Welcome to the 6th episode of the #AskAPrivateLender Podcast brought to you by Mortgage Automator. In this episode, we are talking to one of our partners—Filogix—a part of Finastra, one of the biggest companies in the Fintech industry.

We sat down with Ryan Spence, the Lead of Filogix’s broker channel. Ryan has been a known figure in the Canadian Mortgage Industry for the past 20 years and has great insights to share. We talked about the changes in the industry that have been happening lately, where this evolution is going to take us, how this can be a win for borrowers, brokers, and lenders, and so much more!

Listen, watch, or read the interview below. And stay tuned for more episodes coming up!


Lawrence: We are really excited to have you come by. Considering the new changes, obviously, everyone wants to hear directly from the source what’s been going on. But before we jump into that, let’s talk about your role with Filogix and how you got there. You lead the broker channel. What does that mean? What are you in charge of? Who do you deal with?

Ryan: It’s definitely a good question. My typical answer is if the words ‘broker’ and ‘mortgage’ appear in the same sentence, then that’s in my responsibility. I run the team of one, which is me, on the broker facing community. So basically, if you’re a broker, coast-to-coast, there’s a large chance that you’ve dealt with me setting up your brokerage or with questions, or as you’re moving around. Or if you’ve got questions on what happens in the industry, there’s probably a chance we’ve chatted in the past. I’ve been with Filogix for about 20 years. So there are brokers that I’m dealing with today that weren’t born when I started. And others that were my age who are now retired. It’s a good cross-section of everybody in the country.

Lawrence: You’re seeing people come and go.

Ryan: Actually, yeah. There are kids of brokers I dealt with 20 years ago who are now brokers themselves, so there’s, I don’t know, some sort of generational switch that makes me feel far older than I really should be.

Lawrence: So, Filogix is a technology company. I don’t know if you guys consider yourselves a tech company per se, because you’re so heavily involved with brokers and the broker market. Do you come from a tech background prior to Filogix?

Ryan: No, my story’s probably a bit different. I have a degree in Evolutionary Theory, I’m trained as a biologist. I went to the University of West Ontario in London, this was 20 odd years ago. Biology and ecology, and environmentalism weren’t quite as important as they are today. I did a degree in biology, did some field research, and then focused on ecology and evolutionary studies. That didn’t pay the bills as well as you might expect despite its awesome-sounding handle. I spent three months working on a contract, and the last two weeks of any three-month contract trying to find the next three-month contract. Rent and food became a bit more of a priority. I had to make the switch.

It just so happened, I was playing hockey with a guy I’d gone to school with who was working at this little company called Centric Systems. He said, “Hey, we need someone on the help desk. We’ve lost one of our staff. And you’re looking for a change of job. Why don’t you try it out?” So 20 odd years ago, I started working as a help desk rep in what was then the Centric Systems. Which ultimately became the precursor to all of the various iterations of the company that you’ve seen until Filogix has arrived.

I want to say in the 20 years, we’ve gone through about seven purchases or sales and changed the names a bunch of times. Fortunately, my phone number’s stayed the same throughout the entire stretch. I always figure as long as someone has my number, regardless of what the company’s called, they’ll be able to get to me. Now, after 20 years from Centric Systems to Filogix to DNH to Finastra to now, Filogix, a Finastra company, I’ve had a lot of different logos, but at least the same phone number for the whole time.

Lawrence: And you are consistent with the company, no matter who’s buying, selling, changing names. You’re still around. People know who you are. They’ve met you over the years. You’re quite familiar with a lot of the aspects of the system. So people can definitely rely on you for help and assistance.

Ryan: I think that’s one of the things I really like about the broker channel is it is very familial, right? There’s so much history I’ve got with a lot of people. They ask for help, they call and say, “Can you help me?” Any time one of your friends calls and asks you for help, it’s something you really want to do. It’s very satisfying to be able to help your friends when they call, and that’s kind of what it feels like on a day to day basis.

My role has changed, as, of course, the industry’s evolved and the brokerage community, the technology’s evolved. My role has evolved as well. My job changes every 18 months to two years just because that’s the nature of change within the industry and within the community.

