Lykken on Lending

[David] Hey David, good to be here today. Sorry, I think you’re traveling, but I’ve got an interesting topic. I wanted to bring up a glass half full verse glass half empty thought. So is it partly sunny? or is it partly cloudy or is it mostly sunny or mostly cloudy? If you open up weather.com or many of the other apps, you’ll see a lot of partly cloudy, mostly cloudy. The day will be nice with clouds. How about you will have 80% of sun today with some variable clouds? or how about mostly sunny? We’re always sunny either way. We’re going to start looking at things at the glass half full. I think the weather people out there should take some advice. Alright. I hope everyone’s having a mostly sunny day or highly sunny day. Here’s a scam. We all need to look out for. This one is really unique and it’s new. So, what will happen is you will get a bit of cash sent to you through PayPal or Venmo or Zelle. Somebody will then message you and say, Oh my God, by mistake, I sent you this money, can you please send it back to me? and most of the time people are sending the money back. Here’s the problem. The money comes back out of your actual account. Turns out that it was a scam, and the money sent to you was used with a stolen credit card. So not only did you send money back to the person that sent you that fake cash advance, but now when the credit card gets reported, the cash comes out of your account and so now you’ve lost. In the end, do not fall for the scam. Help your borrowers and your employees understand that there are new scams that are always occurring. If you’ve got an internal CIO, this would be one that you want to talk to them about and help spread the word. Speaking of customer service, especially in the mortgage industry, I think there should be a customer service award. I think there should be something that helps identify lenders that do a really good job at customer service. It’s not about having the best rates. It’s not about closing a loan the fastest, or maybe that’s part of it, but it’s an actual repeatable customer experience that helps them be who their brand is and do better. Let’s talk about that next week, David. Maybe it’s something that we can stir up here in the industry. Alright. Digital assistance. So big question for everyone in general and in mortgage. How often do you even want to use a digital assistant? We’ve all tried them, right? Do you say just, Hey, Siri, set a reminder for this evening or Hey, Alexa, set an alarm clock, what do you use it for? If the assistant started off with your customer experience and said, Hey, I’m really good at most things. Would you like to give me a try first? Would you actually talk to it? or are you done with these? or do you have digital assistant fatigue at this point? I asked that question because it happened to me and I’ve been involved in building two digital assistants in the mortgage industry and it’s interesting because while we’re in a place where they should work out and be used everywhere, we’re not necessarily in a place where I think we’re ready to use them in our industry as much as we’d like to say. Here’s why I say no and I don’t think they do enough is one of the reasons. It’s a bigger topic but shame on UnitedHealthcare.  I received a letter in the mail and in that letter it talked about some claim not being covered and it showed that I would owe a very large sum of money. The letter didn’t mention enough. I called them. I got in touch with the digital assistant. It asked to see if I could help, if they could help me first. I went through a verification process. It turns out that the agent had no idea what I needed. It spun me around. I called back. I did it again. So not only did I now verify a second time when I got an agent on the line, I had to re-verify everything and then eventually I was being told that the letter, which the digital assistant didn’t have access to, didn’t mean what it meant and then I don’t owe any money and now what’s even funny is that they were said they would call me back and they still haven’t. So the question in general is if a digital assistant can’t do what it says, how quickly are we going to abandon them? Think about that as we look at digital assistants in the mortgage industry. I think it’s one thing to just create an assistant that can do something. It’s another thing to create an assistant that creates a great experience. So, keep that in mind. Alright, David, the Mr. Cooper data breach, unfortunately, data security is on all of our minds recently. And I hate talking about the topic, but it is just so important. It can hurt your brand as well. Mr. Cooper, if you remember, there was 14.7 million customers where their social security numbers were leaked. Some of them now, there are reports and lawsuits. People are being reported as being hit by a wave of spam, and they’re seeing credit cards opened in their name. So in July, in Texas federal court, one instance a customer had $25,000 withdrawn from their Charles Schwab account and an amended complaint for a consolidated class action lawsuit, which now states over 22 members have had something similar, and more and more starting to creep up. So, unfortunately, these data breaches continue to happen, and even more unfortunately, we continue to be affected and will be but back to the beginning of this segment, it is still partly true. Sunny. Alright. Let’s talk about two more quick topics. The first one is cybersecurity audits. This was in National Mortgage News. It talks about how you need to start looking at regular cybersecurity audits and how critical they are for lenders so that especially as the technology gets more advanced, how you need to make sure that you’re verifying this includes gaps in security protocols with your vendors. You may have a vendor for 10 years. Are they SOC2 audited? Have you gotten a new update? Have they become a larger vendor? They have new offices. Have they gone all virtual? How are their vendors protected? These are things you need to take a look at and be considered. There are independent third party auditors that you can hire just for the vendor alignment. You can do it on your own if you have the right folks, but it is extremely important so they’re focused again on technology and here’s the big thing, cybersecurity. So make sure you think of those audits. The second thing is the vendor assessment section of that is cost efficiency. Are you doing a technology audit? We’ve talked about this many times in the past, but the goal is also to reveal unused or underutilized tools within a lender’s tech stack so in other words, things you don’t use that you may pay for, maybe you’re expecting more loans and you have a minimum in your contract. It’s time for renewal. Maybe you thought you were going to use digital closings, but you’re not. Maybe you acquired another branch and they have technology that you didn’t realize hasn’t been canceled. You want to take a look at these things. These technology audits are huge. So, it’s a vendor assessment and cost efficiency audit and you’re looking at inefficiencies. You’re looking at overage. You’re looking at things you just didn’t pay attention to. You can reduce significant costs.  Alright. That’s pretty much it for today. We’ll be live next week. Hope everyone has a great week. And as always, you know how to get ahold of me. It is Allen, A L L E N at TMS dash advisors. com. Thanks for listening.

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Allen Pollack, Chief Operating Officer, Tech Consultant

Allen Pollack, a Mortgage & Financial Services Technology Advisor, is a subject matter expert in the mortgage origination process along with software product management and software development.

In today’s financial services push to all things Digital, Allen has been helping lenders and financial services solution providers align their digital transformation and technology strategies by removing the human element of risk, and automating processes that drive efficiencies and margins into profits.

Over the course of his career, Allen has co-created and developed technology business models that have birthed highly successful, innovative solutions and companies.

Allen co-founded and served as CTO of New York Loan Exchange (NYLX), a loan product eligibility and pricing engine (PPE) that made an immediate impact on the industry, scaling the company quickly and forming partnerships with multiple mortgage and financial lending companies. In 2012, Allen was a co-founder of a merger between NYLX and Aklero Risk Analytics that created LoanLogics, A Mortgage Loan Quality and Performance Analytics company. Allen served as CTO where he continued to bring new and innovative product solutions to the market that made a significant impact to mortgage lenders that reduced risk, scaled business channels, and grew profits in a very competitive and highly regulated market.

Allen is also is mortgage and finance technology contributor on a weekly live industry podcast, Lykken on Lending, and is launching a new podcast soon to be released, TechStack Radio, dedicated to technology and innovation in Financial Services.