It is often said that most businesses fail within the first 10 years of operations. Well, Sam Kaddah has reason to break out the champagne – his Independence, Mo.-based Liquid Logics LLC just marked its tenth anniversary, and its future looks bright and prosperous. Kaddah took time from his tenth anniversary celebrations to discuss the first decade of his business.
Q: This year marks the 10th anniversary of Liquid Logics. When you began your company back in 2004, how did people react to the notion of “cloud computing” in regard to loan origination systems?
Sam Kaddah: At the time we started, the term “cloud computing” hadn’t even been coined yet. We were considered a “Web-based Application,” one that many considered a forward thinking outreach platform. At that time, the notion of taking the loan application and then performing the underwriting and borrower qualification on the web was largely considered a sales opportunity, a better tool for connecting community banks and brokers, a way to grab market share.
I recall that there were some mixed feelings among some forward thinking executives, some of whom thought that web-based applications, marketing and engagement were a tidal wave that was coming soon and others who had decided that the “mortgage process is complicated, heavily dependent on loan officers and manual processes.”
Q: There have been some concerns raised about the security aspects of cloud computing. To be frank, is cloud computing any safer or less safer than traditional computing systems?
Sam Kaddah: There are several things to consider here.
First, one could argue that the reach the web provides makes you vulnerable to anyone on the planet, but frankly the security measures in the cloud are far stronger than what the individual banks can afford on their own, in terms of skilled resources to secure assets and 24/7 monitoring and surveillance capabilities (to detect any potential intrusion for immediate and timely countermeasures).
Second, the individuals today who advocate the use of local applications are also on the web. They have to be to provide the kind of collaboration features that modern business demands. The only difference is that the security challenges they face in their attempts to secure a local application are much more complex than those faced by cloud computing. This is also true of old guard applications in our industry that pretend to be cloud based but really are not.
Finally, I believe that the security objection ship has sailed. Our personal information is already in the cloud. We’re already there. And so are our businesses. By necessity. But it is great that we continue to focus on improving security, raising awareness of the risks and driving positive behavior on the web. If I may opine, I would assert that this focus on security issues improves awareness, drives market transparency and creates a positive atmosphere, ensuring a more secure environment than what we ever had in the past using old applications and local security that was regularly infringed upon, even though we didn’t hear about it as often.
Q: The industry has a tradition for being slow to adopt new technologies. Do you see that stubborn reluctance to change disappearing, or are there still those in the industry that prefer old-fashioned tech strategies?
Sam Kaddah: The resistance to change from the current structure will always be there. It’s human nature. The question, in my mind, is who is going to be leading the charge into the future, where we already see a generation of borrowers, ready and willing to do business in the cloud? I believe the next generation of lenders will figure this out and deploy applications that provide interactive communication to ensure effective collaboration between all parties – the borrower, lender and real-estate agent. These lenders will leverage new media and channels – such as mobile – to provide a level of self service that will leave the stubborn segment of the industry in the dust. It will not be much different from what Google, Facebook and Travelocity did to change their market segments: total disruption of the status quo in favor of a better way of doing business. The new “Mortgage Travelocity” will change the business, gain market share and leave the stubborn originators far behind.
Q: What are your plans for the company over the next 10 years?
Sam Kaddah: That one is simple: become known nationwide as the new “Travelocity for the mortgage industry,” the firm that changed the way this old dinosaur of an industry operates. Not only on the front end, where borrowers have access to easy modern tools and interfaces, but also the back end, where loans are aggregated and delivered into the secondary market, where investors can trade those loans and even fulfill the TBAs. The technology exists today to accomplish this and we’re the company that’s bringing it.
Liquid Logics is online at www.liquidlogics.com.
Phil Hall has been (among other things) a United Nations-based radio journalist, the president of a public relations and marketing agency, a financial magazine editor, the author of six books and a horror movie actor. Also, as you will discover, he is not shy about stating his views.