Lawrence: Let’s jump into the private mortgage space. It’s definitely an area that’s been growing rapidly over the years. How long have you guys been looking at that space and saying, “We know brokers are using our technology. They’re printing the apps, they’re printing the bureaus. We need to do something about this for security and transparency to the borrowers themselves, for Equifax requirements, and so forth.” Is this something that’s been on your radar for a very long time and it’s only just come to a point now to make a move on it?

Ryan: Years ago we did have software that was used by a fair number of private lenders, and for those who’ve been around for a while, you might remember the old Lender Base software. Which was kind of the lender equivalent of the Mortgage Base software that the brokers use. This is going back 15 years. 

Lender Base was more on the institutional lending side. But just as it got older and the technology advanced, those bigger companies needed more aggressive and more enterprise-level software. The Lender Base solution just kind of drifted down to the smaller lenders. A lot of them were private lenders. Then that worked for a little while. But then, at a certain point, and really it was when the CASL legislation came in, that became the end of the Lender Base era. Because a lot of lenders were using that to distribute email and CASL kind of kiboshed all of that. The Lender Base software was pretty old. It didn’t really have a replacement. So it just kind of died off.

But one of the things we tried to do, and this is going back six or seven years, was to find a solution that would appeal to private lenders who didn’t have a large budget for technology and each had some different need for that technology. Maybe 80% of their elements were kind of core. But the other 20% were highly configured or customized, so it became hard to build a piece of software that would suit a lender’s technology needs at the price they were willing to pay back then.

Most lenders are still using an Excel spreadsheet to do stuff. They are emailing stuff back and forth. They just didn’t have sophistication internally, and they didn’t need it at the time. But as more and more volume went to that private space, and certainly, we’ve seen a tenfold increase at least over the last maybe 6 or 7 years in that private space, the need for those lenders became more prevalent. 

This is where other companies like Mortgage Automator were able to step into that. Because you did have that experience. You were able to build a slightly cheaper element for a niche of lenders who needed a more robust technology, who are now to the point of being willing to pay for that for their entire business operation, not just the acquisition of the file. So certainly the partnership with Mortgage Automator allowed us to get back into that private lending space in a bigger way. Because certainly there’s a lot of value in the broker community having nice, secure, easy access to a host of private lenders in the same way they do with institutionals as well.

Joseph: It is actually interesting how this all happened. I feel like all the stars did align all at the right time. When Lawrence and I had met Tim originally at one of the CMBA retreats, you guys were already talking about moving to the digitization world, and we had just started acquiring clients onto the platform. Then Equifax comes out with these rules, literally within a few months.

There was very little time for people to actually figure out what was going on. I have to say, the stars did align really well. Because in such a short period of time, there is now a true proper solution for not just the big guys who were the original people who did sign up with you. I remember back in the day, there were four or five guys in the drop-down menu. Now you look at it today, there are almost 100 private lenders.

Ryan: Even more actually, I think we’re at 140 now, give or take? And certainly, we’re adding more. There’s definitely much more need for the lender to be connected. But there’s also much more realization from the lender that yeah, that’s just kind of the way business is now, that security is important. You just have to have that as table stakes. I always think, when you’re a broker, or even worse when you’re a regulator, when you look at the transaction, you’re not really looking at who the lender is. You’re looking at how the consumer’s information is handled? What protectants were in place? How did that broker manipulate the information? Where did they send it?

The lender almost becomes a little bit less relevant in the transaction because a regulator expects you as the broker to handle every consumer, and therefore every lender in the same way. I think lenders are recognizing that as well, as they see consumers also looking to ensure that all of the people in the transaction are holding their information well. Just like you and I would expect that of one of our colleagues or when we go to apply for whatever. We expect our information to be held well by the company we’re buying from.

Joseph: Right. But it is surprising that so many people in such a short period of time have jumped on board. Because there was a lot of noise being made saying, “Not doing it. Going to keep doing it the old school way.” I’m not going to mention names, but I remember talking to a lot of people in the industry about it, and now I look at the drop-down menu and I see their name on that list now. 

I feel like whether they wanted to fight it in the beginning because of the beeps, I think they’ve come to realize that it’s not about the money. It’s actually about the ease of receiving that business and from a competitor’s advantage, they don’t want to seem weak optically to the brokers and to their competitors by not being on the platform. You’re almost doing yourself a disservice by not being on the platform.

