Shmulik Fishman: Solving an Old Problem in a New Way #TechAll-Star

Shmulik Fishman has an infectious enthusiasm about goings-on and growth at Argyle, a six-year-old financial services company based in New York City that has developed a trusted payroll connectivity platform for frictionless, automated verification of income and employment (VOIE).

“It’s pretty great to wake up in the morning and love what we’re doing,” Fishman said. “We’re solving an age-old problem in a new way that’s beneficial to both businesses and consumers–creating the perfect stage for lasting change. It’s energizing.”

It took a lot of grit and determination to get here. “Building a company can be painful,” Fishman noted. “There are some really bad days. The first three or four years at Argyle — and frankly at my other businesses — were a lot of soul-searching and not knowing why we were building what we were building. But now, on the other side of that struggle, we’re having a lot of fun with a clear understanding of who benefits most from using our technology and helping those people reap the benefits of it,” said Fishman, a serial-prenuer and 2024 MBA Newslink Tech All-Star award recipient.

Connecting the Dots

Fishman worked briefly in the financial industry before joining the operations side of a digital advertising company subsequently acquired by AOL. He then moved to form mobility service STRATIM (now KAR Global), a platform used by customers such as Avis and Enterprise Rent-A-Car. As STRATIM’s COO, he experienced the complexity of work verification firsthand, which set him on a path for disrupting the employment and income verification space.

If those work experiences sound disparate, to Fishman’s way of thinking, they’re not. Fascinated with spatial problems from an early age, he has always loved figuring out how to connect the dots. For the ad company, that meant connecting thousands of brands to millions of websites. For the mobility service, it was millions of cars to hundreds of dealerships. Now for the mortgage industry: 7 million employers, 6,000 registered payroll processing companies and millions of homebuyers.

“These are very complex problems that require an understanding not just about technology and data, but also understanding humans and what motivates them,” he said. “I’ve found that one can apply a set of basic principles to all these networks — and that’s just what we’ve done at Argyle.”

Welcoming Disruption

Documenting a loan applicant’s income and employment status has long been a thorn in lenders’ sides. Legacy verification providers report success rates ranging from 20-30%, requiring manual intervention for most applicants. These incumbent solutions cost about $100 per report, and once 30 days have elapsed, the data is considered stale. Lenders are often charged extra to re-verify borrower information before closing. Worse, legacy providers haven’t evolved to meet the needs of today’s workforce, which increasingly includes side gig and self-employed workers.

Starting in 2018, Fishman brought together the brightest minds in the field to build fast, cost-effective, consumer-permissioned connections between payroll and employer platforms. Under his leadership, Argyle amassed income and employment data coverage superior to the three largest credit bureaus, offering hit rates four to five times higher than legacy data providers at a fraction of their cost.

Fishman said companies that use Argyle save an average of 80% on total verification costs. Aside from saving money, Argyle customers have to intervene manually less, can process and underwrite loans faster and offer a superior customer experience, noted Fishman, calling it a “strong start” to what was to come next.

If You Build It, They Will Come

The mortgage market challenged Fishman to bridge Argyle’s modern payroll connections to lenders with legacy processes. Some were still using paper, folders and Windows 95. “This was immensely challenging and required us to basically reverse engineer how to connect each mortgage customer,” he said.

To drive the adoption of his product and make a meaningful impact on the mortgage industry, he created a dedicated mortgage division and added mortgage industry veterans such as Sam E. Oliver III (a Freddie Mac veteran of three decades and a former winner of the MBA NewsLink Tech All-Star Award) and Jason Cave (former chief fintech officer for the Federal Housing Finance Agency) to its advisory board.

Fishman also needed to embed Argyle into the core loan origination (LOS), point-of-sale (POS) and automated underwriting systems lenders use every day—so that’s just what he did. During the past two years, Argyle has completed integrations with ICE’s Encompass, Dark Matter’s Empower LOS, and nCino’s Mortgage Suite. It also became the first consumer-permissioned provider to support Day 1 Certainty as an authorized report supplier for Fannie Mae’s Desktop Underwriter (DU) validation service.

Argyle has been growing fast in the mortgage space ever since. In 2023, Argyle added over 50 new mortgage customers and more than doubled the annual volume of income and employment verifications conducted on behalf of its customers to 1.5 million with the help of 15 of the country’s top 100 mortgage lenders.

