Transcription:
Arcadio Lainez (
Hey everyone, greetings, and welcome. It's really great. I'm really happy to be able to reunite in person again. So, I'm still not over it after last two years, so it's really good to see you all faces out here. first, let me address like the elephant in the room. I am not Nima Ghamsari, Nima. unfortunately he had a flight delay, and he's been de Planed and then put on a plane, in Los Angeles, but I guarantee you he'd rather be here today with us, rather than being on a plane on the tarmac in LAX. So, if you see him around the hallways afterwards, it's cuz he landed and is able to get here and say hello. He'd love to hear from you. My name is Arcadio Lunez. I lead the borrower experiences work at Blend, and well not just the Blend, but on the world famous, product marketing team at Blend, helping our product teams and the UX teams sort of understand user insights so that we can deliver the products that lenders and borrowers really want and need. I will say one thing that I do share with Nema though, is his passion for leveraging technology to help more people access the dream of home ownership. And it also the financial prosperity, right? So, that's something that we all share as a DNA of Blend, especially, and that's one, one of the reasons why I love Blend. In case, for those who aren't familiar with Blend, we are the infrastructure that is powering the future of banking, from large banks. Fintechs, credit unions to community independent mortgage banks. They all use Blend, the Blend platform to transform banking experiences, for their customers. and we have the privilege of, powering billions of dollars in financial transaction each day, right? So, that's a testament to the technology and to sort of the need that's happening out in the world right now. Today we're excited to talk about the importance of digital agility in volatile markets. we know that's been a topic that's been top of mind for many of you, if not everyone here in this room. And we're excited, to be joined, by some of our, key partners to discuss their digital priorities, and their focus in the coming months and years. So, let me introduce them real quick cuz I think this is why you're here. first you may immediate right? We have Blair Sirman, Head of Home Loans, product management at Citizens Bank. we also have Michelle Lee. She is the managing director, Mortgage Strategic Enablement at First National Bank of Omaha and Nancy Kloser, who is the director of Mortgage Technology, at Evergreen Home Loans. So, welcome. Thank you for joining us. All right So, let's get started. We have a a lot of really good, good questions. but more importantly, we have their knowledge and sort of their insights as to what's happening out there and, and how they're, planning to, sort of adapt to the future. So, Blair kick us off. You here are my first question. Obviously, the macroeconomic environment has changed significantly in the last few quarters. If not, maybe going back a little further than that, what are citizens' priorities for success in this cha challenging and changing market? Could you give us a couple of insights?
Blair Sirman (
Yeah, absolutely. First, though, I do need help from this group. So we're competitive folks, right? I think almost everybody here is, next door is track two, and we had a little deal with them that we would be louder than they are. So, even though we haven't said anything yet, I do need you, if you could, on the counter three to just like, give us like a rousing applause. Like, if you need to stand up, that's fine, but Craig Redman next door needs to know you guys are having more fun. So 1, 2, 3. That was awesome.
Arcadio Lainez (
Yeah. Many, many of you may not know that Blair also moonlights as a motivational speaker. Thank you.
Blair Sirman (
Yeah. So to answer your question, actually, our overall objectives ha haven't changed, in this, environment. one of the things that we did, I've been with citizens now almost four years, and, citizens, for those of you that don't know the wonderful bank where I work, we have a very strong mortgage company and have had a very strong mortgage company, but we did not have good technology. We did not have a good customer experience. We had a good mortgage technology because we had wonderful loan officers and wonderful operations folks that took care of our customers. So, the great thing is, we haven't lost those wonderful loan officers and operations colleagues. but we have added over that time, a portion of that customer journey that we look to improve. So the environment around us is impacting only our vision, in that perhaps changing some of the sequence that we'll tackle, right? of things, purchase has always been very, very important to us. It continues to be. but some of those things that we were like, we can wait a little bit longer. We decided six, eight months ago now we need to start those now because if you're starting now, you're way behind, right? So, we started then, but the overall experience that we're looking to build was defined and continues to exist. It's just a matter of how do you build that out. The other thing that's sort of driving, from a macroeconomic perspective, to steal your word, it will likely also be the sort of the timeframes that it takes us to deliver, right? The amount of available capital to deliver, will, will then dictate a little bit, my appetite of I want to do all of these things at one time. I will still want to do all of these things at one time, but I also will need to, parse it out, budget myself appropriately. Yeah.
