Alex Kolodner: Compliance Needs Will Continue to Drive the Mortgage Industry

PERSON OF THE WEEK: Alex Kolodner is client operations manager for IndiSoft, a provider of compliance software to the mortgage industry.

MortgageOrb recently interviewed Kolodner to get his take on recent developments with regard to compliance and, in particular, vendor management.

Q: What has been the most significant development around vendor management this past year, and how will it affect business next year?

Kolodner: We have been working with state housing financing agencies, as well as small- to mid-size banks, to incorporate industry-specific needs into all of our software. The great thing about working with clients across a broad range of industries is that we can take methodologies of one industry and introduce them to another. The most exciting is always when we can create new synergistic solutions across industries.

Q: Where do you see the most development for next year? Compliance? Technology? Other?

Kolodner: Next year we plan to expand the compliance side of things to allow more advanced and configurable process compliance. As the compliance rules governing our customers’ audit procedures evolve, we want to empower them to be able to shape their company’s needs quickly and efficiently without having to necessarily rely on us to help configure the solution.

Q: How has the mandate for vendor management affected business?

Kolodner: Companies have developed applications to meet the needs required by government agencies. It validates the saying, “Necessity is the mother of invention.” In fact, our vendor management system was born out of the Consumer Financial Protection Bureau’s mandate. One of our clients approached us in need of a solution to reliably and securely track their new audit processes. We were able to work with them to develop the initial software, which has since evolved as additional customers came on board and needed more industry-specific features.

Q: What is the next big thing for your company in terms of innovation?

Kolodner: Compliance needs will continue to drive the industry and innovation. Next year, we are going to be spending a lot of time building out a wide range of process compliance tools. Our goal is to allow any company in the industry to easily get started with our software – configure the key metrics to measure, along with the associated quality expectations for those metrics, and then go live. Additionally, as employees rotate in and out of our partner companies, we will offer ongoing refresher courses so that our customers always have trained employees on staff.

Q: In which direction would you like to see the mortgage industry move?

Kolodner: Thus far, we have seen regulations move toward creating complex systems across virtually all industries with which we are involved. However, these systems are very rigid and not nearly as dynamic as they need to be. I’m reminded of a quote from the founder of VISA, Dee Hock, who famously said, “Simple, clear purpose and principles give rise to complex and intelligent behavior. Complex rules and regulations give rise to simple and stupid behavior.”

Our challenge is, on the one hand, to allow for – and at times help facilitate – the emergence of complex systems, while, on the other hand, steer those same systems away from creating brittle, rigid solutions that do not achieve the optimal benefits. Thus, my hope is that this trend toward creating a rigid regulatory environment eventually corrects – as we are actively promoting – and instead moves toward a more adaptive environment whereby we can empower all the stakeholders to reach win-win solutions.

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