Lykken on Lending

In our Hot Topic this week, we have Mike Haedrich, Senior Product Manager @ Finastra, to discuss how a digital workflow requires you to align with a single solution provider & how easy it is to support an electronic signature solution.

Want to know more about Mike Haedrich?

Mike is a senior product manager at Finastra. Mike has been in technology for over 30 years, supporting some of the world’s largest technology companies. Mike joined Finastra over four years ago and has been instrumental in developing the electronic signature strategy for their lending products. Mike has a Bachelor of Science degree in finance from the University of the Pacific.

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Hot Topic: The Digital Workflow And Electronic Signature With Mike Haedrich

We’re excited to have you here, Jack Nunnery. Jack, how are you doing?

Good day, David.

It’s a good day. We feel like we just hung up talking to each other. We did. Jack and I are excited to be here with you, along with all of our regulars. This show is created by mortgage professionals. It is for mortgage professionals. We’re so grateful to have you as our reader. Our commitment is to bring you timely information that you can read anytime and anywhere. If you’re reading this, make sure you subscribe to the Apple Podcasts. You’ll get additional advantages for doing so. If you’re an Android reader, you can do so over Google Play.

We shifted over from Blog Talk Radio. We’re still recording via Blog Talk radio. We are doing a number of upgrades and are very excited about where we’re at and where we’re going. You can always go to Lykken on Lending website. Everything is posted there live for you. I want to say when you look at what’s going on in the world, there are so many factors. There’s a book that I just read called Unoffendable. It’s by Brant Hansen. One of the most interesting books. Sometimes, with all that’s going on, I think it is so good. It’s such a timely book.

Hey, Alice. You’re here. It’s good to have you with us. Anyway, if you’ve not read the book, Unoffendable, you need to grab it. Brant Hansen is a brilliant writer. I love how he talks about this. In this time and season in the marketplace. With all that’s going on, it’s a great book to have read and digested. While we’re introducing this Hot Topic segment, it doesn’t mean you’re going to be offended because this gentleman is outstanding. His name is Mike Haedrich. Mike is Senior Product Manager at Finastra.

We’re going to be talking about digital workflow and what it requires you to do to align with a single solution, and how easy it is to support electronic signatures and other things in there, so digital workflow. Workflow’s one of my favorites. Jack’s is as well. Alice, you’re into the workflow as well, are you not? You enjoy the workflow. Alice is there. She’s just taking care of a couple of things. It’s good to have you here with us, everybody. You’re going to want to stay for the Hot Segment a little bit later on.

I want to say a special thank you to our sponsors, Finastra Fusion Mortgagebot Solution, who does a great job of setting custom decisioning parameters to help streamline the approval process while keeping your lending team compliant and efficient. We’re going to be talking about that along with digital workflow specifically. Also, FormFree, they do a great job with their account check. It supports Fannie Mae’s positive rent payment history assessment. Check out the show we did with Christy Moss on June 20th, 2022.

Also, Lender Toolkit. Brent Emler, Michael Whitbeck, I have got on a show on July 11th, 2022. That was interesting about what’s going on with underwriting. Also, Snapdocs helps lenders overcome the obstacle tadoptingpt the eMortgage technology. Snapdocs is now offering the eMortgage Quick Start Program. Be sure to check that out. Check that out on their website, by the way.

Total Expert do a great job working with you on your marketing, on your CRM, sales compliant, all the things. They have some of the most comprehensive solutions in place for helping you through the customer lifecycle, managing it. I encourage you to check out Total Expert. They are best in class in the industry.

Also, SimpleNexus. Hearing more and more people leaving Blend and moving over to SimpleNexus, I wonder why. It’s a lot cheaper. Checkout SimpleNexus at SimpleNexus.com. Also, our other sponsors, I say a very special thank you to the Mortgage Bankers Association of America, Lenders One, The Mortgage Collaborative, SuccessKit, as well as Knowledge Coop, Mobility MMI, Modex, the Mortgage Advisor, and DW Consulting.