Arcadio Lainez (
And I think that's really refreshing to your perspective that, whatever happens in which, whichever way you invest, that ello is still at the center of your experience. And I think that's something, that we take really, too hard is this idea that the Ello owns that relationship.
Blair Sirman (
Yeah. So, to slightly change, I would say the borrowers at the high, at the, at the center of our, of our experience, but the loan officer needs to be supported to drive that. And the reality is, in my enterprise, the loan officers were successful despite that technology, right? but what we've done over time and we'll continue to do is, give them better tools to support that customer so that they can allow the customer to truly experience, to be honest, ever increasing expectations, right? Yeah. whereas they were successful before they continue to be successful. The question that, I think about a little bit, and maybe because it's, it's my primary responsibility is if we didn't continue to invest, or if we didn't invest the way that we did, would they have been successful as these things shift? And that's one where, it's just sort of the path that you are glad you didn't have to go down, but you think about a little bit because there are other paths like that too, right?
Arcadio Lainez (
So, interesting. All right, hang on tight. Don't go anywhere. Got more questions for you later. Oh, okay. this one, Nancy, how you doing all the way down there? So with interest rates rising, it has had a huge impact on mortgage volumes. What are some of evergreen's priorities in sort of this mortgage space? with that as a background?
Nancy Kloser (
Well, Evergreen Home Loans is an independent mortgage lender, and we just had our 36th year anniversary. So, that tells you a lot about our company. As far as, what we've been able to go through over the last 36 years, we've seen a lot of dips and a lot of surges in this industry. And our priority just doesn't change. It was from the inception, we focused on purchase business, and we focused on building that relationship between our loan officers and our realtors, that as a company that is the tip of the spear for us. And, we focus all of our efforts on providing those services to our business partners, realtors, and financial advisors from which we get our, referrals at our customers. So, we really focus on using technology to help us to provide a white glove experience for our business partners, but we also really keep that human touch involved in our, in our work with our realtors and with our customers. It's interesting in the, the sessions this morning, it just was like almost a setup for the fact that, the realtor business is not dead. And, it's the focus that we've had that's been our winning strategy for 36 years. So, we will continue to, follow through with that strategy and combine that human experience along with the technological experience. We are working on, from the technology standpoint, we are focusing right now on back office operations. We've really worked a lot on the front end digital experience for our customers and our consumers. And we feel like we've really got that pretty well established. So, now we are focusing our, efforts in the technology and in, the automated underwriting using artificial intelligence to bring that underwriting experience further to the front.
Arcadio Lainez (
Yeah, interesting. Yeah. And, and I'm hearing the same tenants around the human being at the center of the experience and really leveraging technology to deepen relationships, right? That, replace them. Thank you. Michelle, coming to, coming over to you. here's your first question. You ready? Yeah. All right. As an independent bank, how does the competitive environment shift First National Bank of Omaha's priorities, this year? and what are you doing the same? What are you doing differently?
Michelle Lee (
So, one correction, we are not an independent bank. We're actually a very unique bank, that sits in Omaha, Nebraska. We have a large credit card portfolio in addition to normal standard banking, products. And so much like Blair and Nancy, our priorities have also remained largely the same. we've been focused on creating a best in class digital experience for customers as well as our employees for the last three years. What has shifted though is obviously that lens in a lower, volume environment. Yeah. So, we're looking at those priorities, leveraging the bank's strengths so that we can position from strength in this, in environment, leverage the data from our credit card portfolio as an example. Yeah. How can we use that data asset to increase customer acquisition at a lower cost. We're leveraging the bank's customer base of non-mortgage customers, to take advantage of our financial print and taking advantage of the financial position and holding onto loans that we maybe had previously would have sold, in previous years. And, we're developing non QM products to create a niche, or differentiate us in the market. So really just leveraging the strengths that the bank has as mortgage maybe a couple years ago, supported other, investments. We're now kind of, hoping others in the in the bank will partner with us to keep us strong. We continue to also focus on our process efficiencies so that when that volume does turn back up, we have a strong running engine.
