How the Cloud is Giving Lenders Greater Control


Increasingly, mortgage lenders are making the cloud a priority in their strategic technology investments and gaining operational efficiencies through new cloud-based technology from large companies like Amazon (AWS), Google (Google Cloud Platform), and Microsoft (Azure). 

Google Cloud has even gone so far as to release a dedicated service for the mortgage industry, dubbed Lending DocAI. 

The cloud allows far greater levels of capability, reliability, flexibility and security to lenders because these established technology companies have the budget and resources to support extensive development teams comprised of the best and brightest developers and experts. Lenders, in turn, benefit from this economy of scale, all for a fraction of the price of a qualified, in-house IT team. 

Much of the conversation to date has focused on the artificial intelligence and machine learning aspects of cloud-based solutions and their impact on automating loan decisioning, loan origination and processing. By automating everything from routine data entry, to income and employment verifications, to document processing workflows, lenders are gaining operational efficiencies and cost savings on the origination side, significantly shortening the time-to-close while freeing up their staff to focus attention on more high-value interactions with borrowers.

And just as the borrower-facing benefits of the cloud are myriad, so too are the back-office benefits for lenders. When compared to a software as a service (SaaS) approach, for example, the degree of flexibility and control that the cloud enables is often better suited to the modern mortgage lending environment. The shortcomings of SaaS lie in the fact that, while a lender may see the outsourcing of a system and its maintenance as a benefit, they also give up a great deal of control in terms of how the technology fits within their business.

Whether it’s database management, when and how to conduct backups, or updates and changes to the system, with cloud-based solutions, the lender retains more control over the technology and how it can be customized to support lender-specific workflows. Cloud technology provides digital agility across the enterprise, so the lender gets to make their own choices regarding these issues.

Additionally, the pandemic has permanently changed the way that many lenders function operationally and for those lenders that have adopted more of a remote or hybrid office structure for their staffs, the cloud provides a secure, stable, easily scalable framework for team members (and even entire departments) to effectively collaborate, regardless of physical location.

From a security standpoint, current global events have underscored the potential risks that cyberattacks present and the large cloud providers are much better suited to combat this threat and protect lender data that is housed within their servers.

As the mortgage industry continues its shift from a refinance market to a purchase market, and as the greater economy feels the impact of ongoing supply chain shortages, inflationary pressures and global geopolitics, the key to success for lenders lies in flexibility and adaptability. 

Cloud-based systems are no longer a “blue sky” component of some distant future for the mortgage industry. Rather, they are already establishing themselves within our modern marketplace. As infrastructures built around cloud-based technology continue to become the norm, those lenders who have recognized this reality and have already embraced it will find themselves much better positioned for success in the current housing market and beyond. 

Brian Lynch is president for Irvine, Calif-based Advantage Systems, a provider of accounting and financial management tools for the mortgage industry.

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