Nearly everyone in lending agrees at this point that a digital experience is mandatory. The question now is not “if,” but “how.” One of the questions we hear most frequently from lenders is why they need to work with a partner at all. Wouldn’t it be easier to get what they want, and less costly, if they just built it themselves?
Frequently, the answer to that question is “no, not really.” Here’s why.
1) Time to Market
Building a solution from the ground up takes time. It sounds straightforward enough to just build a software piece to solve a problem, but as lenders know all too well, “straightforward” in mortgage is relative. The complexity involved in building a robust, scalable, secure and compliant digital loan experience frequently takes people by surprise - including us, when we first sat down to build this thing way back in 2012.
Now it’s 2018, and the Roostify platform is a mature offering that supports some of the largest, most complex lenders in the nation. With an established solution, your technology provider has already done that hard work. You get the benefit of years of product development and deployment expertise, without having to actually invest those years yourself.
That’s no small benefit; while one lender is burning a year or more reinventing the wheel, their competitor who deploys a partner solution is up and taking applications. With home lending projected to tighten up as refis continue to drop, you don’t have time to wait on a digital experience.
2) Innovation Keeps Moving
So suppose you do decide to build a solution yourself, and your dev resources spend the next year or so creating what you’ve envisioned. You launch, and then the project is done, right?
Not exactly. You’re launched, but the cold truth of digital is that you’re never really done.
The digital lending space has come an incredible distance from just a year or two ago, when “leading online experience” just meant a nice-looking POS. Now, the POS is considered the least important part of the equation, with much more focus on extensibility and data aggregation.
Keeping up with the latest innovations is a major advantage of SaaS solutions, which are continuously updated as part of your subscription. Unless you’re willing to dedicate the resources to essentially run an in-house SaaS product, your cutting-edge proprietary solution will quickly become outdated as the market moves on.
3) Hidden Costs
This one is somewhat counterintuitive, because cost is usually cited as a prime reason to build in-house. This is partly based on the idea of paying once for a specific project as opposed to continually for ongoing development, which as we discussed above is not necessarily correct. But even assuming the fixed-cost project, there are a number of hidden expenses to consider.
First is during the spin-up for development. There’s a saying “garbage in, garbage out.” If you want a top-tier solution, you’ll need to hire top-tier talent, and top-tier talent is naturally in high demand. Landing those high-caliber devs can be expensive and time consuming - which brings us back to problem #1.
Once the solution is launched, it needs to be maintained. Browser compatibility? Storage? Backups? Compliance changes? That’s all you. Most significantly, security is all you too. The constant arms race between businesses and cybercriminals means sufficient security will always be a moving target, and one that you’ll need to constantly research, develop, and maintain your system against.
4) Future Uncertainty
You can certainly build a proprietary system to support your current tools and workflows. But what happens when those change? If you change your LOS, or your team structure, or a service provider, can your digital lending solution adapt without a lot of costly redevelopment? If your business needs change significantly, can your proprietary solution rapidly scale to address the new situation?
Roostify is architected as an API-based platform, rather than a static product like a POS, specifically to address these scenarios. If your needs change, the platform makes it easy for your Roostify environment to change with you. Since we’re built on AWS, you also get one of the major benefits of cloud - seamless scalability, without disruptive software or equipment changes.
Our last issue relates to each of the previous four, and that’s the issue of what you want to focus on.
You know your business inside and out, but being an lending expert is not the same as being a lending technology expert. To do all the things we’ve touched on above - architect a solution, hire top talent, continually update, design to scale - you need a considerable level of in-house expertise specifically in developing technology. Without it, you don’t know what you don’t know, and it can be difficult to execute on creating the technology solution you need.
All of this is certainly doable, but it raises a very important question: is this the business you want to be in? Does it make sense for your organization to invest this much money and energy in essentially becoming a technology developer, rather than investing it in your core business?
With a SaaS solution like Roostify, you’re getting a partner whose business is wholly focused on building the technology solutions you need. You’re able to concentrate your team’s resources towards lending, while still getting a top-shelf digital product.
At first glance, building a solution in-house can seem like the best choice (or at least the most cost-effective one). But before you decide to take the leap, make sure you’ve thought through all the angles. You might decide to give “buy” another look.