In late 2006, the U.S. subprime mortgage industry witnessed the housing bubble disintegrate due to the sudden rise in the rate of subprime mortgage foreclosures, which consequently caused a number of subprime mortgage lenders to file for bankruptcy. The meltdown saw prices in the $6.5 trillion mortgage bond market collapse, not only threatening broader impacts on the U.S. housing market and economy, but also taking its toll on financial institutions around the world.

This debacle has forced many financial institutions to take a step back to reassess their lending processes so they can get a better understanding of what went wrong and how they can avoid it in the future. But where do they start?

The answer may vary from firm-to-firm, but there is one approach that every firm should consider when evaluating the risk associated with their portfolios: combining a suitable risk assessment strategy with that of a solid technology foundation can help financial institutions make more sound lending and investment decisions. Adding enterprise content management to the mix can up the ante by helping firms rapidly deploy content-centric business solutions that can help increase efficiencies, help improve customer service levels, assist in mitigation of risk, help accelerate product development cycles, help streamline deal-related processes, and therefore may generate competitive advantage.

We've put together a few key fundamentals to help firms mitigate risk associated with lending:

• Technology, automation and information management, access and control all are necessary components of a comprehensive solution to this issue, but that it is only one element of the equation. Clearly, there will be further oversight put into place by the regulatory and watchdog agencies. While the secondary markets may impose a combination of government overview and perhaps quasi, self-regulatory controls to mitigate this in the future, the mortgage originators, brokers and banks will also be monitored more closely going forward. These regulatory and compliance issues will create the need for further internal controls and tracking on the lending processes and documentation associated with them.
• Increasing the quality, and quantity, of risk-related and risk-adjusted metrics in relation to real estate investments is critical. Analytical technology can provide the ability to alert, detail and summarize risk in a type of executive dashboard that can help financial institutions look at the trends and critical points in their investment alternatives, and directions they should be concerned with. Investment appetites and pain points tend to be defined in terms of numbers, thereby alerting investors to over-indulging, hopefully before a negative outcome becomes a reality.
• Fully-digitizing and automating lending processes allows organizations to create rules and alerts when risk-adjusted thresholds of subprime investments are reached; while keeping track of all the documents (paper and non-paper) that go into the lending process.
• With the proper technology in place, lending folders can be packaged up and more precisely analyzed by secondary market purchasers so they can get a 360o view of all the information they need from the primary lenders that is pertinent to their subprime purchases and packaged loans to make informed investment decisions.

Additional Resources:

• An information page outlining key services to help financial firms get the most value for their money


• Solutions for Financial Services: Best Practices

Next week Open Text will be at the Enterprise 2.0 Conference in Boston and we hope to see you there. Running from June 9-12, the event is the "largest and most important conference gathering for people ready to reinvent the way work is done." Also, it is an excellent opportunity to meet with the Open Text team and learn how our Enterprise 2.0 strategy is designed to help you transform your organization with powerful social computing tools.

We have a great line-up for next week so be sure to look for us! This is what we're up to on Tuesday:

11:00am - 12:00pm
Demo Pavilion access - be sure to visit Open Text booth #507

1:00pm - 2:00pm
Workshop: Building the Foundation of Enterprise 2.0: Experience the Power of People, Process, and Content in a 2.0 World - presented by Tom Jenkins, Executive Chairman & Chief Strategy Officer, Open Text and Daniel Kraft, President, RedDot, The Open Text Web Solutions Group in the Griffin Room

2:30pm - 3:30pm
Enterprise 2.0 Initiatives and Challenges in the Revere Room

3:30pm - 4:00pm
Ask the Enterprise 2.0 Experts in the Revere Room

4:00pm - 4:30pm
Round Table Discussion in the Revere Room

4:30pm - 6:30pm
Demo Pavilion Open - Cocktail Reception

6:05pm - 6:15pm
Market Leaders Track: Building the Foundation of Enterprise 2.0: Experience the Power of People, Process, and Content in a 2.0 World - presented by Daniel Kraft, President, RedDot, The Open Text Web Solutions Group.