“I’m very interested in making life better for mortgage lenders and helping move the industry forward with tactical improvements,” Fishman said. To that end, every decision he makes has served to advance Argyle’s understanding of the challenges lenders face and shaped the products and services it delivers. For example, Argyle doesn’t just verify income and employment, it also delivers documents like digital paystubs, W-2s, and 1099s, significantly streamlining the origination process. As a result, Argyle customers report time savings of up to 5-7 days per loan, resulting in higher borrower pull-through and reducing lender costs associated with rate hedging.

Yes, Mortgage Lenders Can Have It All

While Argyle operates in many vertical markets, the mortgage market — which is often slow to embrace change — was tough to crack. While lenders want to adopt processes that provide a better consumer experience, in the back of their minds they’re also concerned with staying out of regulatory hot water. 

With Argyle, points out Fishman, they can get the best of both worlds. “We offer an enhanced consumer experience and full regulatory compliance. Argyle allows consumers to access and control their income and employment data in seconds without searching for pay stubs and tax forms, uploading documents, endless email chains or phone calls. This intuitive experience eliminates the frictions that compromise conversion. There is no trade-off,” he said.

Some lenders even voiced concern about Argyle being a young and relatively unknown company, but, in fact, Argyle stands on pretty solid financial ground having raised over $100 million in capital and backed by top investors including Rockefeller Capital Management, Bain Capital Ventures, Bedrock, Checkr, F-Prime and SignalFire.

For lenders willing to switch, the payoff is demonstrable. Whereas legacy VOIE providers report success rates in the range of 20-30%, companies like Lake Michigan Credit Union and NFM Lending say switching to Argyle has enabled them to achieve verification success rates north of 50%.

“We are offering mortgage lenders a very modern 21st-century consumer experience to allow consumers to connect to any income source or employer all within an app. It’s fast and secure, delivering really clean data. There’s a very reduced risk of fraud and we have really tight connections to GSEs and different LOS and POS platforms, and an ambitious innovation roadmap,” Fishman said.

Partnering with MBA

When Fishman started Argyle, he didn’t know how the product would be used and which markets would be most receptive. His answer has been to partner with “great institutions” like the Mortgage Bankers Association.

“The MBA is a great partner in providing us with access to a fantastic network and vibrant community of mortgage lenders. But also, you know, to be candid, being part of the MBA is a great learning opportunity for me. I’m not from the mortgage industry, and I’m not pretending like I am. I’m a newcomer by all accounts,” he said.

Fishman was surprised and thrilled to be named as an MBA Tech All-Star, perhaps one of the most coveted awards for the mortgage banking industry. “It’s fantastic to be recognized by MBA, and I want to give the team full credit for our inroads and successes with mortgage lenders,” he says.

“Winning this award will help us reach more lenders with our message about doing income verification in a new way that’s faster, more accurate and saves money. We view this as a fantastic opportunity to meet those who don’t know us yet, and we’re looking forward to spreading the word at MBA’s Annual Convention and Expo 2024.”

Being Good Listeners

Working directly with mortgage lenders and the MBA has been a fantastic way for Argyle to hear and learn from the experts. “I would say, as a company, Argyle is pretty good at listening. We want to understand the lender’s verification pain points and what features we should think about next,” says Fishman.

“It’s just been really wonderful to see how much of the mortgage vertical — loan officers, mortgage processors and even the GSEs — have wanted to engage with us. It’s a very big market with a lot of different players, but has been welcoming as we’ve been able to prove our use case using data and proof points,” he added.

Verification databases like The Work Number cover around 125 million U.S. workers with a success rate of 20-30%, meaning manual intervention—such as calling an applicant’s employer and painstakingly collecting and scrutinizing their pay stubs and W-2s—is still required for 70-80% of loan files. In contrast, Argyle covers 220 million U.S. consumers, or about 90% of the U.S. workforce, including gig workers, and 96% of the Fortune 1000. This coverage allows Argyle to deliver an industry-leading conversion rate of 53% and growing, which saves lenders time and money by requiring far fewer manual interventions.

“Using Argyle becomes a no-brainer,” Fishman siad. “Everyone wants to spend less and keep more of their hard-earned money.” At a time when per-loan production expenses are near record-high and net profit margins are in the red, the significance of these savings cannot be overstated.

Naming Argyle

Fishman was very deliberate in choosing the name Argyle. “The way my mind works and with how we’re putting things together, I really wanted to name this company after a pattern. I mean for payroll, the pattern is stripes. For credit card processing and bank connectivity, the pattern is plaid. For payroll connectivity, the pattern is argyle,” he said. “Argyle is the pattern we see for payroll connectivity. I think that that’s a good way to look at the market.”

“Besides, polka dots didn’t sound like a good company name.”