MReport May 2020

TheMReport — News and strategies for the evolving mortgage marketplace.

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Page 39 of 67

38 | M R EP O RT FEATURE I t's no big secret that techno- logical change happens slowly in the mortgage industry. One reason for this is that many companies are reluctant to change until it becomes a neces- sity. Another is that mortgages involve a lot of moving parts, in addition to many regulations and investor requirements. Even when new technologies are desired, they typically take time to implement, which comes with additional costs and resources. Right now, lenders are deal- ing with massive changes that are unlike any our industry has experienced before. Amid an unfolding global health crisis, the Federal Reserve has lowered interest rates to zero and lenders are being swamped with refinance volume while trying to operate with remote staff. It's a time of in- credible volatility and uncertainty, and no one knows for sure where everything is heading. It is also a time of incredible change with new innovations enabling the industry to respond in more flexible, automated, and virtual ways, all of which will enable lenders to speed the loan origination process, control staff costs, and maintain compliance. These technologies, which can be implemented, maintained, and enhanced easily and quickly, offer even more value and less business disruption. The good news is they are available today and reside in the cloud—but perhaps not in the way most lenders would think. The Emergence of Cloud-Native M any lenders probably haven't heard the term "cloud- native," even though it is not necessarily a new concept in the computing world. It is, however, relatively new for our industry. If this is the first time you've heard the term, you might think cloud- native is the same thing as being "in the cloud" or cloud-enabled. But there are distinct differences. Ten years ago, when the mort- gage industry first began embrac- ing cloud technology, it was seen mostly as a platform for expanding capacity. Instead of maintain- ing on-site servers, which are expensive to own and maintain, lenders could host their data in the cloud through virtual hardware and servers. The cloud has since evolved into a means of delivering software through the web. Today, most loan origination systems (LOSs), pricing engines, and other software are hosted in the cloud and delivered through web brows- ers as Software-as-a-Service (SaaS). However, while many software providers are continuing to move their solutions to the cloud, they are only using the cloud ge- nerically. When you peel back the onion, it becomes apparent that being "cloud-enabled" does not take full advantage of everything the cloud has to offer. Cloud-native technologies, on the other hand, are different because they are native to a cloud environment. In other words, they were designed and built in the cloud, not simply made accessible through the cloud. Cloud-native technologies are typically hosted by large cloud service providers such as Amazon, Microsoft, and Google, which provide cloud-native services for software developers. These services enable software companies to pro- duce and deploy code in the cloud much faster and less expensively than if they maintained their own IT infrastructure and simply made their solutions cloud-enabled. From a lender's point of view, these services enable cloud-native solutions to handle an almost unlimited demand and scalability. Most importantly, lenders that use cloud-native solutions are also able to leverage new releases and func- tionality much more quickly than when using only cloud-enabled solutions with longer software deployment models. Cloud-native systems also provide lenders with solutions that are highly scalable and available to meet the changing demands of their businesses. The Advantages of Cloud-Native T here are so many different as- pects to the cloud when you start talking about user experi- ence, scalability, and access to data and speed. These are all things that are associated with cloud technology. With cloud-native sys- tems, you have an opportunity to use the best-of-breed technologies that are all available in a cloud environment. Cloud-native systems, for exam- ple, are far more cost effective in the long run. For example, legacy software applications, even if they are hosted in the cloud, still need to perform maintenance and up- grades on all aspects of functional- ity tied to their operating system. With cloud-native technology, much of that functionality can be "outsourced" to the best-of-breed technologies generally accessible in the cloud. Things like identity management and a messaging bus Now Is the Time for 'Cloud-Native' Leveraging cloud-native technology can help provide scalability, cut costs, and tackle other challenges facing lenders—especially during the current health crisis. By Paul Vancheri

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