Finally, a special thank you goes to our regulars, Adam DeSanctis of the MBA, Les Parker, Matt Graham with the market update, Alice Alvey, Allen, as well as Jack, my co-host. Welcome to the Hot Topic segment. It is the 25th of July, 2022. We have as our special guest, Mike Haedrich, the Senior Product Manager of Finastra. We’re going to be talking about digital workflow. It’s exciting topic. I know Jack has really appreciated workflow. Alex and I have talked about it numerous times. The digital workflow, get into that. Mike, good to have you on the show.

Thanks a lot. I’m excited to be here.

It is exciting to have you here and have you talk about one of my favorite topics. Tell me a little bit about yourself, your background, and your journey to where you’re at in this position at Finastra.

I spent many years in high tech on the microprocessor side of the business. I have been with Finastra for a few years. It’s a very interesting change in industries because in the high-tech side, you’re flipping new products every eighteen months. If you miss a cycle, you’re falling behind the curve. You’re working hard on meeting those deadlines. Now, the finance side, working for a FinTech, there is some similarities there, but the industry is very slow to change. Because it’s slower to change, you can miss a deadline, and it doesn’t ruin the ability to get a product out. It’s been a change for me. With that being said, it’s a very exciting base working with in high tech. I’m happy to be continuing that here at Finastra.

I’m glad to have you here talking about this. Most of us have an idea of what workflow looks like, but adding the word digital might throw a little bit of a curve to some folks. Give us an insights of what do you mean by a digital workflow.

I could probably answer that in one word, paperless. It goes a lot deeper than that. When you peel that on your back just one layer, you quickly understand more about that digital workflow, and it’s being paperless from cradle to grave. If you want to start that loan process, you take information in, and be able to finalize everything without the creation of paper. I’ve worked with a number of customers and they’ve said, “We have digital workflow.”

When you start to ask them questions, “Tell me more about your digital workflow,” you realize they have a lot of manual steps. They’ve eliminated paper, but they’ve created a lot of steps to enable that workflow. For me, a digital workflow is driving efficiencies. It’s not necessarily creating all these work around. You want to create a better customer experience. That customer is the institution as well as the institution’s end customer.

Digital Workflow: Digital workflow is driving efficiencies. It’s not necessarily creating workarounds, so create a better customer experience.

You also want to reduce errors. I don’t want to enter the name Mike Haedrich three different times during my process flow because that third time, I may spell his last name incorrectly, and then you’re starting over. Finally, faster time with the money. When you have customers, if it’s a loan, they want to get their loan as fast as possible. A well created digital workflow process will allow that faster time with the money. Again, paperless, but there’s a lot more to it, a lot of underlying pieces to ensure a digital workflow is working the way it’s defined.

Does a digital workflow solution require me to align with a single solution provider?

Coming from Finastra, I want to say yes because we have all the different solutions, but let’s be honest and realistic here. The answer is no. we want to define what we want our process to be, look at the solutions out there, and be able to identify the best solution for our institution. I’ll pick on Finastra since I’m familiar with the company. I work for them. We have a lot of different solutions. We probably have a solution for most steps within that digital workflow.

Can Finastra be your solution? It probably can. Do we understand that the good likelihood that you may choose somebody else for a different piece of that process? We understand that as well. The bottom line is you want to be able to find what works best for you and your institution. If it’s different pieces from different organizations, you want to make sure they work well together. Going back to defining the workflow, if you got to do a lot of workarounds to get application A to work with application B, you’re not creating benefits to your organization.

You’ve reduced paper and you may be giving your customer a digital experience, but what it took to get there was very complicated and challenging. The answer to the question is no, you don’t need to be using single solution. You want to choose the solution that works best for you and your organization, but you want to make sure there’s integration.

