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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 30 January 2025 F E A T U R E S T O R Y MORTGAGE DIGITALIZATION 2.0: MOVING BEYOND INTEGRATIONS B y M I K E Y U I n the modern mortgage indus- try, lenders are not just setting themselves apart on who has the best Super Bowl ad or the biggest branch footprint, but increasingly also on their approach to technology. Today, technology is driving differentiation across the customer experience, loan officer experience, and overall opera- tional efficiency. As these technological capabilities become more central to financial institutions, a deliberate ap- proach to tech strategy is no longer op- tional—it's essential. Gone are the days when lenders could simply purchase the same one-size-fits-all solution as their competitors and call it a day. However, we all know that the vast majority of lenders can't actually build all of their technology in-house—nor do they necessarily want to. The future belongs to those who can effectively navigate the complex landscape of where to build and where to partner with existing vendors. The Importance of a Modular Architecture F irst and foremost, lenders must have in place a technological founda- tion that supports the implementation of whatever those build-versus-buy decisions are. A successful strategy on this front involves creating modular architecture, driven by APIs that seam- lessly integrate multiple components. A modular approach—where the overall system is divided into smaller, indepen- dent, and interchangeable components that can be developed, tested, and main- tained separately—offers lenders several advantages: • The ability to leverage best-in-breed solutions for each piece of the stack, rather than being locked into a single vendor's ecosystem. • Flexibility to upgrade individual components as new capabilities or vendors emerge, without having to overhaul their entire tech strategy. • Opportunity to build custom solu- tions in-house to drive differentia- tion in areas they deem strategically important while relying on off-the- shelf solutions for more commod- itized functions. Tightly coupled, monolithic architectures limit the speed of change possible for lenders and stifle innova- tion. However, transitioning to a more modern, modular strategy has proven to be difficult and complex. The Challenges of Executing This Strategy I n order for this approach to be viable, the different components of a lender's stack must interact seamlessly. Integra- tions make this happen and are the key to building an effective, modular tech stack—which is why they dominate the mortgage tech headlines. However, customized integrations are expensive and time consuming, and lenders often spend a disproportionate amount of their technology and engineering re- sources just integrating vendors, rather than developing tech that actually drives differentiation. These custom integrations can even bring unintended consequences, such as impacting other elements of the tech stack. Once distinct systems are finally integrated with each other, friction be- M I K E Y U is the Co-founder and CEO of Vesta, a next-gen LOS redefining origination through data-driven tasks, validations, and native automations. Before founding Vesta, Mike was an early product manager at Blend, where he launched key components of its flagship mortgage platform and established new business lines such as Blend Insurance. With a master's in AI from Stanford University, Mike leverages his technical expertise and vast network of Silicon Valley leaders to stay at the forefront of advances in technology that will shape the future of the mortgage industry.