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Cloud Computing for Mortgage Lenders. New Options for System Deployment. Session Description.

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cloud computing for mortgage lenders

Cloud Computing for Mortgage Lenders

New Options for System Deployment

session description
Session Description
  • Cloud computing is a relatively new term for the use of virtualization technologies to reduce complexity by creating homogenized environments. Users of the cloud are focused on the services it can perform versus the underlying technologies used. What could this mean for the mortgage industry? Might we say goodbye to our origination and servicing systems? Could we stop spending hundreds of millions of dollars writing rewriting and enhancing these core applications?
  • This session defines cloud computing, discusses some of the common themes and business goals that cloud computing is particularly well-suited for, and identifies some common misconceptions. The panelists explore leading-edge implementations of cloud computing solutions addressing different problems across the mortgage lending lifecycle.
  • Moderator:
    • David Hamermesh, Research Director, TowerGroup
  • Speakers:
    • Lowell Alcorn
      • Managing Director, BearingPoint
    • Jason Marx
      • Vice President and General Manager, Wolters Kluwer Financial Services
    • Dain Ehring
      • Founder & CEO, Dorado Corporation
cloud computing is the next step in deploying technology resources

Deployment Model

  • Business Model
"Cloud Computing" is the next step in deploying technology resources

Delivery of applications remotely on shared basis via the Internet

- - rather than via installed software and IT infrastructure

Applications and supporting IT resources (network, hardware, software) consumed as a “service”

-- rather than managed internally as assets (rent vs. own)

Cloud Computing

“Software as a Service”


“Hosted Software”

“Web 2.0”

“Application Service

Provider (ASP)”


What Is Cloud Computing?

“network of networks”

“I don’t care what’s up there.”

“If you need software OR hardware, it’s not cloud computing.”

“on-demand computing”

case study step 1
Case Study – Step 1

Lowell Alcorn

Managing Director, BearingPoint

why implement cloud computing
Why Implement Cloud Computing?
  • Transparent /Reduced pricing structure aligned to business goals
    • Blended chargeback based on allocation & utilization
    • Reduce Costs by paying for peak usage during peak only
  • Reduced investment & better tracking of computing assets
    • Reduced overall investment through tighter discovery & management techniques
  • Streamlined manual processes and reduced error rates
    • React more quickly through datacenter automation technology
    • Goal is to have “on-demand computing (servers, storage, network, etc)”
  • Simplified service-levels provided in web-based catalog
    • Allow customer direct access through self-service mechanism
    • Better predictability through SLA contracts and customer centric operations management
implementation challenges
Implementation Challenges
  • Customer concerns about sharing resources
  • Visibility into a “virtual” service model
  • Lack of functionality & cohesion in datacenter tools
  • Time-to-market for new infrastructure requests
  • Overlap in roles / responsibilities for support teams
  • Demand based funding model
technology tools process frameworks
Technology / Tools / Process Frameworks
  • Lots of hardware / software & process frameworks to consider
  • Need a coherent strategy, aligning all parts of organization
  • If offering customer end-to-end service, need to publish real-time service-level metrics
infrastructure framework
Infrastructure Framework

Large variety of hardware and software products that make up the Application Hosting solution

Concepts like Clustering, Grid and Virtualization are not mutually exclusive, but rather pieces of the jigsaw puzzle

Goal of higher server utilization will have impact on Network and Facilities

To make it all work together requires 9 key domains of Instrumentation (or Tool Functionality)

