Executive Conversations is a HousingWire web series that profiles powerful people in the financial industry, highlighting the operations and the people that make this sector tick. In the latest installment, we sit down with Alok Bansal, managing director of Visionet Systems, to discuss zero-cost technology — an alternative to the buy vs. build conundrum lenders often face.

Q. What are some of the challenges for lenders as they consider whether to buy or develop new technology solutions?

Alok BansalA. Lenders today are battling with high-interest rates, declining loan applications, and higher cost of compliance. All of this is leading to an increase in the cost of producing a loan. In fact, many originators are reporting a net loss on each loan that they originate. 

Technology seems to be the savior, as it can help streamline and automate operations while reducing costs. But going about selecting the right technology to buy or develop can be a challenge in itself. If you buy, you have significant upfront costs and there will be a significant time gap until you start reaping the ROI.

Moreover, there is an inherent risk in any new technology solution you buy in terms of the return on the technology investment.

If you decide to develop, there is a good chance that the technology won’t be ready for use for quite some time. Many smaller-size lenders may not have the internal IT resources or budgets. Besides, in a changing environment where new technologies evolve continuously, you need to make large investments continuously to ensure that you are getting the best of the latest innovations in the technology.

Q. What is missing when lenders only consider these two options?

A. Whether you purchase technology or build, you need to think about how the technology fits into your enterprise solution. Creating seamless integration with your new technology purchase can also be very expensive and take many months to deploy especially if you are developing it yourself. You also need strong business and technology leadership to ensure the expected return from the technology investment. 

With either of these options, you end up losing time over the decisions you need to make and there is no guarantee that you will be able to recognize your projected ROI. Besides, you will need to continue paying for the maintenance contracts, upgrades for the technology, etc.

Q. How is Visionet Systems changing this paradigm?

A. After working in the industry for 20 years, Visionet understands the challenges of the SME and have introduced a ‘pay per use’ or ‘zero upfront cost’ technology model. It means that the companies are able to use the latest digital technologies without having to incur any initial or recurring costs.

We are also a domain expert, which means that mortgage companies can rely on Visionet’s digital workflow platform to squeeze greater productivity from operations with high accuracy.

The advantages of partnering with Visionet are obvious:

  • There are no upfront costs, so your investments are not stuck.
  • No time is spent evaluating solutions, you are up and running from day one.
  • You see ROI from day one – you can start leveraging the technology from day one, so your business can benefit.
  • You take no risk on what technology can yield for you – we take care of end-to-end delivery which includes technology and the service, so that you can focus on growing your business.

Q. What is zero upfront cost technology?

A. Visionet is the first company offering “zero upfront cost technology” as part of its solutions across multiple domains, including title and settlement, underwriting, Appraisal Management Companies, and lenders. Your business benefits from day one, there are no upfront costs and there are no minimum volume commitments. Regardless of daily market fluctuations, your operating costs are predictable with “Pay as you Go.” We offer this option to the clients who are with us for some of our leading mortgage back office services.

Q. Why is it so important to look beyond just the technology piece?

A. Reducing cost per loan is every lender’s priority and there are certainly more paths to that outcome than just pure technology. We recently published a white paper, Six Ways to Reduce Cost of Loan Production by 50%, which can be downloaded here. Speeding up loan processing without sacrificing quality and accuracy and managing all the back-office volumes with a variable priced team can help you significantly in driving better margins for your business. More than 50 of the top 200 mortgage companies have already chosen Visionet as a trusted partner to combat increasing operating costs.