As 2023 kicks off, a primary focus area for mortgage lenders is undoubtably cutting costs while still gaining market share. As part of the cost cutting agenda, platform consolidation has the potential to make a significant impact in lowering the total cost of ownership (TCO) of existing software and business operations.
We’re hearing the same patterns when we talk to our clients. They are stuck with a legacy of multiple, disconnected platforms making it very hard to scale or make changes. Previous systems that have been blu-tacked together to navigate technology and budget restrictions – understandable and valid at the time – but harder to unpick later down the line. There’s a better way to modernise your mortgage technology.
Making technology investments more wisely
In a study commissioned by nCino last year with Celent, we heard that over 50% of the 37 banks and building societies surveyed said they were expecting to make a significant change to their loan origination system in the next two years.
In the current market and with restricted budgets, investments need to be made wisely. To really lower the TCO, lenders should look to transition off legacy technology and consolidate systems and products onto one platform.
Lenders that strategically implement a platform approach will set themselves up to succeed, keep pace with market changes, innovate, and get ahead of changing customer expectations.
That’s easier said than done…
Research by Oxford University and McKinsey reported that 66% of large-scale software projects go over budget and 33% are delivered late. Digital transformation is a popular buzzword, but a question we hear from a lot of our mortgage clients is where to start? It’s more than just digitising manual processes.
Here are the top considerations for any lender looking to re-platform their mortgage business based on key learnings working with our clients:
- Consider the wider strategy
Lenders that view re-platforming as just one part of the wider transformation agenda are more successful. It’s more than just system replacement. Work from executive leadership down to determine key objectives and use that to ensure the right technology and vendor is selected to achieve goals. An experienced partner will build the case with you to help the organisation stay anchored to a ‘northstar’ as progress is made through the re-platforming journey.
- Strong programme management
It’s important to align business and technology teams. It sounds simple but often these teams are misaligned at the start of a project. Take stock of people, processes, data and technology to define a target state and create alignment on both sides of the business. Once project scope is determined, break the implementation into smaller increments and assign ownership at each step. This improves accountability and allows progress to be tracked more easily.
- Prepare your people for implementation
Poor digital adoption is arguably the most significant indirect cost responsible for driving up software TCO. All this work will go to waste if staff aren’t enabled to maximise the full benefits of the new tech. Build teams with both project management and business process experts that have knowledge of the legacy system and new technology. Readying talent from before project kick-off allows for maximum involvement and buy in on the entire process and prepares your teams for continued success post go-live.
- Answer for the exceptions
Having an MVP shouldn’t mean there’s no answer for exceptions. Exceptions are often kicked down the road because they are difficult, but often blocks the ability to remove legacy systems. Re-platforming is a good opportunity to look at the whole business and let go of anything that doesn’t fit the end vision. Aim for continuous improvement with an agile mindset that is aligned to strategic goals.
- Establish robust baselines to measure success
Metrics by which to measure success are often an afterthought. Clean data is also an inhibitor that prevents an honest view of the before and after. Lenders who do define and measure objectives and KPIs well have a better view of their business and a baseline by which performance can be judged.
Selecting the right partner
When rolling out new technology, it’s important to prioritise a vendor relationship that will help with the configuration, implementation, and internal adoption of a new platform. It’s not a one size fits all approach, and any implementation partner needs to understand the exact requirements of a lender to ultimately achieve a greater ROI.
When nCino embarks on these projects with our clients, we see ourselves as more than just a platform provider; we drive meaningful business transformation. Our clients have influence over our roadmap, and we invest more than 25% of revenues into research and development of our product so clients benefit from continuous innovation.
On top of that, we seek to make our clients self-sufficient when it comes to configuration and for more complex changes, our Managed Services team can be hands-on with implementing new capability and optimising existing functionality, so your institution can start realising value as soon as possible.
Thomas Chaplin is head of mortgage product at nCino, EMEA
Learn more about nCino’s mortgage solution or download our white paper on ‘Top Tips for a Great nCino Implementation’.
