Wolters Kluwer Financial Services Acquires AppOne
MINNEAPOLIS — Wolters Kluwer Financial Services announced it has purchased the AppOne Companies.
With the acquisition of AppOne, Wolters Kluwer Financial Services expects to integrate its compliance content with AppOne's leading process automation suite. This will provide the indirect lending market with an end-to-end solution that helps indirect lenders address the inefficiencies of a manual loan documentation and verification process, according to officials.
"This acquisition is intended to help Wolters Kluwer Financial Services more fully serve the automotive indirect lending market," said Brian Longe, president and chief executive officer. "AppOne's state-of-the-art technology solutions complement Wolters Kluwer Financial Services' trusted compliance content, which is built upon the more than 50 years of experience and knowledge behind Wolters Kluwer Financial Services' Bankers Systems product line.
"Together we can offer automated tools that help the auto lending industry more effectively serve their customers," said Longe, noting that Wolters Kluwer Financial Services is already a leader in end-to-end workflow solutions in the community bank market with its ComplianceOne solution.
"There are a number of factors fueling the automation of indirect lending in the automotive sales industry, including an increased level of competition among lenders and the errors that can result from manual processes," reported officials.
"Greater risk and operational controls have also come in focus as dealers and lenders work to meet regulatory requirements tied to the USA PATRIOT Act, Equal Opportunity Act and FACT Act," executives continued.
Commenting on the transaction, Lee Domingue, founder and CEO of AppOne, said, "Wolters Kluwer Financial Services is an industry leader when it comes to addressing compliance and operational risk management issues — a growing need for the independent auto market.
"Through this acquisition, we are positioned to further expand our ability to help independent dealers and lenders compete in the marketplace and strengthen the experience customers have with AppOne and Wolters Kluwer Financial Services," he continued.
The AppOne executive team, including Domingue; Chris Herndon, chief financial officer; Gary Perdue, chief operating officer; and Param Ramakrishnan, chief information officer, joined Wolters Kluwer Financial Services. Domingue continues to serve as CEO of AppOne, according to officials.
The terms of the agreement were not released.
A Look into Wolters Kluwer Financial Services
Earlier this year, SubPrime Auto Finance News sat down with officials from Wolters Kluwer Financial Services to learn the company's story.
Several industry professionals banded together in early 2006 to found Wolters Kluwer Financial Services as an offshoot of a large global company. The financial services division of Wolters Kluwer specializes in lessening the compliance risk to dealers and financial institutions by providing a wide array of contracting solutions.
Kevin Kopp, director of indirect lending, said his company is so confident in its services and team of attorneys who act as watch dogs, wading through local, state and federal laws in order abreast of the latest legislation, that Wolters warranties the compliance content of its contracts. This means if one of the company's clients is sued over a compliance issue, Wolters will defend itself.
"We're the only contract provider in the country that offers a warranty," said Kopp in a an interview with SubPrime Auto Finance News. "If one of our clients gets sued because of the content of our contracts for noncompliance, then we step up to the plate. We recommend our services for independent dealers, as they are the most at risk because they are the least educated on compliance issues."
More than 8,000 dealers throughout the country purchase pre-printed contracts and e-contracts directly from Wolters, according to Kopp, while another estimated 7,500 used the company's contracts through their lender relationships. In other words, the lender purchases e-contracting services from Wolters and redistributes the contracts to dealers.
The company works with various lenders.
"We feel like we have a team in place that really understands the indirect lending market," Kopp explained, referring to Wolters executive team, which has an extensive history in lending and technology. "We like to think we have a lot of expertise in the lending market. We've been in the process of adding other members and key players that have a lot of knowledge as well.
"We offer really neat solutions within the market and banking industry, we're a very diversified company, but our real competency falls into the compliance area. There are more than 30,000 legislative pieces introduced in the mortgage and lending area a year that impacts our customers. The compliance burden today is humungous. Our clients can't keep up with what's introduced so it's our job."
He said the Wolters monitors and tracks compliance issues based on its different lines of business. Kopp said the company's team of more than 75 attorneys is constantly analyzing to see if a newly introduced piece of legislation will affect mortgage business, lending business or the content of a checking account? He went on to say that the attorneys are always questioning, what does this mean to this particular business and industry?
When the attorneys find something of interest, they update customers and contracts if needed, Kopp said.
"We have to consider a lot of different things, market trends, legislative trends and other trends that affect the market," Kopp explained. "If a judge repeals a law at any level, we have to take that into consideration. You can't just sit with blinders on and watch law and compliances issues change."
Wolters offers a full line of vehicle documents and ancillary documents, in addition to lease and retail, Kopp pointed out. He said all states are covered by Wolters' various contracts.
"We offer customizable documents, so if a particular bank wants language specific to programs or applicable to late fees or arbitration, we can add that," Kopp said. "We can customize contracts however our client wants it. We offer both pre-printed and electronic documents."
One of the brands Kopp highlighted was Expere. It allows companies to customize their document right on the spot, view the changed document and have it accessible quickly for dealerships via dealer management systems or lender platforms such as RouteOne, AppOne and Finance Express, Kopp said.
"The dealer won't even know the lender modified the contract," Kopp pointed out. "The dealer just sees a beautiful, finished contract."
In addition to its contract services, Kopp said Wolters also offers analytics on lender portfolios and also reviews transactions for anti-lending and anti-fair practices.
"Out in the marketplace, we have a very good name," Kopp explained. "What we offer is the ability to take proactive action prior to being sued. This is an insurance policy for your portfolio. We can even offer a point-of-sale option. If a particular lender has some questionable practices, it can be pointed out."
Wolters Acquires Banconsumer Service
As part of its efforts to grow, Wolters is constantly looking for new opportunities and new acquisitions, according to Kopp. This desire is, of course, reflected in the company recent purchase of AppOne. Another one of these recent transactions was the company's purchase of Banconsumer Service. BANCO specializes in offering regulatory compliance-related documentation to the Northeastern region of the U.S.
BANCO's main services include pre-printed and e-forms for the indirect lending market, in addition to serving the mortgage and home equity markets. Wolters said BANCO's product portfolio supplies auto lenders and dealers with retail installment contracts and leases in all 51 jurisdictions.
"The addition of BANCO to Wolters Kluwer Financial Services' strong and growing portfolio of solutions and services for the indirect lending industry is a great fit for both organizations," explained Brian Longe, president and chief executive officer of Wolters financial services division.
"This acquisition strengthens our leading position as a supplier to the indirect lending market," he continued.
Nick Roth, president of BANCO, added, "Both organizations offer auto lenders a similar value proposition – regulatory compliance documentation that is highly customized to a lender's individual business rules and policies, accompanied by personalized service and responsive support. Auto lenders rely upon such customization and personal attention to detail to help them mitigate risk and build upon their brand in the marketplace."
John Bryant, executive vice president of banking for Wolters Kluwer Financial Services, also noted, "Together, we'll be able to strengthen our ability to deliver such customized solutions to auto lenders and offer BANCO customers access to Wolters Kluwer Financial Services' leading compliance content, built upon decades of industry knowledge and experience.
"As the auto lending industry continues to shift from paper to electronic solutions in the next several years, e-contracting will become the standard," he concluded.
As part of the transaction, Roth will join Wolters as a consultant.
For a full list of products and to learn more about Wolters services, visit www.wolterskluwerfs.com.