DS News

DS News December 2022

DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.

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Page 59 of 99

58 ere's little question that servicers need good technology if they hope to continually streamline their processes, meet their customers' digital demands, and drive seamless servicing that creates powerful results. However, the traditional mindset that servicers either need to buy technology or build it themselves has handcuffed the industry's digital growth. While there's logic behind both strategies, each can create siloed outcomes adding to higher costs and perpetuating this either/or approach. It is why so many organizations continue to struggle to improve overall efficiency. Yet, there is a more innovative path to choose that involves leadership, vision, and modern technology, in which servicers can have it all. THE PITFALLS OF DIY It's not as if servicers can't build their own technology. Any company with enough money can hire software developers and IT profes- sionals and get them to build whatever they want. However, building technology is a major investment of time and resources that rarely goes the way servicers think it will. e fact is that servicers were never intended to be technology developers, which is why so many DIY efforts end up going astray. For example, most attempts to build technology in-house are done reactively and are focused on managing or limiting the impact of an isolated issue. Such efforts could be as minor as creating a last-minute spreadsheet to building out a complete point solution that solves a cur- rent, short-term problem. Because these efforts are done reactively and rarely protect data in- tegrity—often reusing critical data that produce error prone outputs—they not only fail to deliver real improvement but often create additional obstacles and costs. In fact, at the MBA Annual Convention in Nashville last month, someone privately admitted they had lost $50 million on their own technology initiatives, which are now being rebalanced with new vision from the company's leadership. Of course, I understand the urge some servicers have to build their own technology or buy technology that has to be built out. ey might buy off-the-shelf software, but the bulk of off-the-shelf mortgage servicing software has failed to evolve with changing borrower expec- tations and a shifting marketplace that includes new regulatory requirements, pandemic-related challenges, and volatile interest rates. Newer technology can also be equally problematic. Some of the newer fintech products that have entered the market are not yet proven and were built by companies that lack industry knowledge all making the buy rather costly. On the other side, building your own technology or building workflows from scratch with a software vendor uses up a servicer's precious resources on areas that are not their core business. It places too much responsibility and pressure on a servicer's staff, which leads to burnout when people are forced to constantly By: Jane Mason Feature MANAGING 'BUY VS. BUILD' The traditional mindset that servicers either need to buy technology or build it themselves has handcuffed the industry's digital growth.

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