Appian Corporation (APPN) Earnings Call Transcript & Summary

Hello, everyone, and thank you for joining us for this webinar on Supporting the Paycheck Protection Program with Appian, standing ready in times of urgent need. Today, we have the pleasure of being joined by Michael Heffner, Vice President and -- of Global Industry Leads; and Solutions Consultant, Nisha D'Amico, who will take us through a live demo. Before we begin, a few items, though. Feel free to ask questions throughout the webinar in the Q&A window. If you have any audio or visual issues, just refresh your browser. You'll be brought right back in. There's no need to register or re-sign in again. As mentioned, today's session will feature a live demonstration so definitely make sure you're tuned in. Okay. Let's get started. Mike, I'll hand over to you.

Fantastic. Thank you so much, Kevin, and thank you to all of you for making the time to join us for this very important topic. I also wanted to thank Nisha, who's going to be walking us through the demo in just a few moments. Interesting times, unusual times for sure, and we hope you're all healthy and safe wherever this webinar happens to find you in the world. This -- the topic of this webinar is very specifically focused on the Paycheck Protection Program, which has been an incredibly fast piece of legislation, very much needed. But if you think about how quickly this has moved PPP, as we'll refer to it in this session, from signing of the legislation through it going live, it was a week, and we're about 2 weeks in at this point. So lots of implications for financial services firms that are opting to participate in this SBA program. There are considerations from the top of the house around capital ratios and risk models, for sure. But what we're seeing and what we're hearing is largely the response to date from industry have been very tactical. The purpose of this webinar is to introduce an alternative way. The thinking about this problem space, not in tactical terms, but more strategically and thinking about it in terms of Appian, a low-code, rapid application development platform. We see some real challenges with the tactical approaches that we're seeing banks take right now. For the most part, banks have engaged by throwing people at the problem, so to speak, putting people in seeds to support the manual execution against the P-P-P challenge, PPP challenge. We think that's short sighted. Quite honestly, it's actually creating challenges for the customer experience with existing customers. And the vast majority of the banks have restricted the participation of the program only to existing customers. So it's missing an opportunity to actually generate net new business and engage new customers as part of this PPP program. We're also seeing a lot of the engagement being focused on the front door of this program. So the loan capture mechanism. Whereas we think there are challenges and opportunities to shine, not just in the front door, but in the full life cycle of these 2-year loans, including some of the challenges that are going to come into play around processing these loans. And then, of course, being ever vigilant in terms of fraud, compliance and then the quality of the execution. So I think there's a better way, and we appreciate the fact that you're here to learn a little bit more about what Appian has to offer with its low-code automation platform that actually includes full stack automation. So integrating AI, RPA, decisioning, the management of documents and business rules and the collaboration around functional lines around managing these and then processes around PPP. We do that by being able to execute against a data-anywhere strategy in a low-code way. What that means is standing up this application in days for our customers. And we're very thrilled to be able to show the demo. In particular, some of the things you'll see in the demo include the managing of this loan, PPP loan, as part of a life cycle. So not just worrying about the front door, but also worrying about what comes next in terms of complexity, in terms of integration, document management, decisioning, being able to oversee and control and then also risk report. So all phases of the life cycle. Intake, risk control and processing covered. Now we recognize that the PPP program is evolving because it is so fast moving. So what we're seeing is some folks -- some of our potential customers, standing on the sidelines, waiting for the regulations to be written. One of the things to consider about the Appian platform is it's actually built for change. So as rules changes and policies are continuing to evolve and change, the platform can change as well. So I'm very excited to see the demo. I've seen it a couple of times already and some very powerful representation of what Appian can do. So with that, I will hand it to Nisha who's going to spend about 20 minutes or so taking you through the demo, and then I'll pick it up at the tail end, and then we'll have an opportunity to do questions as well. Nisha?

