The old debate over the primacy of best-of-breed tech stacks versus an all-in-one platform was resurrected during the global pandemic. As the industry struggled to keep up with unexpected loan volume, many of the new systems that lenders had put in place over the past few years didn’t meet their expectations.
That’s probably because many lenders were using legacy lending technology that incorporated new point-of-sale (POS) technology bolted onto the front end.
Today, perhaps for the first time, the best-of-breed versus all-in-one debate has become very important. With an everchanging lending environment and escalating competition from new fintech lenders, choosing the wrong technology approach could have major ramifications for a lender.
But those aren’t the only drivers pushing us to rethink our technology platforms. Every lender making loans today, whether they are a bank, credit union, or an independent mortgage bank, is finding themselves operating in a connected marketplace. Modern APIs built on open architectures are making it easier and more efficient than ever to share data between systems.
On the one hand, that’s good news for the industry, because lenders have more options than ever before. On the other hand, it can be challenging to disseminate the true capabilities and benefits of the technology that is available. Choosing the right mortgage loan origination technology is always more difficult in a crowded marketplace.
One of the first places we saw this was on the front end of the process. Seemingly overnight, we saw a great many new POS technologies hitting the market, all promising to connect seamlessly to the lender’s LOS and to substantially reduce cost. But most didn’t deliver on that promise.
Finding The Tools You Need In A Crowded Market
While attaching a POS to a legacy LOS provided some initial lift for some lenders in the beginning, it doesn’t provide the same benefits as the new end-to-end systems can. So, what should the lender be seeking? Here are the key points to keep in mind:
Start your search with a clear mind. Lenders must look beyond the hype and buzzwords. When one vendor says best-of-breed, they may mean something completely different than another vendor. Don’t rely on terminology to make your decision.
Find out if what you’re looking at is a single platform solution. Did the same team build all the modules that make up the system? Did the POS come from another vendor and get bolted onto the LOS?
Confirm if the platform was built from the ground up on new software architecture or is a retrofit of older technologies that has been patched to function in today’s market. No legacy platform can be built in pieces and be as strong as purpose-built technology developed with long-term scalability in mind.
Finally, find out all you can about the implementation process and after-sale vendor support. This is often where the rubber meets the road on the long-term viability of the lender/technology partner relationship.
The Benefits The Lender Can Enjoy
It’s becoming abundantly clear that retrofit technology is not a sustainable solution over the long-term. Ultimately, this search will lead to a modern LOS that has everything the lender needs to interact with borrowers and walk them through the application process (POS) and process the loan to close (LOS).
With a single-system approach, everything is connected, so you know what questions have been asked, what tasks have been assigned to the borrower, and what information has been received. The benefits can only be fully realized on a single platform that includes the POS and LOS capabilities on the same system, not connections between disparate systems.
A single system, such as Origence’s mortgage platform, will position lenders to dramatically improve the lending process and borrower experience. Today’s modern loan origination systems are high-performance machines that seamlessly take the lender and borrower completely through the process. Comparing that to just tacking a POS to the front of an LOS is like putting a Ferrari engine in a Camry, and wondering if all the necessary elements are in place to support that engine.
All-in-one loan origination platforms like Origence are leading the way in today’s marketplace and they are better than ever. I encourage you to discover what a difference such a system could make in your business.
Michael Farris is Vice President of Strategic Solutions for Origence. In his role, Michael leads the Strategic Solutions group, which focuses on large volume mortgage lenders. A seasoned industry veteran, he previously served as Senior Vice President at Digital Lending Solutions, and prior to that he served as Senior Vice President of Digital Docs Inc. for 10 years. His focus on integrity and process-driven sales solutions through the years have resulted in negotiated contracts with top 100 lenders in diverse technology and service industries.
Origence, a CU Direct Brand delivers the ultimate origination experience. We help lenders increase loan volume and income, create efficiencies, and fuel growth through our automotive, lending, and strategic solutions. Today, our next generation technology solutions and services span across indirect lending, mortgage and consumer loan origination, digital retail, analytics, marketing and CRM, auto shopping, identity theft solutions, consulting, and outsourced loan processing. We help financial institutions optimize the customer experience, leveraging integrated solutions to bring efficiency, productivity, and profitability to lenders. Visit www.origence.com for more information.