case study 1 of 2
Case Study (1 of 2)
  • Background & Situation
    • The client today operates approximately 35,000 midrange servers and 9 PetaBytes of storage across over 100 major computing centers representing about $500 million in operating expenses annually and supporting over 4,000 business applications
  • Objectives
    • Objectives for cost savings of $100 million, with $24 million from the midrange optimization
    • The objectives of the midrange optimization program are:
      • Reduce the midrange cost structure by 45% within the next 3-4 years
      • Drive the utilization of the midrange servers up in a controlled risk managed environment
      • Transform how the shared technology group operates to balance significant cost reductions while delivering high quality technology service
      • Provide an environment where usage of resources in a shared computing environment that demand / supply availability and costs can be tied to the consumer of those resources
    • The bank also expected its partners to propose innovative solutions and investment models to share risk and reward with its own IT organization
case study 2 of 2
Case Study (2 of 2)
  • Approach
    • Conduct an IT Cost Saving / Financial Impact Quick Scan incorporating the review of in-flight projects, capital expense requests, etc. and the proposition of numerous cost saving recommendations based on industry experience
    • Develop an IT Cost Saving Initiative Database and Scorecard to prioritize all recommendations (“Just Do It” initiatives)
    • Implemented the Program Data Repository to inventory all relevant technology components, contracts, people data, etc. to monitor during Program Execution
    • Developed a 30/60/90 Day Plans to implement these initiatives and set the overall Transformation Program
    • Analyze/Select vendors implementation
  • Results
    • The objectives of $100 million savings was achieved and over $24 million savings was directly attributed to the midrange optimization program
    • Additional recommendations was incorporated into next year’s saving plan with similar objectives
    • A major overall Transformation Program was successfully launched and is being executed to achieve further savings
Jason Marx

Vice President & General ManagerWolters Kluwer Financial Services

Why Cloud Computing?

Challenges and Vision

Business Impact of Innovation



SaaS provides clear operational and financial benefits in how lenders deploy, manage, and pay for software

Implement Shared, Hosted Software

Add New Functionality

Exploit Networking

  • Customer Benefits
  • Increased user


  • Faster enhancements
  • Upgrade without

installing new software

  • Applications extended beyond the enterprise to customers and partners
  • Faster, cheaper


  • Lower total cost of


  • Remote access



Software as a Service (SaaS) Model

Traditional Software Model

Many Wolters Kluwer solutions exploit cloud computing by delivering “software as a service” (SaaS), giving our customers the functionality of installed software, but through a shared, hosted service over the Internet

Remote, shared services

Proprietary internal IT resources

SaaS Provider

Company A

Company B

Company C


Company A

Company B

Company C


appone a case study in software as a service

A large market…

AppOne – A Case Study in Software as a Service
  • … But a fragmented market
  • Independent used car dealers:


  • Used car sales per year: 40 million


  • Used vehicles sold by independent

dealers: 12.8 million units (32%)

  • 88% of independent dealers finance

20 or less units per month

  • More than 250 lenders split volume

from the largest 12% of independent



AppOne provides credit options to the U.S. used auto market

  • A platform that helps independent used auto dealerships obtain loans for their customers
  • Connects independent dealerships with lenders to provide finance and aftermarket products otherwise not readily available to them
  • Gives lenders ready access to a fragmented independent dealer market

Dealer needs…

Credit Application

AppOne enables used auto dealers to facilitate loans for consumers and for lenders to reliably access an under-served market
  • Lender needs...

Credit Decision

  • Quick loan approval for consumer
  • Complete loan process with

minimal labor

  • Profitable access to fragmented

market of dealers

  • Obtain complete, correct, and

compliant loan applications

  • Minimize loan loss risk



Credit Decision

Credit Application






appone is re shaping how lenders and used car dealers conduct business
AppOne is re-shaping how lenders and used car dealers conduct business
  • Burdens
  • Benefits
  • Find/establish/maintain individual