There’s the ability to integrate and make them work well together seamlessly, but sometimes that becomes trying to achieve perfection. Perfection is going to take you a tremendous amount of time where getting 95% there will take you a little bit of time. You got to weigh it. You got to figure out what works best for you in your organization.

Alice, let’s get over to you.

As you were talking made me think there are so many points in the process at which we need that eSignature from the very beginning, then you need it sometimes in the middle and then pre-closing. You need it at closing, and sometimes you’ve even got to go post-closing. As you said, a lot of different moving parts that you can have from different providers. Do you end up with separate or single, how easy this is, is it to support all that electronic signature solutions? Do you have any insight there?

The roles I’ve had was supporting eSignature for our organization. It’s interesting because just stepping back a little bit here is would always check with our customer base and say, “How many of you are using electronic signature?” At first, I was very surprised. It seemed like 10% to 15%. As the years progressed, I would always ask the question, and it’s probably grown from 10% to 15 to 20%. The numbers are low. I always scratch my head, wondering, “Why is it so low?”

The ability to use eSignature is quite easy. There are so many solutions out there. David, at the start, you mentioned Snapdocs. That’s one solution. They’re an excellent provider. They can do everything you need from an eSignature solution. I’m not real familiar with their installation process, but you can probably get them up and running in less than a couple of hours. You can probably say the same with most digital eSign providers. It’s quick, easy, and doesn’t take a lot of work. Are they following UETA and the ESIGN Act? I would say they all are. If they’re not, they’re probably going to be out of business in no time.

With that said, just like the digital workflow, it’s a simple word, paperless, but when you peel the onion back on eSignature, it does become a little bit more complicated. As you go through that workflow, if you have a number of documents, are they mapped? When I say mapped, do you have that signature line mapped with your eSign provider? When you hit send for signature, the eSign provider knows where that XY coordinate is for a signature, and they can send it directly out to the customer.

Now, that is what’s critical. That’s part of the integration. You want to make sure your eSign provider is integrated with your documents. When they’re not, you can still go ahead and do it, but what you’re doing then is you’re sending your documents to your eSign provider, and then there’s an intermediate depth, a workaround where you’re going to then have to go to your eSign provider that you’re utilizing. You’re going to have to go in there, and manually map those signatures, pull over the electronic signature to the area on the document where you want the signing.

Digital Workflow: Make sure your e-sign provider is integrated with your document.

If you’ve got good integration, that all happens seamlessly. You just hit send when your documents are complete, it’ll go out to your customer, they’ll sign that document, it’ll come back to you, and voila, it’s done. If you don’t have that proper integration, you may have to do some manual mapping. The whole process is work with your vendors, your providers, and your partners, see where the integration is, see where it is not, and see if that’s acceptable. eSignature is no different than any of the other ones.

That’s a good example of the use on this. Jack, let’s get over to you.

It feels like the mortgage industry have been trying to move to digital solutions for the last couple of decades. It’s like dragging the mortgage industry, kicking, and screaming into the 21st century. I put myself in the seat of our readers and I ask, why do I need to make the transformation to digital now?

That’s a great question. It’s one I hear when I talk a little bit about my bio coming from high tech into FinTech and I said how the transition is a lot slower. This is a great example of that. Banks are saying, “Hey, I’ve been doing paper, diamonds, and having my customers come in and sign forever. Why do I need to change?” I don’t know if it’s the greatest analogy but I’ll use it here. I think about way back at the turn of the 20th century, when we still had horse and buggy and buggy whip.

You had this buggy whip manufacturer saying, “I see these automobiles, but who cares? I’ve got a great company going here, selling buggy whips like there’s no tomorrow. Why do I want to create an accessory for an automobile?” It’s 100 years later, but are there any buggy whip manufacturers now? The answer is no. When you look at the banking industry, those customers, and we have a lot of them that I work with directly that are still very paper-focused, “Come in. We got great relationships. We want our customers that come in.”