Ryan: Yeah, I think historically we have some lenders that would want to be on the system because it gave some social evidence that they were noticed and good, and trustworthy, right? You’re on the system, therefore you must be a good lender. And on our side, we do a lot of validation on who’s part of our network. We like to have good partners that are ethical and trustworthy. That’s kind of the goal so that when you come into that network, you have that inherent trustiness of what’s inside the network.

I think everyone kind of realized that that’s a good place to be. Because there was a fair amount of communication going out, and everyone was kind of getting that message roughly at the same time. So everyone’s thought process was happening at about the same time. 

I think because there were going to be a lot of changes, the lenders knew it was coming and they could kind of see it a few months down the road. They had enough time to think about their strategic objectives as a business. Not just, “How do I get the deal in the front door? What’s the cheapest way to do that?” But, “What tools do I need to actually run my business from stem to stern?” 

Isolate each of the steps of the transaction, determine where I’m efficient, where I’m not, where I could be more efficient. And if I can save dollars over here at the backend of the transaction, then maybe I’m more efficient overall. I can do more business. I can be more profitable, more productive, even if that costs me some dollars per month if I’m saving the human cost of doing that, or redeploying my human costs from basic data entry to becoming a trusted advisor, or data mining, or soliciting business. That is far more profitable for me as a brokerage. So my return on investment in this technology is much more than I would’ve expected.

Joseph: Yeah, I think that’s where a lot of our clients really saw the value. They looked at it and said, “There’s obviously a cost to being on the platform to receive the business from Filogix.” But what they realize is someone still has to be paid, or they themselves have to mainly import that information into a system to generate the docs or mainly prepare the docs. 

I think they sort of realized, “Well, if I could digitally receive everything and it shows them beautifully formatted for me, it’s saving me 15, 20 minutes of data entry. If I’m doing 20, 30 deals a month, they’ve got to start running those numbers and realizing it could be thousands of dollars they’re saving in man-hours by doing it this way. I remember we’d get phone calls, in the beginning, saying, “We’re not paying for this, we don’t want to do this.” We’d say, “Okay, don’t.”

Lawrence: I agree with you. It’s that, but it also creates a proper process for a business, right? Being a private lender, previously, if you were not on a platform to receive deals, you had one employee in the company who’s receiving these deals via email, or you have some random email address set up that everyone goes in and checks to see when the deals are coming in. It’s not a viable solution to running a business.

Joseph: Or to scaling a business.

Lawrence: You need a platform where the groups of employees or certain employees have access to seeing the new deals that come in. They can underwrite it, the details and the data is right there in front of them. There are no errors. There are no mistakes when generating docs. I mean, it just makes it easier to run your business.

Joseph: I think the other part of Filogix and Equifax, and this partnership as well, is providing relief to the lenders. That the credit bureaus they’re getting, are exactly what they’re supposed to be.

Lawrence: Ryan, I don’t know behind the scenes, and I’m not involved in conversations that you guys have as a company. But is this just stage one of an ultimate goal? Are there other things rolling out in the future, or thoughts, or ideas that you guys have that you want to implement?

Ryan: Yeah, certainly, it’s an evolution of the system. I go back to when I started 20 years ago when communication was done on modems and phone lines. That just had replaced faxes, which had just replaced me walking over to the branch with my application in a file folder. So I went from file folders to faxes, then to faxes that didn’t have a roll of vellum on them, then I had a way to electronically send this on a phone line. Then I went to “I can send this on the web, but it’s a local database on my machine.” Then I went to this web-based thing. Now there’s consumer information I have to consider and laws have come in place since then. I’ve got to consider all of these things.

So you’re right. Ultimately this path has taken us from, “Hey, you could write whatever you wanted and kind of wave it in the streets and no one cared,” to “Yes, we do need to be very careful with consumer information.” It needs to be handled securely and transparently and compliantly. 

Again, that requirement will continue to increase. Ultimately, collectively as an industry, we’re on the path to ensuring we are on that secure and transparent, and compliant process. We also want to make that a nice, easy transaction as much as we can. Because certainly, the need for security and transparency, and compliance tends to be at odds with the ease of transaction. The more things you have to account for, the less it is efficient to do so. So we’re trying to make that bridge. 

