The Mortgage Technology Industry Today: 3 Themes in the Top Service Provider Ranking
They say change is constant, but for mortgage lenders, that might be the understatement of the decade. Recent years have brought the highest of high and the lowest of lows. Now, every completed mortgage brings a competitive advantage to its lender and increases the lender’s chances for survival. Lenders rely on proven and cost-effective technology to assist them in getting that competitive advantage.
Since the market has started to bounce back, the corresponding trade media, like Mortgage Technology, have acknowledged that more now than ever, lenders need technology – but with no room for error, they also need help identifying what characteristics to look for in any product they pursue.
Being in the industry for quite some time now, I often look to the “top 50” list that Mortgage Technology magazine puts together annually, called the Top Service Provider list. Because of the bounce-back stage that the mortgage lending industry is in right now, I was particularly interested to see what themes would run through the list. Here are my top three observations:
1. The category associated with a type of technology doesn’t matter.
Fifty vendors made the list, but they represent a very wide range of technology (for example, Hyland was the only enterprise content management vendor on the list). Now, I get that the list is based on which solutions have proved themselves to be innovative within the past year, but I still think it’s interesting that Mortgage Technology is sending the message that it’s not necessarily the kind of technology lenders use – it’s choosing which type of technology meets the needs of the organization.
2. Efficiency drives business.
If the type of technology really doesn’t matter, then what does matter is how much efficiency it brings to the lender. In the short article previewing the list, the author sends the message that lenders need to look to technology to automate manual and time-consuming processes in order to increase profits. After all, the faster you can process refinances and modifications, the faster you can focus on getting new mortgages – and profits – in the door. Just as importantly, customer service levels and opportunities for new business stay high.
3. Technology has to prove itself.
Among all the articles and even the ads in the magazine, the theme that resonated most was “proven technology is safe technology.” Lenders can’t afford to risk investing in IT that might fail a few years from now. And while there are some new players on the Top Service Provider list, looking at it, most are repeats.
To succeed in today’s lean, cost conscious, regulated industry, lenders must invest in proven technology that is user friendly, easily adoptable and results in faster loan processing for recognizing profits sooner. Utilizing a proven, stable vendor with established roots in the financial services market, lenders and servicers will have a better chance expediting loan closing and funding and staying ahead of the competition.