Thanks, Mike. So I'll go ahead and share my screen, and we'll get this demo started. All right. So thanks, everyone, for joining the webinar today. I will be walking you through, as Mike said, the demonstration application that we've built to show intake, processing and tracking of loans related to the Paycheck Protection Program. Now we know banks are facing challenges with tracking these loans and communicating effectively with both the small business administration and the borrower. So with legislation being passed so recently and the applications already flooding in, banks have not had the runway to stand up robust systems to handle the evolving requirements of this programming. And requiring integrations with existing origination and loan processing system and a seamless connection with the FDA system all the way through to disposition and for bareness or forgiveness. Now as Mike mentioned, Appian has the capability to make these connections and integrations and also the ability to stand up somethings quickly that can be adapted and changed as legislation or policy are changed, which we know is inevitable as we've seen that already just in the last week or 2 this has been in effect. So without further ado, let's dive into the application. So we start our journey in the loan management dashboard. Now this is an example of the view within a lender, within a bank that the origination department might use to track this PPP application. There are a number of KPIs being tracked here such as our targets, actuals and progress around how many applications we've processed and what work is outstanding. And we're also tracking information around industry and geography and borrower demographics. So all this information is being tracked in real time. So as processes are completed and new applications come in, we will see the stack update. We have other information around application status and actions we can take from the screen, but we'll come back to this a bit later. For now let's head over to the customer portal, where we'll start the application process. So now putting on my customer hat and coming into the portal where borrowers would be able to apply for loans and check on the status of their application. On this site, we have some information that gives us background around PPP, along with some health functions and access to a chatbot if you need assistance at any time. We have commenced some helpful and informative links as well as actions related to PPP that we're able to take from the screen. You can apply for a loan, request forgiveness or check the status of an application. So we'll start with applying for a loan. So the first step here is to indicate whether we have an existing relationship with the vendor. If we say no, it will redirect us to the lender onboarding portal and we'll first have to be onboard as a customer. For here -- for now we'll say that we are an existing customer and check yes. So the next thing we need to do then is indicate which of these criteria apply to our business to determine if we're actually eligible for this loan. So we indicate whether or not we are a small business with fewer than 500 employees, which we are. Have we been in operation since or before February 15, probably U.S.-based and have we been affected by COVID-19? And these all apply to us, and so we'll click all of them and hit continue. Now we see that we may qualify for [ decision ], which is great news. So we'll continue to fill out the application. We do have some instructions here on documents that we'll need to provide as part of this process, so we can prepare ourselves and have those ready. So next, we have a choice. There are 2 ways that we can fill out this application. There's -- the PPP form is a fillable PDF that's been provided online by the government, and it is possible that some borrowers will have filled out this application either online or by hand and would like to submit it that way. And for those cases, we do have this upload option. And it uses Appian AI to read the paper form and start the application process. We'll take a look at that in a bit. For now we'll go through the other option, which is to fill out the form online through a wizard walkthrough. So a wizard's going to walk us through all the different components and sections of the form that need to be filled out. First, we have to identify the business we're applying for. Since we are an existing customer, we can simply search for our business and the lender records. So I'll go ahead and do that. Once I select the business, it's going to auto complete the rest of information and that eliminates the need for me as the borrower to enter information that lender already has about me. Next, we need to provide information around our payroll expenses and the amount of the loan that we actually need. There are some business rules at play here. So when I enter an amount for the average monthly payroll, it's going to take that number and apply the 2.5x multiplier to calculate the requested amount. And we do see in this tool tip that the requested amount is maxed out $10 million. And so we have these business rules in play to make sure that the user does not exceed that $10 million limit. If I order to change this and it went over $10 million it would give me that warning and it will not allow me submit the form. So these business rules are enacting dynamically and we do have the ability to configure these and change these as legislation changes. I'll show that a bit later, but this is a great example of how Appian is able to dynamically guide the user through the experience and also show them where the limitations are. The next thing we need to do is enter in ownership details. So anyone who has more than a 25% ownership will need to enter in their details here. We can enter as many as we need, but for now, we'll just keep it to one. And then we have some dynamic questions and certifications that we need to go through. So as I mentioned, these along with the payroll multiplier, the amount cap, these are all being controlled in a configuration panel on the lender side. And so as these questions change, we can also change our information here, and those changes will immediately be reflected in these forms. So I'll go ahead and answer all these questions. We do have to provide initials for a few of these. And then we also have some certifications that we need to put our initials next to, verify that we've read it, we meet these criteria. The final step is to provide documentation, which we were instructed about before we began filling out this wizard, so we do have those at the ready. And so we're going to put in our IRS form and our payroll form, and this is going to take these forms, along with all the information that we've filled out so far, and it's going to assemble it into one loan application package. So once I hit next, I just have to certify, and then I hit submit. And now what it's doing is taking all the information that I've just entered and generating a PDF document -- PDF version of the PPP form. And we're doing this because we do need a web signature on this form in order to process the loan. And so since we are doing it electronically, here we're using DocuSign to get that web signature. But we could, just as easily, use any e-signature tool to fulfill this function. Now what we're seeing here is Appian's ability not only to integrate -- to generate documents based on dynamic information, but also to integrate to external systems and then embed that service into an Appian interface. So without having to leave the screen, the borrower is able to sign and submit the complete loan package. So I'll go ahead to the bottom, drive my signature on, hit finish, and now we've got that done, I can hit done. And that's going to kick off that process, and it's going to send all that information over to the lender to the bank. And I do also get a confirmation e-mail. And so this gives me just a verification that they have received my application, it's being processed. So I know -- I get that immediate feedback. Now while I'm still on this customer portal, I can check the status of the application. And so by going here in check status, I am going to see what part of the process it's in and then all the information that I just entered along with a preview of all the documents that I uploaded as well. I'm switching over to the loan manager dashboard and putting back my loan lender manager