Exclusive Interview With Mike Gardner, CEO of Agreement Express: Onboarding Process & Blockchain Use Case in the Leasing Space

Agreement Express is well known to the payments industry as a leading provider of onboarding and underwriting automation and is disrupting the way traditional financial services providers are servicing their clients. Agreement Express has worked with Fortune 500 financial institutions, merchant acquirers and super ISOs like Cayan, Global Payments UK and Mercury Payments to help deliver incredible customer onboarding experiences. As a customer onboarding and risk management expert, Mike Gardner, CEO of Agreement Express, has worked with enterprise-level clients to improve customer acquisition and process challenges. We had an opportunity to chat with Mike about Agreement Express’ approach in the onboarding and underwriting automation process.

LTP: How does Agreement Express’ underwriting feature work? Is it similar to DocuSign? How is your underwriting feature secured?

Mike Gardner: DocuSign is a digital signature platform as opposed to an onboarding platform. The digital signing process of a document is really a tiny portion of the entire onboarding process. During the onboarding process, we gather a massive amount of information that we use for a whole variety of purposes. Some of the information we gather is Know Your Client information while some of the information is gathered for regulatory and legislative reasons. A part of the information is also captured for underwriting and approval. Not all of the information and processes require signature. So digital signature is just a small piece of that whole transaction of actually onboarding the client.

In our case, Agreement Express is a very different platform than DocuSign. While onboarding, we capture all the information and we not only assemble it logically so that it could be used for next client interaction but also we channel it automatically for the purpose of risk scoring during the process. We then represent all the data in a manner that is relevant to the underwriters. We enrich that data by going to external third-party services. For example, I might go to Equifax for a credit check or I might go to MasterCard MATCH for knowing if a merchant is flagged. After that, there might be some addition of manual data that the underwriter may need. Then we also calculate a numerical score for that merchant which becomes a determining point for our clients to see if that merchant is above or below their threshold to pass or decline. All of this happens very quickly. Acquiring merchants is much more than just gathering their signatures. It is actually going through an entirely mechanical process, which included underwriting process as a part of it. In short, merchant acquiring should be faster but quality should not be compromised. The quality of underwriting cannot be compromised while you try to achieve the speed of acquiring the merchants.

LTP: Apart from underwriting, what are the key technologies used by Agreement Express? What have you specifically been using for your clients in the payments industry?

MG: Specifically for payments, what we have been working on is leveraging all of the collected data to create more predictive analysis. Some of that is related to risk scoring because we want underwriters and underwriting teams to be able to do things like What-if analysis so that they can tune and optimize their real-time risk models and adjust it to changing market conditions or capitalize on emerging opportunities. What we have seen happening in the payments industry is that the financial services firms are becoming full-service companies. They have a wider range of products and services that they are offering to the merchants. They might want to sign up those clients for big data, analytics or different point-of-sale types. As our clients are broadening the services to offer to the merchants, we are offering more and more solutions to allow them to quickly plug that into our platform to affect those transactions.

LTP: Every business comes with risk and a possibility of fraud. There could be a leakage in every system. What’s the risk in Agreement Express’ system? Have you experienced something like that in the past? How do you deal it?

MG: Interesting choice of words! If you look at our system and our business, what we are all about is trying to reduce risk for organizations. For us, one of the riskiest things for the clients to do is to try to add in speed by giving up on the integrity of their processes. We provide so much visibility into processes that otherwise were manually done or human-driven and hence, that risk exists all the time.

We actually end up reducing the risk materially because every single client interaction we are doing is now visible. They can see what actually happened. For example, they can tell that you affected the order from this particular computer or from this particular office to send new terminals to merchant X and so on and so forth. So, on the other hand, by giving them this kind of in-depth visibility, we actually reduce the risk materially for organizations materially because they can technically audit everything. When we constructed Agreement Express, we wanted to construct a platform that gave accounting system level of integrity to every customer interaction that was going on. The exposure of fraud is just a reality. The issue isn’t necessarily how do we stop it? but how do we give you a chain of evidence to quickly determine what is real versus what is fraudulent.

LTP: Is Agreement Express looking forward to taking some initiatives in blockchain technology?

MG: Not only are we researching on blockchain technology, but we are one of the leading pioneers in that area. We have been applying blockchain concepts in the field primarily in the leasing space for the perfection of security on electronic chattel paper. Today, blockchain is less important for the payments industry but certainly important for the rest of banking. Whether you are a leasing company that is in possession of a chattel paper that you are trying to sell to a funder of securitizer or you are a funder trying to have the most efficient transaction at high integrity that you can’t with an organization that is trying to sell the electronic chattel paper, we believe that the blockchain technology can help. We have already got the implementations of that in place in the field. We have embraced that as the direction to create efficient and nimble banking transactions. Blockchain is actually perfect for the Agreement Express platform. Enhancing that whole interaction between funders and borrower using blockchain technology is spectacular. It is more than just having a public ledger. It is all about the efficiency of transactions on top of that ledger that comes with blockchain. You excited me by asking about blockchain technology. We are really into blockchain technology and it is a huge area for us.

LTP: Any last thoughts to end the interview?

MG: We look at big banks differently than most of the organizations do. As banks are moving towards digital banking, they need to be able to innovate and adjust quickly. They talk about how creative and ingenious Silicon Valley is in disrupting banks. We encourage the big banks to understand that Silicon Valley isn’t about innovation; it is about their ability to iterate their innovations quickly. Our job is to give big banks the ability to iterate just as fast, if not faster than the Silicon Valley companies. The banks have fantastic people with fantastic ideas. What they are lacking are the tools to get the ideas to the market faster than the firms that are trying to disrupt them. Our job at Agreement Express is to get them the tools so that they can take these to brilliant people with brilliant ideas and they can get these ideas to market faster than disruptors. To me, if the traditional banks have the right tools in their hands, we can see a lot of innovation from them. There is no reason that why the big banks can’t innovate and our goal is to make them understand that.