CHICAGO and NEW YORK — The onslaught of online lenders shook the world at the end of 1999 and beginning of 2000, or at least that’s what they set out to do. Then reality set in, and the bubble of hype burst — few lenders or borrowers are going to take a chance on a highly complex, high-dollar transaction done entirely on the Internet.
So, if you can’t beat them, offer a value-added application that makes life easier and more profitable for everyone, right? 2000 brought the advent of the applications service provider (ASP), notably New York-based CapitalThinking’s Bluewire application, which streamlines the financing process by allowing mortgage bankers to prepare loan packages online, match borrowers and lenders using a database, submit the package electronically and then receive quotes.
Applications such as Bluewire are run from a central Web server. That, in and of itself, provides a high-quality application, as well as cost savings because users do not have to invest in the kinds of commercial-grade servers, engineers, programmers, etc. it would take to run such a system on their own, said Dan Woods, CapitalThiking’s chief technology officer.
Woods boiled it down in simplest terms: "Bluewire’s like a health club," he said. "You don’t go out and buy a Cybex and stick it in your home. You go to Equinox, and you have a membership and then you have access to 20-times more equipment than you could ever afford. That’s very much what the ASP model is all about."
Now, the year of reckoning is upon us. 2001 is the year for execution, the year to find out what products really work, Woods said.
J.P. Morgan was the first to use Bluewire, and now Chicago-based Cohen Financial will use Bluewire to provide online data collection, loan packaging and lender database management. For Cohen, Bluewire is part of a larger initiative, Vanguard, a complete re-evaluation and re-engineering of the company’s systems and processes. The big idea: streamline the process so the company’s star producers can spend more time doing what they do best. Cohen picked CaptialThinking’s Bluewire ASP because it was the best fit for the Vanguard initiative, Cohen COO Terry Moore said.
"[Bluewire] is going to bring a level of efficiency and standardization to our practice on a national basis," Moore said. "We think it’s going to make things easier and faster and allow our sales people to focus on their strengths — the customer touch and bringing technical expertise and real estate dynamics to the table as opposed to focusing their efforts on the packaging side of the business."
Cohen has begun the rollout of Bluewire, and plans to phase it in over the year. Moore doesn’t live in a fairy tale world, so he knows any time a company adopts new technology there will be a few bumps in the road. Still, the buzz at Cohen is palpable.
"Any time you bring change to people there is a natural resistance, but we believe that an amplified communication effort will overcome a lot of the initial hesitation," Moore said. "We’ve always worked off of a different paradigm than the rest of the industry where we emphasize the sharing of information and the collective efforts of the greater team rather than the individual producer in the organization. That’s always led to a much higher level of production per ball player than what we typically see anywhere else."