hat back on. I come here to continue the process. And so I'll go over to the task tab, and I will see all the tasks that I have assigned to me as part of this process. I do see some high-level metrics around how many assigned and completed tasks we have and then more detail per task such as deadlines. And so I have now that -- the originator review tab. If I go to this, it's going to present me with all the information that we need, that was just filled out by the borrower, and we need to see in order to review and approve this. And so I see just the same piece of information, the questionnaire that I filled out, the uploaded documents and all requested details. If everything looks good to me, then what I can do here is click the check for FDA eligibility button, and that's actually going to kick off an RPA process. So we have a bot configured to access the FDA site and do a lookup for this company. It's doing -- it's using Appian RPA, which is included in the platform to provide full-stack automation and give users the power to integrate to legacy systems and access sites that do have not have web service API, which is the case for the FDA site. So with that, we'll go ahead and click -- check eligibility, and we'll switch over to the remote desktop session so we can see the bot in action. So it's going to access the FDA site in a dual lookup by filling in the company details we provided in the intake process. Build it in, hit the search button, and now we wait for the results to come back. Now as you see this is taking a bit of time, and that's slightly because this site is getting hit with a lot of traffic these days. Now without RPA, an employee handling this process would likely have to manually access the site and put information and then for 5 or 10 seconds in order to get the information they need, add the data pieces and then copy, paste them back into another location. Now with our RPA, the user can continue to do their task. And we see the RPA bot has found the company, it's rolled into the detailed view that we needed to see and pulled out the relevant information. In this case, we're pulling out the FDA loan number that we can use to track throughout the rest of the process. Now the last bit of the process that I'll touch on is that second option that we had for intake of uploading a completed PPP PDF form. We have to -- we have our tab to reconcile the PDF form. So by clicking to that, you're now going to see the form that was filled out, in this case, electronically on a computer, but through a fillable PDF, could also be a handwritten filled out document. So we're seeing the document on the right. And then on the left, we see the extracted data point. So here is where we're using Appian AI to extract the relevant fields from the form and pick them out so that we can use them for the rest of the process. Here, I can make adjustments if I see there's any mismatch, but everything looks good. So I can go ahead and hit submit. And once I do that, it's actually going to bring us back to that originator review form again. And so we -- this is where those 2 branches of wizard versus upload merge again, and we come back into that same origination -- loan origination process. And so I can open up this originator review task. I've opened the same details as I did before. Like I said, we can go back to that SBA, and then I'll hit the RPA bot again. But something that's different here is I do see this warning for an existing application is detected. So this is where we're actually using business rules to detect potential fraudulent activity where business might be applying multiple times, which is not allowed. And I can hit this view details to see the details of that previous application, to see if they are actually a match or a duplicate. Now stepping out of the process for a minute, we head to the loan request tab. We can see a list of all the requests in the system, both completed and in progress. Here we can filter by status and additional filters can be configured as necessary. And once we find what we're looking for, we can click in to see the details of the request. And we have, again, the same application details we've been viewing, the questions and certifications that we have filled out, the documents we've uploaded so far, a trail of comments so that people and employees and the lender can communicate with each other as they go back and forth on these loans. And then finally, an audit trail, where we can see all the processes, the tasks and data that's been changed, any activity that has been happening as part of this process from start to finish. So what we're seeing here is called a record in Appian. We're bringing together all data surrounding a particular topic, in this case, a loan application. We can see the details, including data that might live in other systems such as servicing or underwriting piece or the customer data associated with the request. We'll also link this data to processes that users can kick off relevant actions right from the screen in this context. So actions might include making updates, uploading new documents or we have here with kicking off a loan forgiveness process, which might be -- come in handy if a borrower calls into the call center, for example, to start that process, and we'll come back to that in a bit. The final piece here is the configuration tab. So I mentioned that we have business -- standard business rules in place that governs certain behavior such as the payroll multiplier or the questions and certification. Here we have a configuration tab that allows administrators -- users to come in and adjust those parameters if things change. I can set the loan maximum, the payroll multiplier or I can add new questions and certifications. The forms will immediately pick up these changes in real time and respond accordingly to user input. So if I change this from $10 million to $8 million, for example, the next time someone goes in, that will change immediately, and they will only be able to request up to $8 million. So the last piece of this, we've covered intake of processing, loan servicing, the last piece of this is going to be loan forgiveness. So if we come back to that customer portal, we have a final action here to request loan forgiveness. Now similar to the application wizard, we do have to certify that certain criteria are met in order to qualify for forgiveness. So of retaining -- the company retained full head count that we have used at least 75% of the loan amount for payroll costs, having maintained salary levels, and then we have either maintained our -- if we have not maintained our headcount rather, we will rehire by that June 30 deadline. So I hit continue, we are brought to the form to fill in how we actually utilize this loan and specify which cost the money went towards. Now we see -- we also see our loan application details to the side as a reference point for how much we borrowed. Now there are some validations and business rules here in play as well, such as the number of jobs. So we have 300 here, if I were to drop that down to 250, it's going to bring me a warning that says, I may not be eligible for the full forgiveness, because as we saw on that previous screen, I need to have maintained my full headcount. And if I bring it back up to 300, that validation will disappear and we're good to go. Then we also have additional supporting documents that we might need to provide here. It is carrying over the IRS and the payroll forms that we put in before that we have invoices or other documents that support this loan forgiveness application, we will upload them here. Now once you submit this, it will take this back to the management team for review, the same way that we had reviewed the loan application process. So with that, we've come full circle on the life cycle of this loan. We saw intake of an application, sending loan information to FDA to verify eligibility, review the servicing and tracking of the loan, and finally, forgiveness. We've given the borrower visibility into the status of their application, and the lender, full visibility into metrics and reports around their incoming requests. With Appian, banks will be able to quickly stand up a solution similar to this to tend to their needs to service PPP customers that work seamlessly with their existing systems while leveraging the full power of Appian RPA and AI. So that concludes the demo. Mike, I'll pass it back to you.