lender-dealer relationships

  • Different documentation and

compliance for each lender

  • Training by each lender required
  • Increased access among dealers

and lenders

  • Higher loan completion due to

application pre-screening

  • Improved, centralized compliance
  • Fewer errors


  • Before AppOne
  • With AppOne

National, broadened credit relationships

Local, limited credit relationships








Mortgage Document Prep – A Case Study in Software as a Service

  • Advantages To Lendersin Today’s Mortgage Environment
  • Outsourcing Can Boost The Bottom Line
    • Reduction in operational and compliance resource requirements
    • Accurate & compliant document packages reduces operational & post audit expenses
  • The Quick And The Correct Win
    • Lenders can serve their originators (Retail, Correspondent, Wholesale) faster
    • Lenders must rapidly deploy loan products and product changes to remain competitive
    • Compliance with complex and rapidly evolving regulatory framework (RESPA, Home Affordability Plan)
  • Warranted document packages
    • Meets standard conforming and investor specific package requirements
    • Capital Markets want standardized loan products; less risk
  • Cost Reduction
  • Speed to Market
  • Risk Reduction
leveraging technology to deliver mortgage compliance
Hosted Solution designed to serve lenders looking to outsource management of the document compliance

Automates auditing, selecting, assembling, packaging and delivery of mortgage document packages

Content driven to provide fast and consistent updates to Channels and Loan Programs.

Leveraging technology to deliver mortgage compliance




Thank You

Up and Running: Why the SaaS Model WorksHow Banks are Using Software as a Service for Competitive Advantage

Dain Ehring

Founder & CEODorado Corporation

dorado corporate snapshot
Dorado Corporate Snapshot
  • Founded in 1998 – HQ in CA with offices in FL and India
  • Top and mid-tier customers and leading partners
    • Four of top 20 U.S. originators, top three Canadian bank
    • First American, Wolters Kluwer
  • Recurring revenues and sustained growth
    • INC. Fastest Growing Companies (2006)
    • $82 million+ contracted revenue backlog (2008)
    • 40% revenue CAGR (growth rate)
    • International and product line expansion (2009)
  • SaaS solutions for end-to-end mortgage origination
  • Experienced in core system technology – SUN, Oracle, Unisys
who s using saas lending systems
Who’s Using SaaS Lending Systems?
  • Dorado’s 2008 client base includes top 25, mid-tier, and non-traditional lenders

*Based on Dorado-confidential customer data. Dorado is a private company.

why banks choose saas
Why Banks Choose SaaS
  • “Standard” SaaS benefits:
    • System is flexible, scalable, already built and ready-to-launch
    • No capital expenditures; interoperable with legacy systems
    • True digitization of data -- faster, more accurate tracking
    • Choice of modules or comprehensive [origination] system
  • Dorado’s SaaS solutions also uniquely provide:
    • Real-time, multi-party collaboration
      • Transaction transparency
      • Higher loan file accuracy
    • Highly usable and stable broker/POS interface using FLEX
    • Best practices methodology and proven software code
why lenders are using saas solutions
Why Lenders Are Using SaaS Solutions
  • Enhance performance by replacing portions of, or their entire aging origination systems
  • Centralize monitoring and control of lending activities
  • Strengthen broker (and customer) relations
  • Build compliance into the system
  • Maximize IT capacity/support downsized IT resources
  • Develop related services quickly (fraud detection, other)
  • Implement SOA as a business strategy creating a more agile, collaborative, and responsive organization for ongoing competitive advantage
conclusion the business case for saas
Conclusion: The Business Case for SaaS
  • SaaS has clear short and long-term business benefits:
    • Fast ROI: Increased efficiency without the capital spend
    • System that is constantly updated; remaining relevant “forever”
    • Transparency in lending activities – no hidden surprises
    • Built-in accuracy, efficiency and compliance
  • … And it’s gaining adoption in the US, Canada, and Europe:
    • SOA widely adopted by ING*, Credit Suisse*, Deutsche Bank*
    • SOA beginning adoption at Bank of America*, other lenders in the US and Canada
    • Mid tier players turning to SaaS in order to do more with less
    • New market entrants using SaaS to leap-frog the establishment

*not current Dorado customers

dorado contact information
Dorado Contact Information

Product Team:

LinkedIn: Dain Ehring

Senior members of product management, engineering and finance team onsite

Thank you