One of the most significant things that affect a lender's ability to grow is the capability of its technology. Despite the rapid growth in database languages and non-linear computing, too many lenders are trapped in legacy loan origination software and servicing platforms that limit their ability to grow rapidly without dedicating extra resources to adapting the software and hardware. The key is to ensure that lenders utilize systems that are built on scalable architecture.
The newest innovative systems are three-tiered client/server applications, meaning there is a back-end service handling all of the business logic and computations. These applications will most often be designed to offload much of the business logic and batch operations to a web service, leaving the lender's workstation to handle what a client machine does best — displaying the user interface windows.
In order to fully appreciate the benefits of scalable architecture, it might help to explain the differences between the two generations of origination and servicing software platforms typically available to lenders. Older legacy systems were written as two-tiered client/server applications. Aside from the database service, there was no server component involved at that time.
An older two-tiered application hosts all of its computation and display work on the lender's machine. This all-in-one deployment has its own benefits, but an inherent shortcoming is that the dependencies of some work must be met on every machine that will run the software. These dependencies can make administering a large number of workstations somewhat difficult, especially when major changes are introduced across updated releases.
Workstations with three-tiered client/server applications are looking for a service to do their heavy lifting, and the benefits of a scalable architecture can be realized. The term "scaling" or "scalable" denotes the ability to increase the available processing power of a system through either adding more CPU/RAM (known as "vertical scaling") or adding more resources to a pool of machines/processes which distribute the load (known as "horizontal scaling"). The goal of any load-balanced or scaled application should ultimately be to provide reliable and highly available services. Understanding how the proper technology system can enable rapid growth, and adapting new tools to meet customer demands, is crucial to establish support from executives outside of the IT department.
Successful organizations in the constantly fluctuating mortgage industry consistently look to improve their operations in order to remain at the forefront of the competition. As the industry organizations take on more complex responsibilities, new technology must be incorporated to help support greater workloads as efficiently as possible. By leveraging technology built around a continuous improvement methodology, organizations can reap the benefits from a cost standpoint and ensure that they remain prepared for the future of the mortgage industry.
Aaron Lynch is Vice President of Technical Services and Chief Technology Officer of Financial Industry Computer Systems (FICS).