M&A activity among the largest banks and a prolonged economic crisis will, in the end, result in far fewer retail banking options, compared to only a couple years ago.  At first glance, this sounds like terrible news for the adoption of electronic lending technology.

However, while such a shift may impede innovation on the consumer side (banking products), fewer, bigger and stronger banks have more power to drive the adoption of meaningful technology standards - an important factor in electronic lending.  Fewer, bigger and stronger banks have greater leverage with trading partners (more market power), enabling them to require conversion to the banks’ standards.

It only takes three
When the dust settles, the top five U.S. banks will be exponentially more powerful than ever before.  A few banks converting from paper-based to electronic lending is all that is needed to create a tidal wave of seismic proportions in the banking industry - one that would dwarf the 85,000 electronic mortgages registered with MERS as of March.

Currently, three of the top five – Bank of America, Citigroup (Citimortgage) and Wells Fargo – have already completed the lengthy process of integrating with the MERS eRegistry.  In other words, all three of these banks could implement a top-down eLending initiative tomorrow if they chose to do so.

The question, then, is how do we as an industry, help to push these banks over the top?  Here are two ideas:

1. Prove the benefit to society. Next week, I will meet with several members of Congress to discuss how eLending technology can help to achieve the transparency which both Congress and the Administration desire.  However, my voice alone is not enough.   We as an industry must come together to educate Congress and impress upon its members how eLending is the best solution to a very severe problem, one in which they hope to remedy.
2. Prove the ROI.  Imagine the scale that eLending could bring to a trillion-dollar bank.  Anyone who understands the vision of electronic lending technology can see a cost savings with lots of zeros at the end.  However, we have to do more than sell the technology; we have to educate very busy bank senior executives who, understandably, have a lot on their plates right now.  We must make our business case to everyone who will listen, through every available channel.

The market only needs a few of the top banks to go “e”.  The entire banking industry will benefit if we can accomplish this.