Mass Customization and Technology: A Guide for Creditors

How can lenders choose a tech stack that lets them customize product offerings at scale?

In the factories at the dawn of the age of mass production, scale was achieved by simplification (think of Ford’s offering for the Model T: “any color as long as it’s black”). Today’s firms can’t do that, whether they’re producing cars or mortgage loans. Lenders have to be able to serve different types of customers efficiently – or lose them to someone who can.

What’s more, today’s mortgage lenders have to be agile, able to quickly adapt to changing market conditions. To do that, they need a “factory” that’s powered by technology – what two Harvard Business School professors recently dubbed the “AI factory.”

But there are a dizzying array of mortgage technology solutions on the market, all promising to make lenders better, faster, smarter – and to do it for cheaper than the competition. So which tech solutions are the “right” ones? Here, I explain how lenders can filter the noise to identify the best tech for their operations.

Product Development: Define Your Ideal State

Today, a top priority for many mortgage lenders is product development. They want to be able to respond to the new rate environment by evolving features, adding new capabilities, and launching new products or changing existing ones.

But maybe your ideal state goes beyond that: maybe you also want greater efficiency, fewer vendors to manage, or fewer logins for your team to keep track of. Maybe you just want a different LOS.

What matters is defining your best-case scenario in as much detail as possible. When we work with clients, we ask questions that lead us to a clear vision of where they want to be so we can chart a path of where to go next.

Tech solutions: Assess What You Have and What’s Available

In an earlier piece, I touched on this a bit in the context of simplifying and consolidating your technology.

Many lenders have tech stacks that have evolved piecemeal over the years, such that today, they find themselves with dozens of tech solutions – some of which might have overlapping functionality. Often, the transition to better, faster, smarter tech – that’s cheaper than what they have today – involves consolidating and streamlining many of these solutions.

For example, maybe you could replace your standalone product and pricing engine with one that offers additional functionality. Or maybe you can swap out the feature-heavy platform or service you’re underutilizing for a lightweight version that does just what you need.

To do this effectively, of course, you’ll need an in-depth understanding of not only what each of your current tech solutions does and is capable of doing but also what competing solutions exist on the market so you can determine whether there’s a better option out there.

In some cases, there isn’t a better option – but the one you have also isn’t satisfactory. If that’s the situation you find yourself in, your best bet may be to build or customize the right technology.

If any of that sounds a little out of your wheelhouse, don’t worry. This is exactly where NTERSOL thrives. We’ve been helping mortgage lenders streamline their technology for years, whether that means building, buying, or some combination. We’d love to help you assess your current setup and help identify opportunities to improve.

Digital Technology: Check for Security Gaps

• What security controls does this vendor use in its dev process?
• What security customizations are available to my team (e.g., SSO, MFA, auto encryption, etc.)?
• How frequently does this vendor push updates? How does this vendor communicate security breaches?
• How easy is this technology to maintain internally?

Often overlooked in conversations about tech optimization is the importance of verifying the digital security and controls of the systems mortgage lenders are using.

First, it’s important to understand that security risks are a normal part of digital technology. As new risks are identified, software companies build patches or release updates to eliminate them. This is one reason you get notifications to update the apps on your phone and the software on your desktop regularly.

These updates can become cumbersome, though, when lenders rely on dozens of tech platforms. Updating one system may break a workflow originators rely on or trigger the need to update several other parts of the system as well as other interdependent systems. That work takes time. And when your IT team is updating existing systems, it can’t do the work of developing new systems (including those needed to power new products).

But making these updates is crucial. Mortgage lenders are beholden to a variety of regulatory requirements around protecting customer data.

Security checks aren’t glamorous, but they can help keep tech costs in check in that they can prevent major fines should security gaps lead to a data breach or similar.

As a result, part of determining what’s “best” for any given mortgage organization involves assessing the security risks a given tech platform exposes the organization to and the relative ease or difficulty of patching security holes in the context of the other platforms an organization uses – and choosing technology that minimizes the time necessary for maintenance.

Business and technology: The Right Tech Powers Your Business Forward

In my last piece, I wrote about the difference between technology that dictates your business and technology that enables your business. Choosing the right tech is a matter of choosing the platforms that empower you to move forward faster and more easily.

If you’re interested in learning whether there are technology solutions that might power your business more effectively than the ones you have, get in touch.

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