Now, you need to have an Equifax account and be validated as a lender to receive these bureaus securely, and that handles that part of consumer information on the agent side. “Look, I still am responsible for handling my consumer information well. I don’t want to store all these consumers’ documents on my laptop. If my laptop gets stolen, I could be in big trouble. I still don’t want to email consumer information that’s supposed to be held securely in an insecure manner. I don’t want that to be intercepted and I don’t want my consumers to be maybe victims of identity theft because I’ve handled their information poorly.”

So certainly security in a system allows that. It takes that risk away. And as we see more brokers, lenders, even individual agents looking at their risk management, that naturally just falls to, yes, the way to handle information securely is to actually make it secure. Be part of the network that stays within that network so that all the people that need that stuff can get to it in a secure manner and you can track what’s happening.

So ultimately, yes, more changes in the future, I would think. They’re all geared around how do we protect the consumer information, how do we make an efficient and secure transaction. Because everyone should be able to be transparent about what’s happening. From a brokerage, from a lender, when a regulator looks at it, ultimately you want to ensure that whoever looks at you, you’re able to say, “Yes, I did things openly and transparently, and I protected my consumers’ data while I was doing an efficient transaction.”

Lawrence: What are the brokers saying currently? Do they like this integration? Have they found it easy? Have they been giving you feedback?

Ryan: Certainly, I’d say yes. It gives them more choice with a single click of a button. From a regulatory point of view, the lender doesn’t really care what lender is being used, as long as you’re handling consumer information properly. On the brokerage side, if I just look up the lender and click a button, and everything gets sent over nice and securely, that’s easier for me as an agent. There’s less involvement than me printing something, and saving it, and emailing it, and following up with the email to make sure they got it, and then waiting for an email response and doing more manual tasks after that.

If I can push a button, it’ll go off to the lender. The lender adjudicates it and then returns. I can just push another button to say, “Great, that’s what I want.” It’s easier for the agent. And as we have more integrated contact management workflow tools coming into our marketplace, when we think about the lender integration, we also do a lot of work with contact management, workflow companies as well. That information is available to be loaded from our API solutions from Expert to the broker’s world. If those things are happening automatically and easily in  Exper, they also then can be automatically and easily uploaded or worked on in that CRM, in that workflow tool.

The thing I can do with two buttons in Expert that saves me potentially additional work later on down the road in the CRM workflow tool as well. When we look at brokers saying, “Yeah, this is pretty convenient,” it generally is because it’s less work for them to manipulate the data and to manage it from a brokerage’s point of view, which is kind of different than a broker as an individual agent, they’re thinking more transactionally. Which is their natural role as a brokerage. They’re also thinking of risk and compliance. On the broker record, when the regulator comes to me, I’m the one holding the bag, so I better make sure the bag is nicely filled with stuff. It’s got good handles, and I can demonstrate very clearly that I’m holding the bag well.

So from a brokerage point of view, when they are seeing these responses come back and the agent can easily click the button that says ‘Accept’, they can track what lender’s being used. Especially in Ontario, for the annual information report, which makes it easier for them administratively. It makes them more trusting of what’s happening because they can see what’s happening in their brokerage more easily and then report on it more quickly. Which is all to the benefit of all.

Lawrence: Have you ever gotten the call from the broker that says, “Hey Ryan, I’m trying to submit a deal to ABC Lender, I can’t find them on the list. Where are they? Why aren’t they there? What’s going on?”

Ryan: Yeah, we do. It’s a reasonably regular occurrence that a broker will say, “Hey, is the lender XYZ on the list, I need to submit the bureau. As a broker, I can’t email the bureau out. I’ve got to get it to this lender. Are they on the list?” Sometimes the answer is, “Oh yes, they are.” Great! The broker’s like, “Fantastic, that’s great. I can just go do that.” If they’re not on the list, the broker’s like, “Well, how do I get them on the list? How do they get there?” Obviously, there’s a conversation to be had with that lender as to the steps they have to do and where they have to go. They have to chat with one of you guys, they have to chat with Equifax.

But increasingly brokers are saying, “Well, given that I know I have to handle my consumers’ information well, particularly the credit bureau, I need to ensure that my lender partner is able to help me on that side.” So what is that I need my lender to think about so that I can get them the information they need to be able to underwrite the deal and hopefully fund this deal and put a consumer in a house.