Arcadio Lainez (
Yeah. Thank you. And same thing, right? It's, how do you promote, growth through investment in technology rather than throwing the baby out with the bath water scenario. So, I think that the incremental approach is really like, really smart and really shows how much and deeply you understand your business and your people. So, I think that's really cool. alright. This, this next question is, maybe for all of you, if you have an answer coming in, get on it. It's really related around what happens next. And the question is, how has the evolving environment changed the way your firms are thinking about digital experiences that you offer, to your consumers? why and how? who wants to start?
Michelle Lee (
I'll start since I'm already like on the roll here. Do it. So we know, I mean, we've heard it multiple times already today. Our customers want the ability to transact digitally. We did that experience, we created that experience for our customers two years ago. but we've not completed it from an end to end perspective and so our current environment has really given us, I think, the focus and energy on making sure that experience is in the right, it's set up for success. Previous years I think we would've been distracted by volume. and origination tends to kind of take the priority over. and so being able to really give this time and energy has been beneficial. One of the other ways that we are looking to approach things differently is truly identifying and understanding the value that consumers are wanting to extract from us as FNBO as lenders, as ALOs. What are their pain points and are we listening to those pain points? So what we've started to do is really test into our assumptions more than we would have in previous years. So, how do we prove our assumptions true or false? what are the ways we can prove with the data and real feedback to find out quickly and maybe cheaply if we're wrong? It's a cultural challenge I think for, for all of us, especially at bank where we're testing into solutions that maybe aren't fully baked. Creates risk and uncertainty that, our internal partners and our compliance friends, they've been conditioned to mitigate and manage that risk, but it's a lot easier conversation when we can use data and feedback to show how the solutions are adding value and, increasing that customer, experience overall. Yeah.
Arcadio Lainez (
Yeah, Right. Yeah show me why instead of telling how exactly that's really important.
Blair Sirman (
Actually, I want to jump on what you said about the, I think the data is super, super important. One of the things, that I've been observing where I work specifically is we've invested a lot in creating sort of two distinct things that are setting us up for the future. One of those is, we've created eight or so world class customer experiences, but that's not where we want to be, Right? Where we want to be is actually as a citizen's customer. My experience when I'm getting a home loan deals a lot like it did when I opened my CD right? Or, the experience itself should, should feel as though I'm interacting with a single enterprise. So, it isn't as though we had a misstep when we've created eight world class customer experiences. The reality is you had to actually enable those and, build them on modern, modern architecture that is API enabled and, other things that we didn't have, so that you can then come back and tie them together. The key to that though is, is not just the sort of window dressing on these wonderful customer portals, it's how do you tie all of the data together right? and how do you leverage, we all have, I'm sure said even if it's in our head, why are they asking for this? They, I bank with them, they know me. Right? Or why are they asking for that? They already have that, right? we, we owe it to our customers. Like this is an increasing expectation. It's always been an expectation, but it's becoming much more real. That in the past, if we said in in our own head, Why am I, why are they asking for this? They, already have it. We went, Well, it's just the way that it is. Customers aren't thinking that way now they're thinking, Am I dealing with the right people? Cause they're asking for stuff they, they already have. What else are they sloppy about? Right, that's where the data and leveraging that data and being really, really smart about how we're interacting with our customers through a single sort of customer experience across all, in our, in my case lending, but actually more large consumer bank, that only works with great data availability.
