Overview

This month we are focusing our Women in Leadership series on Bernadette Kogler of RiskSpan; she is a mortgage industry leader and the one I often associate with bringing blockchain technology to the forefront of structured finance.

As you will see in my interview, blockchain is further along than many realize. An early adopter in harnessing its technology, Kogler and her firm, RiskSpan, are driving change and providing a tremendous example of how a small business can bring about large change.

The Interview

As President of data management and analytics firm RiskSpan, what are your day-to-day responsibilities?

At RiskSpan, we have always had a reputation for strong execution and delivery to clients. This has been true from day one, so although we have grown, the same dedication to service and getting things right persists. So, spending time with clients and maintaining a first-hand understanding of their issues remains a large part of what I do. I also spend a fair amount of time with our Innovation Lab and, of course, with oversight of internal operations, including finance, talent management, marketing and sales. Fortunately, I have a strong team I rely on to manage these functions day to day.

What do you consider your top accomplishments at RiskSpan?

First, I am incredibly proud of our team. We invest a lot of time in talent acquisition and are very intentional about hiring and retaining great talent and a team with integrity and a strong work ethic. In 2014, we began to transform our business to focus on data analytics, quantitative modeling and cloud solutions and adopted our “data made beautiful” slogan. Since then, we have methodically built a highly skilled team to support rapid market adoption of open source tools (Python, R) and increased investments in data-related applications and infrastructure.

I am also proud of our Innovation Lab, which we stood up in 2016 to focus on applications of blockchain in the structured finance market. The Lab consists of a small team that works closely with clients to improve efficiencies, data reliability and transparency to investors. We think of our clients as business partners and are able to iterate on solutions that are innovative and impactful for them.

RiskSpan was an early mover on Blockchain, what did you see in Blockchain that prompted your investment?

I’ve worked in the mortgage and structured finance markets for the bulk of my career and it’s amazing how little has changed over the past 2+ decades. Over the years, business networks have been cobbled together where we now have a system with many intermediaries whose sole purpose is to validate or verify data or information. There is little or no trust within this network, and so we spend countless hours re-underwriting, validating data, payment rules and cash flows. The current structure is expensive, inefficient and cannot scale.

When we began to work with blockchain tech, it was obvious to us that structured finance is the ideal use case. Blockchain is a technology that can be truly transformational to the business and its network. Members of a blockchain can communicate directly with each other and address the challenges of transparency, trust, and reliability in loan data and transactions. It has the potential to help us regenerate trust in the post-crisis market.

Given the significance of Blockchain and its applicability to the mortgage industry, what are your expectations for implementation?

Blockchain applications are further along than most people realize, and we are well beyond the hype. In five years, blockchain applications will be a mainstream technology in our industry.

RiskSpan is a growing consulting firm and I understand you have partnered with AWS. Please share with our readers how that alliance came about.

RiskSpan was an early adopter of cloud technology—we migrated our SaaS platform to AWS in 2010. Partnering with AWS was a logical step forward as we continued to synergize our product and services lines of business. We are working to build a team of AWS-certified developers within our consulting division and plan to capitalize on our platform and help clients leverage the benefits of cloud infrastructure.

There’s also the bread-and-butter data analytics that RiskSpan provides, I recall you were also an early user of GSE data through your RS Edge tool. How has that enhanced your understanding of the GSE Credit Risk Transfer transactions?

We have a fundamental belief that investment in clean, normalized data will drive better analysis and more reliable investment decisions. When the GSEs released their loan-level performance data, it was a game-changer for the industry. It provided the basis for understanding CRT transactions but also provided foundational data to build models. We have always been a firm focused on mortgage credit analytics, and so tapping into this rich dataset has been valuable to both us and our clients. We plan to start publishing our own forecasts of CRT deals later this year—so be on the lookout for that.

I recall you worked with a Big Four consulting firm. What was the transition like to a small business?

Culturally, KPMG was quite entrepreneurial so that actually made the transition easier. I went out on my own in 2002 during a time when the internet was relatively new and lowering barriers to entry for me and other small firms. In other words, I could compete more easily as clients understood they were hiring individual talent and didn’t always need a big brand to deliver many services. Since then, I’ve watched many small businesses and the independent workforce explode with some economists expecting independent labor to represent 40% or more of the U.S. workforce by 2025.

However, starting a business is hard and takes perseverance. While the initial years were definitely grueling, they also taught us the most. I have always said that you learn the most from things that are hardest or when they go sideways.

What advice would you give to mid-career women seeking opportunities to expand their roles?

I often tell young women (including my own three daughters) two things: First, “Put your pencil down and go to lunch.” What I mean by this is make sure you get out of the office and network. The second thing I encourage is to be confident in yourself and take risks – don’t be afraid to fail. I don’t say that lightly as I know how hard it is for many women. But I encourage them to push themselves outside their comfort zone. I would also like to encourage more senior women to reach out to young women and help. If we see young women sitting in the back row, let’s reach out and pull them forward so they feel a seat at the table is natural and where they belong.

Bern, as you look back, what do you think has been helpful in your career, and what would you have done differently, if at all?

A couple of things come to mind. My network has been one of the most critical elements of success. I have been fortunate to have several mentors—both male and female—that continue to provide advice and support in numerous ways. Some provide specific business advice and may make introductions while others simply provide encouragement and voice unwavering confidence that fuels my energy. Looking back, I would have spent more time earlier in my career networking at all levels.

Epilogue

At Housing Finance Strategies, we are leading change in all things housing. By interviewing key executives like Bernadette Kogler, our intent is to educate and encourage the industry to constantly grow and evolve. Having served on the RiskSpan board, I can attest to the leadership and innovation Bernadette has provided to RiskSpan.

As our alliance with NEXT Mortgage grows, we are focused on a series of initiatives to foster growth of women leaders. Sitting down with Bernadette for this interview reminded me of the importance of networking, making it a priority and always looking for opportunities to ‘pay it forward’ to the upcoming generation of women leaders.

To learn more about Bernadette and RiskSpan, check-out their website.

As I like to say, grow, lead and mentor your peers!

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