhance the life of the person ask that you got to put yourself in the shoes of your customer, what’s going to actually be relevant, interesting, and going to actually help them achieve their goals help them solve their problem. If your offer to them doesn’t do that, don’t do it. Just don’t do it and sending a happy birthday message, I don’t think that solves any big problem, right? I agree. So we got a shift in the mortgage industry to do exactly what they’re doing in Ecommerce and Ecommerce, it goes back to the example of Amazon. But I can give you an example of 10 or 15 other ecommerce brands that are doing exactly this. They’re gathering data in the background on their customers, they’re understanding what’s going on in their life. And instead of sending them, Oh, you just bought a belt for me, I’m going to keep hammering you with the belts. They say, hey, you know what our models are saying this person probably is going to be in a market for a new sweater person. And before they really even start going out to look, we’re gonna send them a coupon for 50 bucks off the latest sweater, and we’re actually going to save them money on something that they want and need, right. And this is the same thing that has to happen in mortgage where you get in front of it, you understand, hey, this person just had a baby, they’ve got great credit, right? Their house is probably too small for this expanded family. And so now we’re going to send them an offer before they’ve already gone out there and started shopping with other lenders, we’re going to send them an offer saying, Hey, we can help you afford that new, larger house that you’ve been thinking about. Let’s talk right.
As I’m hearing us talk, I realize especially when you made the comment about freedom has a data scientists department they’re really going in and analyzing the behavior. Is this telling us that the game is going to the bigs, only those that can afford these more sophisticated data scientists in a backroom somewhere to working away? Or can they partner with trust engine, and the little guy has a fighting chance to stay involved here.
And that’s what we’re trying to do. We have our own data science team, we’re investing millions of dollars in building this platform. And the whole idea is to arm the average lender with Amazon like capability, right? That’s exactly what we’re trying to do. And we’re finding that even large groups like a freedom and or like a UWM needed our services as well. I saw this in other industries. When I was at Oracle, our two largest customers were Facebook and Google. So you would think that Facebook and Google think they would have gotten they would need you What do they need us for? They’ve got the largest datasets in the world, and what do they need our help for? They’ve got the wrongs of data scientists and all this stuff. But at Oracle, we had an incredible data set that they just didn’t have. And we were able to give them predictions on their consumers and how to engage with them that really enhance what they were doing. And they used our data and insights in combination with their own to provide brands even more accurate advertising and more effective advertising. And so we’re able to do that here. That’s what we’re doing exactly in the mortgage industry, you really need to do as a lender is stop that fear of change, right? Embrace innovation. Right? Get out there and try some new things. Whether it’s us, or another tech platform that you really think is going to help you achieve your business goals. Try it. Don’t be scared of doing it, the folks that do and embrace innovation, they’re going to win if you don’t believe that look at every other industry in the world. And I see a lot of fear in this industry. Honestly.
Where you do you see the fear. I got so many different directions. I want to go with the conversation. But let’s touch on that fear thing for a minute. Where do you see the biggest amount of fear in the eyes of the mortgage bankers right now?
Oh, man. So one of those is just this idea of fear of failure. Right? What if I, oh, my God. And I understand by the way, the industry is under a lot of pressure right now. budgets are shrinking. People are cutting back, right. But if you listen to some folks in the industry that some of these are controversial. Listen to Matt Ishbiya. What does he go out and say, right, he’s saying I’m doubling down, I’m tripling down right now because everyone else is pulling back. Right? He’s scared.
Yeah, Matt is a fighter.
Yeah, he’s a fighter. And so I know he’s a controversial figure. But I tell you, one thing he’s done is he has broken the mold. He’s tried things that other people weren’t willing to try. And man has it paid off for him, right?
Paid off in such a way and that there’s so many wonderful management stories I can tell you about. I know Matt, and nobody been sat in his office and talked to him and watched him around his office and around his complex and how he operates. It’s a great story. I want to shift over talk about servicing retention right now. But you talked about you’re doing the same thing and servicing retention as you are as far as read GD, new loans. What are some of the things that you think the industry needs to realize about gathering data about customers, so that they have a chance to be the first at the table when the customer is going to act. And again, mortgage.
