Summary
Mortgage banks' buy and build strategy for computer system development
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Extract
Getting a payoff from technology.
The computer development strategy that seems to best fit the mortgage industry today is one called "buy and build." This approach means buying a system from a vendor that provides a solid foundation for customization. This could produce the long-awaited payoff from new technology.
According to data compiled during the past nine years by SSP Research in its MORTECH industry surveys, the number of lenders using their own custom inhouse system has been going down, from more than 10 percent in 1988 to 4.4 percent in the recently completed 1997 survey data. Moreover, when surveyed lenders were asked whether they would prefer to buy or build their next system to meet today's complex functional requirements, only 3.6 percent indicated a preference for building. When one considers the significant advantages of leveraging the creative ideas of numerous other lenders, a decision to buy and build makes a great deal of sense. Buy and build gives the lender the basic vertical market software that every lender needs with the flexibility to easily build the added features the business requires. With the advent of risk-based pricing, automated underwriting, intelligent workflow, expert systems, open databases, Internet connectivity and year 2000 issues, along with the compe...See the full content of this document
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