Steve Bisbee’s background prepared him well for the fintech boom. With more than two decades of experience in financial transaction technology across sectors including auto financing and mortgages, Mr. Bisbee understands how technology can be used to accelerate processes created in a previous era.
In 1996 Mr. Bisbee helped found eOriginal, a company providing the maintenance, control and use of valued documents in a completely electronic environment. Those documents are stored and protected throughout their entire lifecycle, allowing the client to maximize the benefits of improved business processes realized by fully electronic transactions.
Given the international nature of business and novel approach of the service, eOriginal’s technology must function effectively across many jurisdictions. Mr. Bisbee is the lead inventor behind 109 patents issued in 41 countries protecting the creation, transferability, management, access, maintenance, compliance and legal ownership of Electronic Original documents.
Mr. Bisbee’s expertise and early entry into digital transaction management led to appearances before Congress, the United Nations Commission on International Trade Law, the Federal Reserve Board, state legislatures, various associations and Fortune 500 companies.
eOriginal technology powers many auto finance portals and Tesla’s electronic leasing system and is now being leveraged in marketplace lending.
“In the last 18 months, marketplace lending has entered into this space,” Mr. Bisbee. “By leading with technology, processes could move rapidly. Paperless, sophisticated origination systems provide a better experience.”
Assets are hard to manage once executed, Mr. Bisbee said. Given the growth in technology he has seen over the last two decades he saw a strong opportunity to apply it to fintech.
As marketplace lending evolves the need for eOriginal’s technology will only grow.
“Originally consumer loans were peer-to-peer, which had a limited ability to fund the loans. As their need for capital grew they needed to look beyond peers to hedge funds.”
While those hedge funds and others like Citi and Goldman Sachs have started investing in marketplace loans, if their participation is to be maximized the need for proper custody and maintenance of electronic documents is only going to grow.
“To really capture value of secondary markets they need to be able to securitize the loans,” Mr. Bisbee said.
Mr. Bisbee said SoFi is one beneficiary of eOriginal’s technology. In 2015 SoFi completed $1.865 billion of securitizations.
The process behind these securitizations is nothing new, Mr. Bisbee said. Most asset classes, including car leases, student loans, even security alarms, are largely transacted electronically.
“Ford and Toyota, for example, conduct more than 80 percent of their transactions electronically.”
Marketplace lending is indeed moving quickly, Mr. Bisbee said, but is is also maturing at a similar speed. Transparency is solid thanks to solid auditing and reporting.
The proper execution, maintenance and control of electronic documents can only help that transparency, Mr. Bisbee said.
“If the application has been executed electronically we can verify the document hasn’t been changed.”
Financial regulators are struggling with technology, and Mr. Bisbee conceded the specter of fraud gives some pause.
“Everyone is moving (in that direction), so the question first becomes how to best protect yourself and then how best to leverage technology,” Mr. Bisbee said.
Authentication of individuals will be increasingly used in the coming years, Mr. Bisbee said. Take a video of the signing event, and embed a document in that video.
“Once the document is expected, how can you be sure it has not been altered? That technology has been available for decades,” Mr. Bisbee said. “The real issue is to produce truly authenticated documents that protect market participants. Document security is good but data needs to have that same level of trust.”
The method of authentication those participants employ depends on the level of transaction, Mr. Bisbee said. The burden of signing at a retailer is different than an auto loan application.
“What we have found over the years is different people have different needs. The consumer doesn’t want intrusive retinal scans.”
Younger generations are growing more comfortable with identity verification, Mr. Bisbee said.
“Millennials seem less worried, it’s sounding to me like it’s expected. There’s not the same level of privacy we had growing up. They have a very different perspective that will help authentication.”