For years, e-signature technology was hyped as the future of the financial services industry. It appears that the future has arrived, as e-signatures are becoming an industry standard. To explain the current state of e-signature solutions, we spoke with Bill Brice, CEO of Dallas-based AlphaTrust Corp. and 2014 Chairman of the Electronic Signature and Records Association (ESRA).
Q: The e-signature technology has been around for years, but it seemed to take the mortgage banking industry a long, long time to embrace this technology. Why was the industry so slow in accepting this solution?
Bill Brice: There are several aspects to this. I once had someone from Fannie Mae explain that a new mortgage touched, on average, 300 hands before settling into regular servicing. That is a lot of parties that have to accept, agree, and be comfortable with electronic signature processing for mortgage documents.
Of course, the turmoil of the last six years in financial services generally and mortgages specifically did not help adoption. This is a slow, but inevitable process. The payoff for all parties is easy to demonstrate. The direct financial savings from eliminating manual processing, much driven by the need for signatures, is quite large, but the real “killer app” aspect of this is the ability to create a terrific user experience for borrowers – after all, they all hate the paperwork.
When you can differentiate yourself with a superior all-electronic user experience you will gain more business. With the average age of a first time home buyer at 31 years old these digital natives don’t want to deal with paper and will work with lenders who can provide “an app for that.”
Q: How is the new FHA policy change regarding e-signatures going to impact the way that the industry operates?
Bill Brice: FHA’s support for electronically signed documents will really help accelerate adoption and implementation. With more buyers of electronic notes and electronic mortgages files in the market, it really creates incentives for originators and lenders to move forward. Last year the IRS started accepting electronically signed form 4506-T. So now, the full process from application through closing can stay electronic with support, of course, for scanned documents where needed.
Q: You are the 2014 Chairman of ESRA. What have been some of the more challenging projects and campaigns that the association worked in this year, and what have been the results to date?
Bill Brice: Well, as I discussed above, nothing moves quickly. Our work with the FHA on eSignature dates back to 2009, and we’ve worked with the IRS since at least 2006. Having served on the Board of Directors since that time, I’d say we are really just continuing a long, sustained push to remove barriers to the adoption of electronic signatures and electronic records.
The FHA announcement was obviously a big win. In addition, we moved our annual conference from Washington, D.C. to New York City last year when I served as the conference Chair. We doubled the attendance and had a terrific event. The eSignRecords Conference is the single best place for anyone to learn about all aspects of electronic signature and records: legal, regulatory, risk management, implementation, and case studies from our end user member organizations. It will be held this year November 12 and 13 in New York: http://www.esraconference.com.
Q: Some of our readers may not realize this, but you co-founded Brice Foods, which is best known for the I Can’t Believe It’s Yogurt stores. How did you get from yogurt retailing into e-signatures?
Bill Brice: Yes, that does seem unusual. But there is a common thread. I’m one of those serial entrepreneurs who like to build things to solve problems – that includes building companies and technologies.
At I Can’t Believe It’s Yogurt we built a chain of 1,500 locations in 43 countries with our own manufacturing operations, which I designed. Creating delicious yogurt flavors was a lot of fun. But we also built our own software technologies to manage those operations and I’ve always had a love for using software to solve problems, especially annoying ones like paperwork. So I created AlphaTrust to do just that and we’ve been at it for over 15 years.
The payoff is the same – before it was wowing customers with great yogurt flavors, and now it’s wowing customers when all that pain of paperwork goes away, not just for them but, importantly, for their customers.
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.