Joseph: It’s almost like there’s an onus on the lender to be responsible in getting connected in some capacity or another and to be available on the Filogix drop-down menu. Because the brokers have to be compliant from the Equifax perspective and keep personal data private and send the data to only where it needs to go. Those guys need to be aware that if they want that business, they’re putting the broker almost in a bad position by asking them to do something offsite or off the grid. Just because they don’t want to be digitized on your platform.

Ryan: Yeah, I think from a brokerage point of view, when we look at how Equifax rightly expects you to handle that confidential consumer information securely, as the consumer does themselves, you never want to jeopardize a career over a transaction. You want to ensure you’re doing things well and that the brokerage ultimately is responsible for what that looks like. If you’re unable to solve a client’s need because the lender you’re looking for can’t receive the information, then that limits the options you have as an agent. It limits the choices the consumer has in their application.

So the more the agent can look at a wider range of choice of lenders, the better for the consumer. And certainly from a lender’s point of view, the more exposure they can have to those brokers who are looking to send that application in, I think the better. I would suspect this is the case. 

I think you’ll probably have some better info on it than I, that we’re likely seeing more lenders getting more applications from more different brokers who they didn’t know previously because they’re now available on the system. It’s easy for that agent to pick them in the advertising emails from that lender to an agent, and to say, “Just click, find me on the list and click there and I’ll get the application.” That makes it easier for the agent because they already know that behavior. They don’t have to do anything different. They’re just picking that lender name. I suspect that there are more lenders getting more business as a result.

Joseph: We have been hearing that response.

Lawrence: And I suspect that as time goes on, the lenders who are not adapting to the new world, they’re going to see their volumes go down, they’re going to decrease. It’s simply based on what you were saying. Where it’s, “Hey, I want to submit a deal to this particular lender but I can’t. I mean, I don’t want to do anything wrong, so you know what? I know I usually deal with this lender, but maybe I’ll try that lender today because I can click this one button, send it over, hopefully, they’ll say yes. If not, I’ll see what other lenders are on that list.” 

But I think that it is still relatively new. It’s a new part of the system. As quickly as we think that information spreads, there are always people who are living under a rock who don’t get that information until many months later.

I do believe that come the new year, if you’re not on the Filogix drop-down, it’s not going to be a good situation. Right? Because your trusted brokers who you built a relationship with, they want to do things right. The right way. They want to make sure that they’re staying compliant. They’re going to have that internal struggle of, “Listen, I love dealing with this lender. But I can’t get them the deals properly. So I have to find a new lender now.”

Joseph: Equifax conducts spot audits on people, and I think they’re going to be doing more of that these days because they’re going to be aware that brokers are still sort of not following all protocols. I think certain guys will be made examples of and they’ll lose their permission to pull Equifax. Then perhaps maybe at that point in time, the light bulb will really go off, and they’ll say, “I can’t submit anything, ever off the grid ever again. Because it’s not worth my livelihood. My lender, if he wants my business, he better get with it. Otherwise, business is going somewhere else. There’s 140 other lenders who are happy to take my business.”

Lawrence: It makes no sense at all for a broker to take risk. Zero sense. What’s the point? Find a lender on the list, work with lenders on the list. That’s the bottom line.

Ryan: I think it almost becomes the table stakes of entering into the industry as a lender is that security. If you’re a lender, you really have to act like one, right? There’s just a table of stakes now that have changed. The table stakes in past years were lower. There was less sophistication needed. There was less oversight required. There was less stuff you had to do. But that’s just changed as society has changed in kind of all manners. There’s just more stuff to do now. There’s more table stakes.

I think when I was back in high school, which was back in the late 80s, your phone line was the communication. Or you saw your friends at school. And either they knocked on your front door, or they called you, and if you happened to be home and someone picked up the phone, you could talk to them, and you’d all agree, “Yep, we will meet Friday night at 8:00.” And either everyone showed up or they didn’t. And that was a fairly low table stakes, as in terms of how I handled working with my friends.

Now I’ve got, I don’t know, seven different social media apps, instant cell phones, voice mail. I’ve got all sorts of ways to interact, to change, and to decide what’s going to happen and to play around with what goes on. The table stakes of me just being part of society now are larger, and keeping track of more things and more places, with more people. They’re all doing the same stuff. 

As the table stakes have risen in society in general, so too have the table stakes risen just for lenders and brokers in the system. At a certain point, if you don’t make those table stakes, which is again, secure and transparent, and compliant, you just won’t be part of the transaction. Because you won’t be at the table.