One thing we’re seeing right now is that the prospect database is being underutilized or dismissed in terms of value. And the prospect database, we believe we have the data to support this, right now in this purchase market is by far the most valuable database more valuable than your current borrowers. So what’s happening is, when a lender interacts with someone, and for whatever reason, they fall out of the process, right? The lender is not doing a good job in general, some lenders are better than others, in keeping that data and keeping in touch with those people. So what they’re not existing by just a birthday card. Yeah, yeah, not just the birthday card, but actually figure out ways to in a relevant way, in a way that you’re adding value to their lives, keeping some relationship going with them, and monitoring them. And what we’re seeing today, and this is real data from some of the larger customers, is about a 4x increase in conversion rate, from when we signal an opportunity on a prospect versus an existing borrower to application for x increase in the conversion from opportunity to application. And we’re driving a ton of purchase business with the prospect database today. And we talk small lenders about they don’t even they trash their prospects. They’re like, oh, this person didn’t make it through. Either they came out before they even did a full application, or they did an application and they didn’t go through to close. And they don’t even keep track of those folks, that is such a missed access. Such a missed.
Missed opportunity there. Yeah. And then we have one of the richest databases, if you do have get borrower information, the 1003 is just one of the richest databases of information that you can mine and work so much a build relationship off of. There’s so many opportunities, I’m looking at the time and I want to land this book, I got to have you back Rich, because what you’re doing there, want to get insights into LOR, who bought both sales, boomerang and mortgage notes and then put them now under the trust engine, I love the name trust engine is a great way to put it because we need to build trust, I get that. But I want to really talk about now your vision, what can we expect in the next 6 12 months under your leadership at these companies? Why should people be picking up the phone and calling someone a trust engine? On both fronts, the sales boomerang platform that you have, and then how it works with Dave Savage, and that the group over at mortgage coach?
Sure, it’s just saying, you know, we’re fully integrated, right where one company, so sales boots, yeah, I’ve been folded in. And we’ve introduced our new product line, which is the borough intelligence platform. And if I were to say one reason to pick up the phone and call us, I would use the term partnership. And this is something again, that I’ve seen in other industries, and we’re bringing to the mortgage industry as well. We’re not just another tech vendor, right, you’re not going to just buy software from us. And then it’s up to you to go implement it, go figure it out to see if you can get value from it. The way we’re looking at this as an opportunity to partner together to optimize your business, to help your loan officers become successful help you as a lending executive reach your goals, and help your borrower reach their goals. And that’s exactly what we’re doing at trust engine. So we’re building a holistic platform that just makes it easier to understand your borrowers easier to then reach out to them and provide them something of real value, right? So you can feel good about what you’re doing. And then to actually take that information back and bring it back into your business so that you can then improve really improve your business, right, like how do you understand which loan officers are performing well, and why. Right, and how do we replicate that? There’s a great story that one of my mentors used to tell me I won’t tell the whole story, but it’s about basketball. And there’s a big study done about basketball coaches and some basketball coaches were focused on Oh, what are all the problems? Right, and let’s just fix each problem. And then some basketball coaches were focused on Hey, these are the players that really are doing well. And how do we enhance that and do even better and the basketball coaches that focused on what was going well and enhancing it there? They are the ones that have won championships, and that’s what we’re trying to do here in Trust Engine, is figure out what you do well, what we can continue to do well and really enhance that and blow it out and do it in an automated data driven way.
Yeah. And then there’s coach wouldn’t who talked about the basics, like even just the most fundamental basics, like how to tie your shoe, how to lace up your shoes? I love some of the stories the coach would, when you look at the power intelligence platform, where is it at now? And how do you see that power intelligence platform growing? Is it the number of borrowers that are coming into the platform or, as well as the amount of information you’re getting on the borrower, and each borrower is that growing are they both growing?
They’re both growing very rapidly. So we expect literally just in q1 to double the number of records that we have under management and the number of borrower data files. So we’re growing very rapidly on the borrower intelligence platform. And that’s also translating into kind of everything doubling just in one quarter. So people are recognizing the value. And that’s super exciting to me, especially when this was really an idea only 18 months ago, and now to be doubling quarter over quarter. That’s really exciting. It’s a lot of fun, and it’s going really well. But the most important thing is really listening to our customers and folding that into our product development roadmap and being highly flexible to their needs. So we started off the borrower intelligence platform, just with two lenders, this was a little over a year ago, we rolled it out with the first two lenders, and we spent a ton of time with them really understanding what is the loan officer do all day? And what’s the optimal day look like? And how can we not give them another five platforms to log into? But how do we focus on taking what they’re doing what works for them and making it easier, better, faster, more productive? And I think that’s really been paying off for us.