Yes. Nisha, fantastic. Thank you so much. I really appreciate you walking us through that. Every time I see it, I'm just incredibly impressed and struck by the fact of the -- all of the components that we're covering in this complex life cycle, truly end-to-end, not just the intake, also the processing, the core processing and then the resolution of the loan as well. And I'm probably missing things when we saw dynamic interactions, we saw documents, we saw rules, we saw AI, we saw RPA, we saw integration, we saw DocuSign, the ability to effectively manage this process to create a better experience for the customer, but also to mitigate risk, mitigate fraud and to execute at pace. So, Nisha, again, thank you so much, really appreciate it. So as we're getting ready to wrap up this session, I really wanted to highlight how Appian can help with PPP. We think we have a unique message to the market around fast deployment, easy to change, low fixed price. Ultimately, what we're trying to do in the marketplace is help our customers derisk their ability to engage in PPP and get closer to predictable outcomes with the PPP program as part of their lending portfolio. In terms of fast deployments, we're saying -- we're clear that we're talking about days, not weeks, and we're already engaging with some of the largest banks and financial services institutions in the world. They are leveraging the Appian platform to manage their PPP programs. We're talking about easy to change. And Nisha demonstrated that in one of the views where we actually acknowledge that components of how this program's going to get run are likely to change. And being able to put the power of that change in the hands of the business without having to go back through a software development life cycle is really, really important here. And then last but not least, a low fixed price, $25,000 a month, again, with the objective to derisk and make this process a lot more predictable than what we're seeing in the tactical approaches that most financial services firms are taking today. So with that, I'd be amiss, if I didn't talk about Appian just at a high level, just a little bit. I think it's important for folks to note that don't maybe know us as well is that we do a lot of work in financial services. We're very proud of the work our customers are doing with the platform to solve some of their mission-critical challenges. We're representing only a subset of the firms we do business with here on this page. We're sharing the ones that are public. Ultimately, the way we look at this is there are lots of small and medium-sized businesses that are really struggling, and they're trying to do the right thing, we think there's a perfect marriage here of helping our customers engage quickly, but also in a way that helps to mitigate risk, create full accountability for how to engage in executing this process. And then really, in the marketplace, be able to support the intent of this program, which is to provide relief for the small, midsized businesses. So we're a very excited to play our role. We would love to engage with you on your PPP opportunities and challenges. I will call out the link on the bottom here, appian.com/ppp. And I wanted to thank you all for your attention. We do have some questions that we're going to take now. Kevin.

