On a large screen above the exhibit hall at the Fontainbleu, Wells Fargo CEO John Stumpf’s testimony in front of the U.S. Senate hovered above the crowd of financial service professionals and provided a stern reminder of the scrutiny the industry faces and the imminent need for an evolution to incorporate greater trust and transparency into every facet of its business. It was truly a surreal scene at this year’s ABS East conference in Miami as addressing increased regulatory and investor scrutiny was a common theme.
The Conversation: A Shift Toward Digital
Increasing trust in both documents and data was a message in a FinTech panel that included Stephen Bisbee, eOriginal’s president and Eli Stern of Ernst & Young and Scott Waterstredt of Metlife. Titled “FinTech Developments Affecting the ABS Market”, the session was moderated by David Kucera of Capital One Securities.
As noted by Steve, the asset classes and loan types in marketplace lending are not new. It is the approach by the marketplace lenders to easily enable consumers to engage and complete the loans for these transactions for these asset classes that are delivering enormous values. Recently there has been a paradigm shift in marketplace lending to address the needs of investors.
Technology provides ease and speed to both consumers and the investor, which enhances visibility into the process and increases transparency. In addition, technology enables investors to verify what is being purchased is properly represented. Through technology, each document would have a trusted audit log of all actions taken and by whom regarding that document as well as the transaction. Similarly, the data utilized to create documents cannot be altered without detection. Both investors and regulators require lenders to demonstrate certainty of ownership and control of digital assets.
The Time for Digital Technology Adoption is Now
Enabling legislation such as ESIGN, UETA, and provisions of the Uniform Commercial Code have been in place for some time, and have set the requirements for the management of digital financial assets and their sale, to enhance confidence and acceptance from investors, who continue to show deep interest in the MPL space. Having digital technology that complies with these regulations is imperative.
To increase investor confidence and address concerns, processes and technology must be adopted to adhere to these best practices and alleviate risk with greater transparency and stricter requirements for managing digital financial assets and the associated information and data. Fortunately, we are at a point in the evolution of financial transactions where technology exists to make all of this possible.
Needless to say it was a jam-packed three days; however, we enjoyed participating in the conversation at ABS East and can’t wait until next year! If you didn’t make it to the conference, but would like to hear more about Digital Transaction Management, sign-up for our upcoming webinar, Building the Business Case for Digital Transformations: Act Now or Get Left Behind.