I get it. I’m not trying to say stop that process. I do believe you have to have a digital workflow process in place to support the Millennial. The youngest ones are in the workforce. They’re buying cars. I don’t know if they’re buying homes right now because where real estate is. Hopefully, they’re thinking about that. They’re thinking of making these purchases. What do they do? They all use a smartphone. What do they expect? Smartphone is great, and it’s also been a headache. Because it’s been so convenient to do everything in that smartphone, they’re thinking, why can’t I sign my documents on a smartphone? Why can’t I sign my loan applications on a smartphone?

Those organizations that are getting away with the old process, maybe you can even say the current and old process, I don’t know how much longer that’s going to last. I don’t know if it’s going to last another 10 years, another 5 years, or another 20 years. When you think of the Millennials than the Gen-Zs, they’re getting more ingrained in that smartphone, utilizing that for everything they do like the pandemic, the lockdown, the paranoia we all face and deal with.

We don’t want to come into that bank anymore unless we absolutely have to. The transformation is critical. If you’re not there, you got to get there. Whether that is tomorrow or next year, you’ve got to have a plan to get there. You need to be implementing that plan. You have to have an organization that embraces the plan, because sometimes you’re going to hit a little wall and need the organization to support you as you get over that hurdle.

If you’re the only one, if you’re trailblazing when you hit that wall, someone’s going to come back and say, “I told you so.” It’s going to make the stumble even more. You do need to make that transition. I can’t say it strong enough on how important it is to have a digital workflow supported in your organization.

Most people understand and agree with that. We’re getting some great questions in from our audience. Before I start putting those in front of you, Mike, let’s get over to Alice with another question.

As you pull all of this together, do you have metrics on the efficiencies? This is something lenders really want today. I’m so surprised that the low percentage that you mentioned are using eSignatures because I would think this is so easy and so critical to have what borrowers want, and to gain the efficiency needed.

I don’t have a lot of data on efficiency other than what I have read. I can’t tell you our customers are achieving this level of efficiency versus that level of efficiency because we’re the provider of solutions that help implement a digital workflow. Looking at some of the research that has been out there, efficiencies of 50%, 60%, but that’s secondhand information. Hopefully, the researchers that are putting this together are putting together realistic data. Firsthand, I don’t have that information.

With that being said, there are tremendous efficiencies to be had. Again, it also depends on how well you’ve implemented that digital workflow. I’m sounding a little bit like a broken record, but if you said we’re going digital, but you’ve got so many work around in that process, you may find the efficiency may be negative because every step, you’ve got to re-enter that person’s name. Every step, you’ve got to make sure this is transferring over and working properly.

The efficiencies are there, but you’ve got to be smart on your implementation in making sure that it does happen in a manner that is beneficial to your organization. Again, if you don’t show the benefit to your organization, they can easily creep back to the old process what they know work, what they feel comfortable with, and what they feel is easier for them. If you don’t show those efficiencies, then it’s very easy to sneak back to the old process.

Even if you did have them, they would be under not telling the rest of the world what that was. I can say for us, for Union Home, it brings great efficiency to the business process. Thank you.

I’m a listener. I’m ready to start the work effort to implement a digital solution. In your mind, is it something that I bring on-premise or is it something that I run in a SaaS environment? Is one better than the other when going digital?

My humble opinion is it is better to go SaaS. Can you do it as an on-prem? Absolutely. We have some products right now that we still have there on-prem. You can definitely create that digital workflow with an on-premise product. I probably wouldn’t be as bullish on SaaS if the environment around me was more stable. I don’t want to go off topic here, but a lot of the issues we have around power right now, energy.

If those come to fruition, we may find ourselves in a blackout. Maybe, we lose power. We may find our organization’s going to go down. Hopefully, it’d be at night, but let’s say from 12:00 PM to 3:00 PM, from 10:00 AM to 12:00 PM. If you’ve got an on-premise solution, you just lost capability of that solution. If you have a SaaS solution, they are located in data centers that are throughout the country, throughout the world. With us financially, we want to keep it within our country, and you can set up that capability.