Nancy Kloser (
It's interesting because for us, we're an independent mortgage banker, so we don't have that expectation from our customers that, we're not banking their data, so to speak. So, I think for us, what we've found is putting some of those automated processes in place, the asset verification, income verification, those kinds of things, our customers are more accepting maybe of that because we don't already have that information. So, it's kind of interesting to hear where your challenges are, cuz ours are not in that specific area. Now, we've had conversations lately about how much to extend the borrower driven experience and, the session that we were just in was talking about just that the mixture of technology versus the human touch. And, it's kind of the numbers there are bearing out and supporting the idea that technology can help us with, providing a better experience for our borrowers and our consumers. But we do hear this from our borrows, and actually I heard it just recently from one of my employees that was getting a loan and we were talking about using more technology in the front to right, supportive, borrower driven experience. And he just looked at me he said, honestly, he said, I don't understand how we could totally drive that process ourselves, because mortgage lending is complicated and there's, we specialize in, creating and producing special products for our realtors and our borrowers, for those challenging deals. So, in order for him to get a loan and the kind of property that he was looking at, he was trying to envision what a borrow driven experience would've looked like for him. And he felt like in the end, he would've still ended up needing to talk to his real, his loan officer, that he couldn't have picked a product from a side by side all by himself. Right, So I think we think about using the technology in combination with how we deal with our realtors and our business partners and our borrowers, face to face as well. We don't wanna lose that face to face white glove touch with them.
Blair Sirman (
Yeah, what you're saying makes sense through the lens of that one borrower. one of the things that we've been thinking a lot about is how do you enable so that you're interacting with your customer the way that they desire for you to interact with them right? From, no, listen, I'm gonna talk to my banker. I'm gonna talk to the retail loan officer. I'm gonna bring you my pay stubs into the bank branch, right? All the way through to me where if I could not talk to a human being, I would not talk to a human being. Right? I wanna do it online or on an app, Right? I want to provide you the information that you need, which by the way, I think should be far less than you're asking for. And, I want you to tell me when my money will be available to me. And if you tell me that it's more than, 14, 15 days out, I'm gonna ask why. So, the whole gamut, building for one persona, is a good start, but you end up needing to sort of go across helping customers where they're where they need to be.
Arcadio Lainez (
Yeah, having the infrastructure that in flex, for different use cases, I think it's, is really critical. Cause addition, now think you mentioned, one of the things that stood out to me is that implicit in your business model is this idea of sometimes education, right? Like, I can't decide by myself, like, how do I do it? And how do we help the alos do it as a fourth multiplier rather than like, on a one-on-one basis. Super interestin, I do have a few more really good questions, though. I'm gonna, I'm gonna keep going to them. I'm gonna come back to, Nancy, talking about sort of the industry as a whole in this, place where we are now. It's been a long journey, to make the mortgage, application and origination process a digital one. Do you see this happening today? And is the environment today a catalyst for change? Or is it an impediment? How do you think about that?
Nancy Kloser (
I think the environment today is a catalyst for change in our, business and our technology. But I think that the boro driven experience was really kind of, we were pushed ahead because of Covid. So if you weren't ready by the time Covid hit, you were spending a lot of time getting, scrambling to get your digital experience for your consumer in place during that period of time. I think we've evolved past that now though. And this environment is, to blare your point, retooling your back office to streamline your processes to now, get that loan moving quicker and faster and cleaner through your system. So, I think that's the push right now is to now, automate those processes in the back office that I think we've always wanted to, and we've kind of halfheartedly gone after that goal. Yeah. But I think getting this whole forward digital experience kind of, under our feet, has kind of allowed us now to go, Okay, so now we really need to get serious about taking care of the back office.
Arcadio Lainez (
Yeah, I agree, You can't outrun your coverage, as they say in football. Michelle, Hi, thinking about sort of improvements to efficiency that we were just covering, how, what are the benefits that your team has seen with digital like, transformation, and what are some of the most fruitful areas? Yeah. I'm gonna be mindful of time that we're at five. So, Yeah. I'll give you like a minute and then we'll do like a group thing. Yeah. right after
Michelle Lee (
That. So just super quick, So we went live with our digital solution in October of 2020. I think all of it was happening at that point in time. And so our teams were thrown into new technology at the highest volumes we had ever seen at the bank. I think what we realized is, the team, the LO's, the processors using our new experience made the technology work and a process they were familiar with because in stressful situations you go with what, you know. What we're finding now is there are a lot of opportunities for us to continue to retool, reeducate, kind of clean the slate. not just in our back office, but our front office, the blend, automated follow ups. We're seeing that folks are still not leveraging those to the extent that they could. How do you help show them that if by doing it this way, it's freeing you up to make more contacts with customers? So, just really taking the time, to continue to see those benefits from the digital, transformation. And then of course, I'm always gonna go back to the data. In partnering with Blend, we've, leverage peer benchmarks of where we are, outliers from a processing time, some of those types of things. And really just help dive into where, are we different and why sometimes it's explainable and sometimes it's not. And so just really trying to figure out how do we, how do we take advantage of the tools, make the tools work for us? and allow our folks to be most, most effective.
