Using SMTP Mail Relay instead of Exchange

I am trying to use an SMTP Mail Relay instead of Exchange (due to licensing issue) for the FIM Service to send out notification and approval e-mails. So, in the FIM config file, I changed the Mail Server configuration from:

    <add key="mailServer" value="https://XXXX/ews/exchange.asmx" />
    <add key="isExchange" value="1" />

 to:

   <add key="mailServer" value="smtp.lab.XXX.com" />
    <add key="isExchange" value="0" />

Then I restarted the FIM Service. However, the mail feature has stopped working after switching to the mail relay. Is there any further configuration work needed somewhere else?