Yes. Thank you, Mike, and Nisha again. I know we have a few minutes left so maybe we'll just take a couple of these. We had, I would say, more than one question regarding similar programs by governments other than the U.S. government and how Appian is addressing those?

Yes. Nisha, I'm going to take that, if you don't mind. Yes, 100%. We're seeing, obviously, the pandemic is -- it's global. We're seeing a mirror programs PPP elsewhere around the globe in the U.K., for example, CBILS. I can note that one of our customers, one of the largest banks in the world, is leveraging the Appian platform to build a unified lending solution that covers CBILS, but also PPP. So their objective is how do we support all of these mandates and do that consistently. So we're seeing lots of engagement around CBILS. But I've also seen other programs, for example, one of the largest banks in Spain who's building their -- the Spanish equivalent on the Appian platform as well. So yes, it's a global pandemic, and we're helping with those other programs as well. And a small plug on CBILS, in particular, we are running a webinar to share the CBILS version of this demonstration on Monday, this coming Monday. Any other questions, Kevin?

Perfect. One last one before we close out, and this is for Nisha, I believe. Can you explain again just briefly how AI is being used in this concept?

Yes, absolutely. So AI, I think AI in this demonstration comes in where -- with the paper form. So when we ingest that form, we're using OCR, Google Vision, to read the form, extracts the data points out of that and bring that into the data structure within Appian and then use that for the process. And so that's kind of where the AI is coming in here. There are many other ways for Appian to use AI. That's just one example of how we're bringing it into the process.

Perfect. Okay. And on that note, I think we'll close out. Mike, any last words?

No. We're ready to engage, and we'd love to hear and help with your PPP challenges.

Perfect. Okay. Well, that's all the time we've had today. Thank you, again, Mike and Nisha, and thank you, everyone, for joining us. As mentioned, this session is recorded and will be e-mailed to you after this webinar. To learn more, visit appian.com/ppp for more information. And again, thank you so much for joining us and take care, everybody.