Arcadio Lainez (
Yeah. That's really interesting. Internal advocacy never ends mm-hmm. right? And it never can end. And then the second step beyond that is that how do you express it externally from the organization to the market. Right? That's the second big hurdle there. Yeah. Thank you. I love that answer. Blair, we gonna do, can we do a couple of minutes on this one? cause I feel like this is a really good one for you. the question is, for a long time, banks look to build much of their own technology stack inhouse. Is that era over? How do you see it and what are the areas you expect to keep in-house and maybe where you might look at third parties, solutions?
Blair Sirman (
Yeah, So, I don't think that era is over. I, think that, I heard earlier today mortgage is a commodity, right? I heard that. and really the process and service and technology around it can also be through that same lens. what what we've decided to do is there's certain things that I just do not want to invest in. Building a point of sale, for example, you guys do it better than we would do it. You will continue to invest in it, or I don't wanna waste our precious effort there, but rather you do that, us pay you. same thing with things like workflow and other things like that. There are areas though that I feel we have the need to have a differentiator. For us, for example, we, we have, we've built our own products and pricing engine, so that we can, again, back to a single customer experience, build a customer experience with a interaction of, eligibility and pricing calculation across lots of consumer lending. It also allows us to build loan products, bond products and other things that we need to be successful, in our space, with CRA and lending and other things like that. So, that's an area where we've chosen to build, which I believe is, the right answer. So I think it really comes down to is, what we are looking at updating, something, that you wish to continue to invest in, to differentiate yourself or, are the tools in the market available, where the, that experience itself should be treated almost more like a commodity, Right? Not to pick on the digital point of sale, but a digital point of sale is a, is a wonderful experience, of a 1003 application and follow ups, right? Which is important, the most important thing with the customer interacting with it. But it isn't an area that I think that we should invest, our, skills to try to solve that. And which is the reason why we partner with Blend.
Arcadio Lainez (
Yeah. Know what you're good at and know what you're not good at is just as important in your business decisions. Yeah, great. We have about a minute. I wanna do this lightning round. this is for everybody. So we'll start with Nancy. In your opinion, what are the major hurdles left in the industry in order to move forward with a fully digital transformation, into a cloud-based banking services, model?
Nancy Kloser (
Yeah, I'm a little passionate about this one. I feel like the biggest hurdle that we have in the technology end to get to a an easy fully digital experience is I think the underlying technology. We all use systems that were not built, for in the recent in the century, right? So, we're constantly, using customizations and external programming and add-ons and things to get that digital experience. I think over the next 10 years, something's gonna have to break loose. I think that there's other, companies, other vendors that have, created a platform that is meant for digital that would support digital. I mean, we just talked about doing your own in-house programming. The reasoning, some of the reasoning behind that is having all of these systems that you have to piece together in order to get that digital experience. So, in my opinion, I think that, our large, vendors, that something's gonna have to change with their underlying technology in order for us to get a clean, fully digital mortgage experience.
Arcadio Lainez (
And, with that unfortunately I'm getting the Oscar's music right now, like get in the hook. But I want to thank everyone. I know this is a really important question and I hope we can answer it either in the booths or somewhere else, like as we speak. But I wanted to thank everybody for, being here today, especially our panelists for their participation and insights. Please come by the blend, booth, number 203 and over in the expo hall, to learn more about, Blend. And maybe we can run into one of them and they can answer the final question there that I kind of glossed over. So, thank you very much. thanks for being here and enjoy the rest of the show.