Joseph: Yeah, I couldn’t agree with you more. I want to actually shift and ask you something in regards to what Filogix is today as a platform. Before, back to the Mortgage Base days … I actually used Mortgage Base as a mortgage broker 16 years ago. I remember I think, just around that time later it switched over to Filogix. Back in the day, Filogix was just known as the only broker submission system. It’s the only way to get data to Home Trust, to Scotiabank. You guys have sort of taken a little bit of a different direction. You’ve almost become a connector. Talk about that a little bit, Ryan, if you don’t mind.

Ryan: I would say not “almost”, that’s quite accurate. It is looking for that connectivity. We talk about the Filogix Mortgage Marketplace, which is really just the connections of all things within the industry. Going back seven or eight years ago, we definitely had a spot where we just didn’t innovate as much, there was a bit of a lull. We didn’t do as much as we needed. And as technology was increasing, it became more readily available to individual brokerages or individual agents, we got a little bit behind.

We just said, “This isn’t the path we want to be on. But we’re going to have to readjust our path and it’s going to be a lot of work behind the scenes.” We spent a lot of time, a couple years really, rebuilding a lot of our infrastructure and architecture internally to become the foundation of what ultimately is the connectivity world you see today. Historically, Expert passed old legacy programs. Expert was the one thing that everybody used. But as everyone moved to more customization and configuration, and “I want to do my business my way”, that just necessitates a change in how we think about how we do what we do.

A lot of work and effort went into building connectivity that allows lots of different people to connect to our marketplace, to our hub, if you like. My analogy might be, in the last little while, we have decided that we do highways really well. We do paths that are very good, they’ll take you to all sorts of places. We do a little bit with cars, but there are lots of people that make cars. So if you want to drive a car that’s an F-150 truck because you’ve got to haul a lot of stuff, you want to have a sports car, convertible, you want a BMW, you want a jalopy, doesn’t really matter. You find the car that you like to drive. And all those cars will drive on a nice, smooth, paved highway and will take you to the places that you want to get to.

Because people were starting to buy cars, we said, “Well great. That’s okay. It’s okay to buy cars. Let’s make it so that all those cars can drive on our highways nicely so that we have lots of choice for the broker community.” Because ultimately choice drives innovation. It drives efficiency and productivity. Stagnation doesn’t help anybody. And if you open up and allow more people in to do more things, to do business their way, to be more efficient in how they do it, to attract more clients somehow, to manage those clients better, to be better brokers and businesses, then that raises everybody’s boat, right? Everyone floats higher on a rising tide. If we can make a broker be able to do business their way better, then that’s a good thing.

So we spent a lot of time and effort doing that. That has allowed a lot more choice in the industry. Ultimately, we aren’t so concerned with what the broker uses as their front end. We aren’t so concerned with what a lender uses as their software. Neither the broker really cares what you use as a lender and vice versa. The lender really doesn’t care what you use as a broker software. Use the best thing for each other, and we’ll connect them all in the middle so that the ideal state is whoever’s using the best tool for the job they need to do, is matched with the other person using the best tool for the job that they do. And ultimately, that has to make a more efficient and stronger community and a stronger industry.

Lawrence: How many people work at Filogix?

Ryan: As part of Finastra, globally, there are about 10,000 people working for Finastra. When you move down into the individual business units, I’m going to say there are about 60 people in the Filogix world. Some of those are shared services with the other groups. But people that touch stuff, we’ve got our client services team, our development team, and QA. There are other people. There’s shared marketing and infrastructure, and architecture, and software development. So there’s about 60 people all over that would be part of that. We’ll call it the direct Filogix impact. 

Joseph: Team Canada, basically?

Ryan: Yeah, it’s in Canada. Because Finastra is a global company, we can access global resources for some specific functions that there may be kind of one-off things or particularly centralized functions that Finastra globally uses.

Lawrence: Is it similar outside of Canada? They use it as a broker software? Is it the same type of business?

Ryan: So Finastra is the third-largest global fintech company with operations in basically every country that exists. Look at the top 50 lending institutions in the world, and we’re in 48 of them. The two we’re not in are nationalized banks. But there are tens of millions, or maybe hundreds of millions would probably be a better description right now of people that will be somehow impacted by something that Finastra does globally.