We'll be providing regular updates here @ ECM Briefs including the buzz from the show floor. Or subscribe to Cheryl McKinnon's Twitter Feed for real time updates.

We've talked here before about the benefits of bringing Web 2.0 into the enterprise. There's no question that these new technologies can have a major positive impact in an organization looking to embrace Enterprise 2.0. In March, we announced a comprehensive strategy to deliver more of this technology to customers and also entered into a partnership with the University of Waterloo, in Ontario, to help fund a research and educational institution dedicated to Enterprise 2.0 and digital media technology. You might say we're "putting our money where our mouth is."

So while we're committed to delivering new and innovative 2.0 tools to customers, we also recognize the potential road blocks to broad adoption of these news technologies in large organizations. Some of the biggest among these are compliance and legal risks. For organizations to be successful, Enterprise 2.0 tools must be delivered on an ECM foundation that lets customers manage the inevitable legal and compliance issues that will arise. Today, we released a podcast where we talked about Enterprise 2.0 and how organizations can address risks. We were joined by Dan Keldsen, research director for AIIM, the ECM Association.

In the podcast, we talk about how IT professionals and records managers need to take a proactive approach and look at how the best practices that have become commonplace across enterprises for electronic records can be put in place for new media content.

Among organizations, the Enterprise 2.0 fear factor still looms large: 36 percent of respondents to a recent AIIM report on Enterprise 2.0, co-authored by Keldsen, pointed to potential security violations as a major concern. In the end, Enterprise 2.0 content is no different that any other electronic content when it comes to records management. Both IT and Records Management professionals must look ahead to a future in which blogs or wikis are as much a part of their business processes as email is now. That means they still need to plan for the retention and management of that content, as it's done with other corporate information.

We think organizations can balance the productivity needs of the user with the compliance and risk management issues of the corporation - stay tuned for some announcements we have coming up to show you how.

Walk into any life sciences organization and you might see more than a few people scratching their heads and looking bewildered when asked about eDiscovery and how exactly a record is defined in the industry. Some might tell you that regulated content is the only content that has to have record classifications applied to it, which isn't the case. And because of the litigation aspects associated with these records, legal counsel and the senior executives will tell you their own perspectives.

Pharmaceutical, Biotechnology and Medical Device Manufacturers face an enormous number of regulations - including the FDA Rule: 21 CFR Part 11 for Electronic Records and Electronic Signatures -- which guide their records management practices. Records Management is nothing new to this industry, but the increasing use of technology in the industry, and the increasing use of electronic information management, is forcing organizations to rethink the way they manage their records.

In a podcast posted this week, I discussed these issues with Christine Ardern, Director, Records Management for Entium Technology and Liz Kofsky, Records Management Program Manager for Open Text.

We all stressed the fact that organizations need to recognize that a solid enterprise-wide records management practice is essential to a successful compliance program. Many organizations have implemented departmental strategies to address one or more records management requirements typically under the regulatory or quality management umbrella, but recent changes in eDiscovery legislation as well as general good corporate governance practices require a holistic approach to records management.

The main thing to remember is that keeping everything is not a viable option - the podcast will help you take the first step in determining the best records management options for your organization.

This week I'm at the Drug Information Association Annual Meeting in Boston where I've been talking to people about all aspects of enterprise content management in the life sciences space including records management, quality management and Web 2.0.

Pretty much everyone I've talked to at the show is looking to do more with ECM. They're looking to go beyond traditional regulated documents, and want to have more focus on contract management and records management, and basically bring all of their content together under one roof so to speak.

I've also been hearing a lot more Web 2.0 talk this year. Conferences like this one give pharmaceutical professionals an opportunity to connect with peers and prospective drug development partners. As we take advantage of these opportunities here this week, we're reminded that the next generation of social networking will enable those relationships to build throughout the year.

New sites and services are being launched that will help connect those in the life sciences community. I met someone yesterday who was launching a social networking tool for drug development companies and professionals.

I've asked myself many times when Web 2.0 will significantly impact pharmaceutical and biotech companies... As I am approached by someone who has been following Open Text on Twitter, I realize that it may be sooner than I thought.