When you do that, if you all of a sudden have a data center in New Jersey, and they’ve got a blackout-brown out, that information is also available probably in California. So you’re not going to lose your capability. One thing data centers do is they talk about the five 9s, being up and running 99.999% of the time. That is what is important to you and your organization. You have the capability to access data anytime 24/7. That’s critical. That has jumped up to number one for me. You don’t have to worry about maintaining servers and revision on the premise, so you can reduce costs, maintenance fees, etc.

It may even be able to reduce headcount, or you can transition people to do other things. It does allow you to do more when the application owner, that FinTech company is managing the application that you’re using. There are some strong benefit to a SaaS solution than on-premise. With that being said, we still support on-premise solutions as well. If I were looking at a new solution, I’d certainly look at SaaS.

People wonder, “Are we going to have brownouts?” We’re experiencing those here in Texas with the heat that we’ve had this year and the amount of growth in Texas because of so many people from various states, specifically one particular one out in the West Coast, California. We’re just overloading this grid. We are having some brownouts.

I never thought that would happen. If it happens to your facility there unless you have power backup, it doesn’t matter if you’re Saas or on site, good luck there. What is the trend that you’re seeing? Are most everyone’s going to SaaS? It seems like that, but I get concerned about SaaS solutions. What are the pros and cons of each one of them? You’ve touched on this before, if you could touch on that again for one of our audience.

One pushback I get about SaaS is security. You hear about ransomware. You hear about organizations paying tens of thousands of dollars because they’re going to lose all their data if they don’t pay these fees. A lot of it is because somebody got into their system and was able to take over their system. That is a huge concern. It’s very important that the organization when you want to go SaaS, when you want to go outside your firewall, which is what we’re talking about with a cloud-based solution, you have to have great authentication.

You got to make sure you’re users that have access have, whether it be single password or a strong password, you may want to have dual-factor authentication. For example, with our organization, my company, everything is dual-factor authentication. I’ve got a password plus I also have to do SMS, a text message. That helps ensure authenticity. I’m using my company as an example. We use Azure, which is Microsoft. They’ve got some great data protection capabilities. Amazon is no different. Authentication, as concerning as it is, organizations and companies have made great strides in ensuring that the data is being well-protected.

Digital Workflow: When you want to go outside your firewall, you need great authentication. Make sure to protect your users who have access with a dual-factor authentication.

As a financial institution, it’s not all up to your gas provider or your data center to make sure everything is safe and protected. The organization has a responsibility. You can’t look at that lightly. You have to look at that very seriously, and make sure that your organization is being trained and understands the importance of the application and keeping that application safe. That to me has been one of the greatest concerns of Saas with the customers that I deal with.

As we bring more and more products online, we’ve found that some of our customers didn’t even realize the application was available online. They transitioned to it and they love it. It made their lives easier. I don’t want to downplay and say security and authentication isn’t important. It’s extremely important. That’s the thing that makes people step back more than anything else.

That’s why it’s so important to have the right partner. With Finastra, whether you’re in a SaaS environment or in-house, There are so many advantages. That’s where the company matters. You guys take data security, whether it’s either scenario extremely seriously. We’re getting a question in from one of our audience. Does the digital workflow change if you’re focusing more and more on mobile solutions? It shouldn’t make a difference, should it?

No. That’s my answer. I totally agree. The digital workflow, whether you’re working with mobile solutions or not, it should play out very similar. I don’t see a reason for it to change.

That’s a shot right back with another question. Great, the way you worded that, but maybe I should have asked, is there anything I should think differently when planning a workflow process for a digital solution? Anything I should be thinking about differently there?

When you say mobile, I’m thinking mobile devices.

iPad, digital tablet, iPhone, or an Android.

