MReport May 2020

TheMReport — News and strategies for the evolving mortgage marketplace.

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40 | M R EP O RT FEATURE can be leveraged instead of "built" into a vendor's application. As a result, costs can be streamlined and overhead reduced. Cloud-native systems also speed up the development process. Software changes are more easily made with cloud-native technolo- gies because code can be written and pushed immediately into the cloud and made available for lend- ers. At LoanLogics, for example, our cloud-native software develop- ment is done in two-week sprints. Because we know what our clients are looking for, we're able to develop code, test it, and go into production rapidly. We don't have to worry about long deployment cycles, memory, or capacity. It's all automated in a cloud-native envi- ronment, so we can move nimbly and quickly. One potential downside to cloud-native development is that some lenders may not be able to keep up with the pace of new software releases and features. They still need people on their side to manage and test updates to software from an operations stand- point, so the communication and the cadence of new development has to be well thought out. That being said, with cloud-na- tive development, technology pro- viders are able to introduce new features and functionality and let lenders choose whether they want to adopt them. They can basically toggle new functionalities on or off, so they are not forced to adapt to new tools or features if they're not ready to make the change on an operational level. A Perfect Time to Evolve C urrently, cloud-native tech- nologies are not being fully embraced by the mortgage indus- try. That's likely to change quickly because the pressures lenders face today to lower costs are not likely to go away soon. Cloud-native solutions can be deployed rapidly and allow lenders to scale their businesses quickly, enabling automation that helps them process higher loan volumes at a faster pace without the need to add extra staff. For example, there are cloud- native solutions available to lend- ers today that allow them to au- tomate the process of identifying and classifying loan documents as they are received and extract loan data inline and in real time. Normally this would take hours for human staff to perform, but with cloud-native solutions, it can happen in seconds. This frees up a lender's staff to focus on excep- tions instead of managing each document individually for every loan file. So how do you know whether your software vendor is using cloud-native technology? You simply have to ask—but you must also be knowledgeable enough to understand the difference between cloud-native and cloud-enabled. Many companies will say they use Amazon or Microsoft, but is their technology built in the cloud? Is your provider leveraging all the different features available in the cloud? Are they taking ad- vantage of best-of-breed database technologies or microservices that can be independently updated? Lenders need to be very savvy to ask the right questions and recog- nize the right answers. While cloud-native technology is just getting off the ground in the mortgage industry, at some point in the future, it will be everywhere. From both a cost and scalability perspective, the benefits are simply too great to ignore. Ultimately, the early adopters of cloud-native technologies will be able to reap the benefits of best- of-breed technology, a better user experience, and more frequent, less disruptive software enhancements. While we're in a time of great uncertainty in our industry, the one thing we can be certain of is that technology will remain a key to success. Cloud-native is the latest advancement that is acceler- ating how easily technology can be adopted and adapted. Lenders that seek out solutions built in this way are likely to realize cloud-native's value early, prioritize vendors who use it, and stimulate even more demand for new innovations in this space. . PAUL VANCHERI, EVP of Technology at LoanLogics, has over 35 years' experience in financial services and Department of Defense IT and regtech. Vancheri has worked closely with executives and corporate boards in the financial services industry, including at Finastra and Fidelity Investments, to help them navigate through complex decisions involving technology, business strategy, and global operations. There are cloud-native solutions available to lenders today that allow them to automate the process of identifying and classifying loan documents as they are received and extract loan data inline and in real time.

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