Almost 10 years after it became the business world's biggest buzzword, cloud technology is everywhere, but few mortgage companies have fully capitalized on its efficiency and flexibility advantages.
Virtually every type of software used in our industry can now be
Yet, while just about every company in our industry depends on the cloud in one form or another, they have yet to optimize its benefits.
The opportunity to do so comes at a good time since mortgage loan production costs have not decreased substantially in recent years — for many lenders, in fact, costs continue to go up. And the operational challenges of transitioning to remote teams and managing volumes without increasing staff can be made easier through the latest advancements in cloud computing.
It's time for our industry to take the next step in our use of cloud applications. And that next step is embracing the added value of cloud-native technology.
Unlike cloud-enabled solutions, cloud-native technologies do not simply rely on the cloud to host software and eliminate the need for servers and data centers. Rather, cloud-native technologies are those that have been originally designed for and built in the cloud. As such, they provide many benefits to mortgage companies that cloud-enabled technologies do not — benefits that are particularly valuable in today's environment.
Right now, the few software vendors in our industry that are leveraging cloud-native technologies are writing and deploying code to their lender clients with much greater speed than legacy providers are able to deliver. That means lenders have been able to access new product releases and features much faster in support of greater levels of automation in their business. This is especially helpful now, as lenders can more aggressively reduce the manual processes that have been made more difficult during the transition to remote workforces.
Because cloud-native solutions are hosted by large cloud service providers such as Amazon, Microsoft or Google, they can leverage the scalability and performance these providers have built into their platforms. Lenders in turn benefit by easily managing sharp increases and decreases in transaction volume and/or users. This has become a critical capability in today’s market, with lenders currently swamped by massive increases in refinancing and forbearance requests that drive software usage.
Cloud-native technologies are also more cost efficient. Legacy systems hosted in the cloud — but not originally built for a cloud environment — still require maintenance and time-consuming upgrades to support the application's operating system. Cloud-native solutions, on the other hand, leverage best-in-class cloud service provider tools that are managed and maintained by the provider.
But wait, there's more. When machine learning meets cloud-native, only good things happen. A great example of this is what we are seeing in the area of document processing.
Lenders can use cloud-native software and benefit from the best-in-class security, scalability and performance cloud service providers offer to identify and classify loan documents and extract and validate loan data in seconds, on-demand, from anywhere. Because of this, loan officers and processors have been liberated from manually determining document types and using stare-and-compare techniques to put data from documents into their loan origination systems.
Instead, they can now rely on machine learning automation to do the heavy lifting and cloud-native technology to ensure scalable, available performance, while they simply focus on managing exceptions. As a result, documents and data are validated earlier in the process, as they are received, and work time goes from minutes to seconds per document. That adds up across the origination process and the hundreds of documents it involves.
While cloud-native technologies have been around for some time, their use in the mortgage industry is relatively new. In fact, many don't even know what it is and what additional value it provides. But it won't stay that way for long.
Cloud-native solutions are the next stop in our industry's evolution into the cloud. They will allow lenders to operate more flexibly and respond more quickly to shifting demands, with less disruption to their businesses. A side benefit is what less disruption, quicker access to new functionality, greater automation and almost limitless scalability will mean to the overall borrower experience and a lender’s own cost structure.
To be sure, addressing the unique business challenges we face as an industry as a result of the pandemic, which includes the safety of all our employees, is a top priority. One of the best ways to address these challenges is to build on the benefits that cloud technology has already afforded us and seek out the additional value cloud-native applications can provide. And in an increasingly isolated business environment, there is no better time to get started than now.