Yeah, it’s really exciting to wrap it up on a leadership question. One of the things that Dave Savage told me, he says, Dave, I’m so excited about the direction of the company. It’s Rich’s background in tech and outside the industry that’s coming in. But he says the single most important thing that Richard Harris has brought to our company is leadership. I love that topic. He says, I thought I was pretty good leader. I thought I had some really good ideas. What have you brought that Scott guys like Dave Savage, so excited, Rich, man.
This could be a whole podcast, listen to it.
So maybe we should do it.
I hope I got to two things, two things that you want. And then we can decide to dig in and other time to on this topic. So we went one is what I call courageous authenticity. I always thought I was a very straightforward person, right. And I remember a mentor of mine, I sat in on a session where he was giving feedback to another executive. And I was blown away. I was like, Oh, my God, this guy is really telling him what he thinks, like truly telling him what he thinks. And that changed my thinking. And I brought that to trust engine is when we have a meeting. There’s no politics, it’s no holds barred. And that doesn’t mean that you’re an asshole. Right? But that means that you are authentic, right? And you really focus on okay, what do I really think I’m not going to not say something just because it could potentially hurt this person’s feelings. Especially if it’s going to help the company. The point is not to hurt someone’s feelings. The point is to solve problems, right? And enhancing so courageous authenticity is something that needs to go into performance reviews that needs to go into meetings. It needs to be leadership by example. And it’s a really important thing. That is one piece of it. The other one I would give you is ruthless prioritization. And I like these basic concepts, right? Ruthless prioritization. I remember and I could tell you a story about this. I’ll give you a quick example of this. When I joined Add This, two thirds of our revenue was coming from a product line, that was clearly not going to be the future of the company, we had declining gross margins. And I had to make the very tough decision to shut that product line down two thirds of our revenue, right, just gone. And it turned out to be the best decision we ever made. We reallocated resources, we grew massively, and we ended up having a great exit. And that’s something that I’m also bringing here to trust engine. It’s been incredibly important as we face this very tough environment, where we’ve had to make some really tough decisions on do we continue to support the product roadmap of something salesmen boomerang wanted to do or mortgage coach wanted to do? Or do we focus on the borrower intelligence platform? And how are we going to allocate resources. And you can imagine when you bring two companies together, everyone’s got different ideas of what you should do. And you do need to be ruthless about views of the goals. This is what we’re going to do everything else. See you later. We’re not doing really tough decisions to make. But those are two things I would say that I’ve brought to the table.
David says you’re doing that extremely well. And then to be able to do that in a way that you get buy in is so important. I have another podcast that we call Lykken on the Leadership. And I have already, I’m going to come after you for another interview. And we’re gonna do a lot of leadership because it’s such a needed topic. And I think especially in the mortgage industry, throughout the industry, I mean, we’re seeing leadership changing, and what is going to be effective in moving forward. There’s some basic principles that I think will last but there’s also we’re seeing, like you’re saying authenticity, that it’s honest, straightforward, and may be tough. But it’s really important that we speak, frankly, and making those tough decisions. I can’t wait to to record that one. But, Richard, thank you so much for your time. I’m so excited. How can people reach out to you and connect with you if they want to learn more? And actually have a conversation with you?
Yeah, just email me [email protected] very easy. Anytime.
Yeah, very good. We’ll put that in the show notes, listeners. So Rich, thank you so much for being here. It’s such a pleasure to meet you. And I can see why David Savage is so excited about being a part of an organization led by you very appreciative of your time today.
Thanks, David. Thanks for having me on. I really enjoyed it and happy to come back anytime.
Perfect. You’ll be bac, we will have you back. Thank you.
Hey listeners, this hot topic would not be possible without our sponsors. I want to say a special thank you to our sponsors – Total expert, Finastra, Byte software, Lender homepage, Angel AI, Truv, The Mortgage Bankers Association of America, Lender Home Page, The Mortgage collaborative, iEmergent, Modex, Mobility MMI.io and knowledge Coop. There’s so many good sponsors here and we’re so grateful for each one of them. Be sure to check out each of those sponsors and their spots on our website Lykken on Lending under the sponsorship page. Thank you.
Rich is a data-driven leader with a passion for building and scaling SaaS companies that leverage data and analytics to optimize performance. Before taking the helm of TrustEngine in 2022, Rich was CEO at SparkPost, an email infrastructure platform which was acquired by MessageBird for $600 million in 2021. Rich was also Group Vice President at Oracle (NYSE: ORCL), where he led international operations for the Oracle Data Cloud. Before that, Rich was CEO at AddThis, a digital ad personalization startup, where he rapidly scaled revenues and orchestrated its acquisition by Oracle. He holds J.D. and MBA degrees from the University of Maryland.