LEADER APRIL 2019
MESSAGE FROM THE PRESIDENT It’s a new year and our Leader has a new look! With an ongoing movement away from print material and towards electronic media, we’ve developed a more compact Leader with articles easily accessible to readers. The change will also allow us to leverage other electronic platforms at a greater level. The shift from print to electronic media is a result of disruptive innovation. When innovation creates a new market and disrupts or displaces the established market, it’s called disruptive innovation. Personal computers started this shift while the tablet and smart phone accelerated the trend. Other examples of disruptive innovation familiar to many would be film photography to digital imagery, bricks and mortar retail to e-commerce and, more recently, cable to streaming video. Keeping up with changing technology and an eye on the disruptive innovation happening in your industry space is paramount to the success of any business.
BRIAN RICKER
Disruptive innovation and technological changes were topics at our annual board and management planning meeting last year. Pictures comparing New York City’s Fifth Avenue, thirteen years apart, demonstrated how quickly massive change can happen. The first picture was of an Easter Day parade in 1900 (the year three of my grandparents were born) showing the street lined with horses and carriages. The second picture taken in 1913, showed only automobiles in the street. Within thirteen years, a massive shift to the automobile occurred. Depending on your age, there is a good chance you’ve seen some massive shifts in your lifetime. I still remember receiving a facsimile machine as a door prize at a work conference in the early 1990’s. I recall showing my father (now 92 years of age) what it could do, and
he watched in utter amazement. At the time, we had a good laugh but admittedly had no idea what the future had in store with the upcoming computer age. It seems these massive shifts are more commonplace today and are occurring at a faster pace. One shift we are seeing in the lending space is the move to more electronic signatures (e-signature) on documents. Recently, I had my tax return completed and I signed off through an electronic process. It was a simple and efficient process compared to the past, when the documents were snail mailed back and forth. In the near future, AgCredit will have more loan documents available for e-signature. Currently, early disclosure notices are the only loan documents available for e-signature. Our goal for later this year is to begin closing electronically (e-close) less complex loans with a longer-term goal of closing all loans electronically. Since the efficiencies of a standard practice for closing loans will likely become the norm, the days of requiring a hand written signature on a loan document could eventually go away. Although there are procedures and other challenges to be finalized, we believe once accomplished, the efficiencies gained will be significant. A common mistake on notes and mortgages is the signature being different from its printed mark. The result is the need for a correction and an inconvenience for everyone involved. An e-closing will help with other common errors as well. Other efficiencies gained will include an electronic archive and storage of executed documents and the ability to retrieve your documents. We are optimistic the advancements in technology surrounding e-signatures and e-closings will give us a pathway to greater efficiency and a better customer experience for everyone. Although we may be a little leery of disruptive innovation at the time it is happening, I think most of us would agree it has improved our lives. It will be interesting to see what the next disruption might bring.