If you think of the global banking system, someone wants to lend money or borrow money, or have a payment, or move a payment, or have security around the globe. We’re part of many of those things. Behind the scenes, there’s a vast enterprise that is Finastra itself, across every continent. I don’t think we have a bank in Antarctica that we would serve, but other than that, it’s a huge enterprise. In the Canadian world, we’re a little bit unique in that we’ve been running as Filogix for so long. And the Canadian market tends to be more regional than you might see when you think of all of the US or all of Europe.

Look at California itself, there’s nearly twice as many people in California as in Canada. So we have an appropriate scale, right? The US enterprise of Finastra has all sorts of products to serve the many thousands of banks, and all the mortgage brokers that are in there. Just like we’ve got the same in Canada. But the two are very different, right? The US mortgage system is just functionally different than the Canadian one. So those two enterprises are separate.

Lawrence: Did COVID have an effect on your business at all? 

Ryan: We’ve been able to pivot actually very well away from physically being places to being wherever. I think that’s kind of a lot of the nature of mortgage professionals. I think a lot of them like that flexibility where they don’t have to be sitting at a desk from 9:00 to 5:00 in a physical location. They can be wherever they are with a laptop and a phone they can be working from home.

Globally we were able to transition I think quite readily to that virtual environment. I’ve moved to Calgary from London in 2001. So I’ve functionally been a virtual employee since 2001. The biggest change for me was I’m not traveling. Because there are no events going on where you’re traveling to different broker events. Which would’ve taken up a lot of my time before. But now I sit at the kitchen table, I sit at my office in the basement, and I can talk to people. I can provide advice. I can connect to them via Zoom to be able to provide the knowledge they’re looking for. Again, they’re going through the same thing. They’re on their boat or in their basement looking for the knowledge, and they’re passing it on to the consumer. As an enterprise, we shifted very easily to remote, because so many of us were generally remote anyway.

Lawrence: Is there any statement you want to make for people listening? Maybe the outlook for the next few years? Maybe a plea to lenders who are not on the drop-down to jump on?

Ryan: I like telling sports analogies. I do a lot of backcountry skiing. So for those that don’t know, that’s where you put skis on your feet and you’ve got little skins, and you walk up the mountain, and you make sure you’re not in the outland’s path. You get to the top of the mountain, and you get to ski down. Ninety percent of this effort is just getting up to the top of the mountain. As you’re going up there, you’re looking at the lay of the land. You’re seeing what conditions are going to be ahead of you at a large scale, and, as you get closer, at a small scale.

But there’s a certain point where you’re going to come up to the tip of that hill. There’s going to be a rollover. You can’t quite see what’s immediately below you, but you’ve kind of scoped it out on the way up. You know what’s going to happen. You know things are going to be there. 

You’ve got to make that first leap and say, “I’m going to trust my navigational skills that have gotten me thus far. I’m going to trust that as soon as I go over that roll, I’m going to know more or less what I’m going to find there. Because I’ve done my work on the way up. If there’s something in the way, if there’s a tree or a rock that I’m seeing, I can ski around it because I’ve got skills and talent. I have experience that allows me to navigate that area. Then, ultimately, I open up this great big powder bowl and these fantastic swooshing ski lines on these fantastic powder bowls. It’s a fantastic, fast, awesome ride.”

I think we’ve kind of come up and we’re mostly now just finishing that ascent, right? We’ve seen all the landscape. We know what it looks like. We’ve seen it up close. We know there’s more stuff going to happen. We can’t quite see, but we kind of know what it’s going to be.

We know there’s going to be some more stuff around security and transparency and compliance. Just like we know there might be a tree or a rock there. But we’re coming up on that roll, and we know as soon as we go over that roll, we can adapt to the environment because we are prepared for it. 

I think that’s the big thing. Take a look now, whether you’re a broker or lender. Look at the road that’s coming up. Prepare yourself for what’s coming for the next six or 12 months knowing you’re going to get there. Then, when you do make that rollover, you can use your skills to avoid any of those minor obstacles that you might have known were there, but couldn’t really see at the time. And then have smooth skiing after that.

Lawrence: I love it. Ryan, thank you very much for stopping by and giving us some insight on your side of things. Because we only hear about our side, right? So it’s nice to get a perspective from the broker side and the Filogix side.