While many mortgage lenders have turned to software as a service for their core systems and database management, others continue to pursue a purely proprietary technology strategy. Whatever tech model they embrace, mortgage industry players are looking at desktop and server virtualization as a key component of their hardware strategy. Meanwhile, lenders and servicers alike wrestle with the vexing security and bandwidth issues that come with managing smartphones and tablets.
“If we were starting fresh today, I would invest nothing in data center hardware,” said E.J. Kite, chief information officer at Dallas-based Wingspan Portfolio Advisors. “The availability of powerful server technology in the cloud, such as Amazon’s Web Services, eliminates the costs required to build data centers.”
Craig Focardi, of Boston-based advisory firm TowerGroup, said the biggest issues surrounding lender and servicer hardware purchasing decisions involved the multiplicity of devices—laptops, smartphones and tablets—and who pays for them.
“Some companies will allow loan officers to purchase their own smartphones and reimburse them,” he said. “That works if security, such as Good For Enterprise, is installed,” he said.
GFE is a behind-the-firewall wireless corporate email and data access system that helps businesses manage employees’ mobile devices.
“The general point is that as consumer preferences in electronic devices change more quickly than lender IT departments can respond, IT departments are allowing employees to combine personal and work devices,” Focardi added.
Keven Smith, president of Southfield, Mich.-based loan origination system vendor Mortgage Builder, said that out virtualization and migration to hosted, SaaS-based technology are the most important factors when mortgage lenders are developing their hardware acquisition strategies.
“70% reductions in IT costs are easily verified with SaaS,” said Smith. “There aren’t a lot of moving parts needed. IT departments need a lot less people.”
“Most of our customers lately are SaaS customers,” he continued. “When we go into a site, our goal is not to have them replace their hardware. The only thing that changes from licensed LOS software to SaaS is one server. We maintain the database as well.”
