TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/81276
FEATURE Are You In or Out? New data behind technology outsourcing points to some contemporary advantages from a tried-and-true strategy. By Phil Britt A to garner proponents among lenders. The advantages, according to supporters, include lower costs for the technology, better ability to keep up with compliance and other changes, and the freedom to better focus on the business itself. s the cloud and the release of some control of data continue to gain acceptance in financial services, outsourcing technology continues nothing new. And while finan- cial services have been slower than other industries to move to the cloud, they are increasingly The trend to outsourcing is 36 | THE M REPORT moving there today, accelerating the outsourcing trend. However, there are cons as well, others say, pointing to some loss of control and questions about reliability and access to data and systems when they are outsourced. "In a lot of ways, attitudes are changing; a lot of lenders are becoming a lot more comfortable with the idea of using a hosted facility, but with others it's the last thing they would want to consider," says Mark Todd, chief information officer for Gateway Mortgage in Tulsa, Oklahoma, which expects to originate about $1 billion in loans in 2012. "But just because many are more comfortable with the outsourced solution doesn't mean that it is the right decision for Gateway." Indeed, Gateway is bringing its loan origination system back in house after having the system in a hosted environment. "We want to own the data and the redundant components," Todd says, explaining that the lender needs to have access to data at all times, and that was not always the case in the outsourced envi- ronment. However, Gateway still uses outsourcing for "things that don't create value," like review of bills, Todd adds. Another important caveat for those opting for the outsourced solution, Todd says, is that even if the technology to handle com- pliance (e.g., documentation, sys- tems monitoring) is outsourced, it doesn't relieve the lender of