Independent Banker - July 2019 - 36

PORTFOLIO
TRENDING: LENDING
products like credit cards and mortgage
applications, " the more sophisticated
the loan is, the more issues [there are]
in moving it entirely to mobile. "
" I am quite focused on offering customers
the ability to apply for loans
through any online device, " says Brian
Otteman, director of customer experience
for $185 million-asset High
Plains Bank in Flagler, Colo. " Banks
now compete more on convenience
than any other means of differentiation,
and certainly the highest level
of convenience a customer can obtain
is service through their mobile
device. Moving forward, banks that
are also able to accelerate lending decisions
and deliver funding without the
customer ever stepping foot into the
branch will have a great advantage. "
High Plains Bank has been in discussions
with San Diego-based MK
Regulatory roadblocks
Perhaps the biggest impediment to mobile lending
implementation is regulatory.
" Creating that start-to-finish 100% mobile
application for all customer types can be complex,
but creating a mobile lending initial step can be easier
and still satisfy the customer's desire for immediate
and convenient action, " says Michael Scharenbach,
product lead for credit cards at Bankers' Bank in
Madison, Wis. He believes current regulations are not
clear about required disclosure statements delivered
electronically and physical copies for loan documents.
Tim Bedard, director of security product marketing
for IT security tech company OneSpan in Chicago,
says banks face a " highly regulated environment with
demanding business-to-consumer processes that
require the ability to transact quickly and compliantly. "
In the U.S., he says regulations are catching up with
technology and may accelerate the move to full
mobile loan origination. These include the Electronic
Signatures in Global and National Commerce (ESIGN)
Act; Uniform Electronic Transactions Act (UETA); and
S.2155, which includes the Making Online Banking
Initiation Legal and Easy (MOBILE) Act.
At the state level, Bedard says that remote online
notarization is undergoing change. It previously
required documents to be signed in front of a notary,
but now that can be performed via video conference
and a combination of driver's license scans and
electronic signature.
" Compliance and enforceability are major concerns
for FIs [financial institutions], " Bedard says. " Failure
to carry out each step in the identity verification and
agreement process according to the regulations of
a particular jurisdiction could lead to fines for noncompliance
from regulating bodies. Technology can
help FIs be more compliant with different regulations
via secure audit trails to prove that fair and compliant
practices were followed, and that applicants were fully
aware of what they were signing up for at the time of
opening an account or applying for a loan. "
Decision, an ICBA ThinkTECH Accelerator
finalist. Before CEO Har Rai
Khalsa started working at MK Decision
in 2015, he says its cofounders
worked for a retail finance company
that was " very paper-intensive, " which
inspired them to move to a more digital-focused
loan origination platform.
From there, the company partnered
with a community bank in Orlando,
Fla., for which MK Decision was able
to process 6,000 loan applications in
90 days with a three-person staff. The
company is about to pilot its mobile
loan platform with Bankers' Bank.
Leslie Parrish, senior analyst for
consumer lending at Aite Group, says,
" Banks cannot go all in on mobile
without paying attention to the bigger
picture. Even the youngest consumers
still value personal contact, especially
when they are dealing with more
sophisticated loan products for the
first time. "
Nonbank lenders have taken the
lead in offering mobile access to loan
products, Parrish says. " It's easier to
start from scratch with a greenfield
experience than layering onto existing
history. It's not the same acquisitions
over the years and making those disparate
systems work, " she adds.
Austin Kilgore, director of digital
lending for the research firm Javelin
Strategy & Research in Pleasanton,
Calif., says, " Community banks have
to understand that mobile and digital
tools are not something you can ignore
or cast off because your institution is
small. If they're not providing mobile
tools to borrowers, they're leaving
money on the table. "
Tim Bedard, director of security
product marketing for IT security
34 Q ICBA Independent Banker Q July 2019
Independent Banker - July 2019

Table of Contents for the Digital Edition of Independent Banker - July 2019
