Rob Pajon: Mortgage Servicers Need Technology That Adjusts to Business Cycles

PERSON OF THE WEEK: Rob Pajon is senior vice president, marketing and product, with U.S. Real Estate Services (USRES), a company focused on REO disposition and valuation technologies – in particular, its proprietary software platform, RES.NET.

MortgageOrb recently interviewed Pajon to get his take on technology in the B2B space and where default servicing technology is headed in the future.

Q: What role does technological innovation play in the B2B space?

Pajon: Whether you are talking about B2C or B2B, innovative technology is the driving force of our modern world. The difference, however, lies in how they are perceived. Consumers see a new product come to market, and the desire to own that product is tied to status, cultural signaling, exclusivity or other emotions.

Businesses, on the other hand, tend to think of technology more as a utility serving their needs to keep up with competition, find efficiencies and/or reduce overhead. Technology has always served to improve the lives of its users, and today is certainly no different. However, as the tools available continue to improve, our expectations have also increased, and today’s servicing operations expect more than just efficiency. They demand the implementation process be seamless and plug into existing technology with no downtime or loss in productivity.

Although the reasons why people invest in technology differ between B2C and B2B organizations, there are some similarities. More and more, we are seeing consumers demand not only a constant stream of new products, but they also insist that these products are built on the principles of intuitive design and are simple to use without a complete understanding of what is happening in the background.

Similarly, purchasers of B2B technology need technology solutions that simplify their operations and oversight requirements, and do so in a way that is turnkey on day one, intuitive to navigate, and allows them to create rules and processes that run in the background.

Q: From your 10 years of experience, what are some standards you can share for research and designing new products?

Pajon: In my opinion, it all starts with the customer. Truly understanding their pain points, and working directly with them to address these issues remains one of the most necessary and overlooked standard practices in our industry. By partnering with a sponsor company from the beginning, we ensure we are meeting the actual needs of the market. This enables us to launch new offerings that generate interest right off the bat.

Through this model, we also ensure that all new products have been tested, analyzed and revised to adhere to real-world scenarios. Meanwhile, the sponsor gets to provide input on the design of a tool they will be using on a daily basis, so it’s a real win-win for everyone.

It’s important to note that while this is a collaboration, the technology provider must always keep the greater market in mind. Partnering with a sponsor does not mean creating standalone systems for each client. Research must be done to discover which aspects of their operation will be universal to all users and which need to be built in a configurable manner so that each organization can customize the tools to best serve their needs. Ensuring that the technology remains open-ended is the key to ensuring its value for future customers.

For us, it’s also important that the relationship with our clients isn’t limited to just beta-testing new products. We want to get data and input from every customer as the product expands its reach, and this is best done through the product, account management and sales teams.

The product department’s role is to investigate the competition, research broad market trends and survey existing customers. Account managers speak with clients on a daily basis, so obviously they are an invaluable resource when it comes to the ins and outs of each client’s specific operations. The sales team is out there speaking with potential new clients and constantly gathering information, while the development team works on sizing the long-term road map and projecting a realistic cost-benefit analysis for all proposals.

For this process to work correctly, it is absolutely critical that you create and maintain unity between the various departments within your organization. Each department needs to not only have a clear understanding of its role, but also how it fits into the larger picture. With this framework in place, each segment of the organization will be able to articulate the needs of the customer in an effective manner, with the result being a technology solution that starts off on the right foot and continues to grow and improve as it gains more traction.

Q: How has this changed during the last 10 years?

Pajon: Creating a unified organization that partners with customers is a key part our philosophy. While this idea has not changed over the years, its implementation certainly has. The last 10 years have seen an influx in the importance of data, and as a result, the tools to collect and analyze this data have grown as well.

Instead of using spreadsheets and having individuals track trends, these tasks are now outsourced to technology solutions that can give us real-time insights. We can also create more complete user profiles, and in doing so we are aggregating not just macro trends, but also forming a more complete picture of each individual client as their needs change and evolve.

These individual profiles can then be cross-referenced against industry trends to determine the most profitable way to allocate development resources. The use of these new analytic tools has enabled us to stay true to our underlying principles while continuing to constantly refine our offerings.

The prevalence of niche tech providers offers larger organizations a third option in addition to the traditional buy-versus-build dichotomy. The third, and often most direct option, is to license existing tools and bolt them onto your centralized platform. In this way, one can give customers access to an established product that serves their immediate needs instead of waiting for it to be built and released into what may turn out to be a completely different market.

Q: What is the hot button for decision-makers today?

Pajon: As in recent years, compliance continues to drive much of the conversation for mortgage servicers today. A mortgage servicer’s decision-maker knows that the burden of regulation ultimately falls on them, and as a result, they are looking to internalize the operation and rely less on third parties. To achieve this, their FTEs need access to more data and analytic tools, allowing them to streamline the decision-making process.

Ultimately, the role of technology is to simplify the process. Since we are in an industry that is cyclical, and we see compliance demands change quickly, you need something that can be augmented in real time to meet those ever-changing requirements and internal needs.

A solution that is highly configurable will prove the most beneficial and allow servicers to effectively mitigate third-party risk no matter what the future may hold.

Q: Where do you see default technology going?

Pajon: While it is tempting to look at current trends and historical cycles and try to predict the future, it must be done while remembering that we really cannot know what will come and, more importantly, exactly when it will come. Because of this, we need to prepare for a multitude of outcomes, thus ensuring profitability in any future environment.

One way to do this is to build out only the aspects that we know need to be in place regardless of changes in the industry. This enables us to move toward our goal while not going down any stray paths. Simultaneously surveying users to more accurately define commonalities and outliers between their organizations is also an important factor. Continuing to define the process ultimately lets us know which portions of the product should remain static and which should become dynamic to allow for individual user customization.

The key to maintaining this level of flexibility lies in your underlying software architecture. From the ground up, software needs to be designed in a way that provides agility to both the tech provider and the customer at an individual level.

In this way, small changes can be applied to address issues as they arise, and large-scale disruption to operations can be avoided. The best part about a flexible system is that it allows the end user to bypass development cycles, which can eat up both time and money.

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