What you want to make sure is your electronic signature solution. I’m going to focus on eSignature solution. If you’re going digital, you want to make sure that that eSignature solution can scale to support a tablet, smartphone, as well as a laptop or a desktop. It doesn’t matter the size of the monitor. That’s what’s going to be critical. You make sure that you have a responsive solution. Is that eSign solution that you’re using or you’re thinking of using, a responsive solution? Will it support a mobile device even though it’s going to look very small text-wise? Can it be displayed on my mobile device as well as the tablet, and so on and so forth? That to me is the biggest piece around a mobile solution.

There are so many different places this is going as an industry. It’s going to be fascinating to watch. You’re certainly a market leader. Did Microsoft award you as the leader in the marketplace, award-winning solutions at work? Talk about that.

We did. I don’t have all the details to the award. Years ago, in some capacity of working with Azure, we got a Top Vendor Award. We are very proud of that. I wish I had more details to share, but I don’t. We did get an award in regards to Azure.

Jack, any last questions you have for our guest?

David, I want to go back to one question. We’re talking about on-premise versus SaaS. I wanted to point out that one of the advantages of operating in a SaaS environment is you can sidestep a lot of the work effort/pain, bringing in new version updates to your technology. I’ve been a part of organizations that have run applications in-house. When you start making changes to code and even some configuration efforts, and then you bring in a new version update, it can create a lot of work effort to get that version update in.

I like to see in a SaaS environment the vendor be challenged to work around any customization, the code, or any configurations that might be at risk when you’re bringing the new version in. I wanted to point that out to our readers. At least in my humble opinion, it’s a decided advantage to operating in a SaaS environment.

Good point. You did say this a lot when you were at your last companies. Mike, it’s so good to have you here with us. I appreciate you. We’ve had as our special guest, Mike Haedrich, Senior Product Manager at Finastra, one of our sponsors. We’re grateful to have you here, readers. I’m so grateful to have had you here, Mike. I appreciate you taking time.

Thank you very much. I enjoyed it.

It’s been a pleasure. Folks, remember, we are going to be changing up the format in which we do all these shows. The Hot Topic segments will now be pre-recorded. We’ll be doing those as separate topics. Check out all the shows we’re doing. If you’re wondering what the update is, be sure to go to our website, Lykken on Lending. We’ve got so many things we could speak about. These are interesting times. Many people are interested in different aspects. We would love to hear from you.

Be sure to send me an email or a text message. I look forward to hearing from you. We’re doing our best planning for our program. We’re looking more and more to leadership in these particular times. We’d love to get your thoughts on leadership, especially as the components of leadership that are so critical that are working for you at your company, and what you wish was working better. Either way, we’d love to have you, and your feedback in and on the show.

Thank you so much for being here, everybody. Again, I want to say a special thank you to Finastra, the top of the list. We’re so grateful with their Fusion Mortgagebot Solution, as well as FormFree. We talked about what they’re doing right now, so many exciting things. As well as Lender Toolkit, Snapdocs, Total Expert, SimpleNexus, The Mortgage Bankers Association of America, Lenders One, The Mortgage Collaborative, Success Kit, Knowledge Coop, Mobility MMI, Modex, the Mortgage Advisor Tools, as well as DW Consulting. Folks, so good to have you with us. Have a great week. I’m looking forward to having you back here next week.

Important Links

• Apple Podcasts – Lykken on Lending
• Blog Talk Radio –  – Lykken on Lending
• Unoffendable
• Mike Haedrich – LinkedIn
• Finastra
• Finastra Fusion Mortgagebot Solution
• FormFree
• Christy Moss – past episode
• Lender Toolkit
• Brent Emler– past episode
• Michael Whitbeck – past episode
• Snapdocs
• eMortgage Quick Start Program
• Total Expert
• SimpleNexus.com
• Mortgage Bankers Association
• Lenders One
• The Mortgage Collaborative
• SuccessKit
• Knowledge Coop
• Mobility MMI
• Modex
• Mortgage Advisor Tools
• DW Consulting