Most executives know almost intuitively today that for their businesses to succeed alignment of purpose, strategy, organisational capabilities, resources and management systems is key in delivering the goals they set. All these things are inextricably connected in delivering success. However, their overall collective strength is only as good as the weakest link.
In the world of mortgage tech, you see misalignment in the ongoing use of many legacy systems and legacy providers. Technology once considered leading edge is usurped and the prospect of decoupling for both parties almost become an existential threat. It’s particularly true now that the era of cloud native solutions has arrived. Non-alignment may not be visible to end borrowers as front-end digital user interfaces often mask legacy IT behind the scenes, but these systems and their support functions often involve manual mid-office functions that are lineal rather than automated and flexible. Yet while many understand the risks of non-alignment, the perceived risks and cost of executing change deters many from acting – particularly when that re-alignment is complex. As a result, business as usual concerns take-over to the detriment of addressing the real issues. That is a perception based in old experience. Today, the opportunity is a continuous delivery of transformational steps that can involve running legacy and new platforms together as you evolve.
Affordable, real-time cloud native solutions are changing the dynamics of IT partnerships between mortgage lenders and their tech partners. Where once misalignment was almost baked into the solution, flexible business goal alignment with much lower operational risk in changing can now make embracing new ways of doing things eminently affordable.
This matters because since the 1970s and 1980s years of legacy IT are now generating compatibility issues, creating data silos and security issues as well as performance and productivity issues that can lead to a lack of competitiveness. To make matters worse, the support of systems becomes the preserve of fewer and fewer individuals to the point where antique technology commands the expertise of antique restorers and the price tag that accompanies them.
The point of modern technology is that you have the appropriate amount of structure for today’s needs and retain a flexible set-up that allows you to meet the demands of tomorrow’s world. You eliminate legacy with principles that will allow you to reduce any such issues repeating themselves in twenty-years’ time. Configuration becomes key in an environment where you can easily add new technology because your system layers are connected via advanced API’s and system updates are continuously delivered from the cloud.
If legacy technology is accompanied by legacy thinking, it creates some very real issues. Interoperability is just one example. As digitalisation occurs through a value chain, no lender can afford to have systems that do not evolve to accommodate new ways of interacting with distributors, changes in regulation, and offer scale at an affordable investment. Putting plasters on deep wounds does not cure anything.
Many layers of legacy IT and thinking are costing lenders huge sums of money just to stand still. In commercial terms, the lack of alignment is expensive and diminishes business value. If you recognise your own business in any of the above, then we should talk.
Jerry Mulle, UK Managing Director, Ohpen
