What Microsoft’s new cloud platform means for mortgage

The industry-focused cloud seeks to tap a growing industry demand for digital and automation services and products

Bill Borden, corporate vice president of worldwide financial services at Microsoft

Tech giant Microsoft plans to launch a new cloud-computing offering targeting the financial-services market on Nov. 1 as part of an effort to further bolster its fast-expanding cloud business. The secondary market may want to take note.

The Microsoft Cloud for Financial Services has been operating in a preview mode since March, with lenders like Navy Federal Credit Union and Virgin Money UK among the first financial institutions to take it for a test drive, according to a company blog. But Microsoft already has an impressive array of financial services companies as clients in the cloud-computing space, including Morgan Stanley, Standard Chartered Bank, BNY Mellon, Franklin Templeton and Fannie Mae.

“Microsoft’s Azure [cloud-computing product] has been steadily gaining market traction for quite some time now, but Amazon’s cloud computing arm, Amazon Web Services, leads the cloud-computing space, which is a major headwind,” states a recent research report by Zacks Investment Research. “… [Microsoft’s] Intelligent Cloud segment, which includes server, and enterprise products and services, contributed 37.6% to total revenues. The segment reported revenues of $17.375 billion, up 30% year over year [for the company’s fourth quarter ended June 30].”

Amazon, too, has a cloud segment dedicated to the financial services industry. Still, Microsoft’s pending entry into that market with industry-dedicated cloud offerings promises to ratchet up the competition for clients who are seeking out digital and automation services in a fast-evolving market. 

Microsoft also has lined up a host of partners that will be offering services and products through the financial-services cloud platform. Among them are accounting and consulting giants KPMG, EY and PwC as well as a host of independent software service and product providers — such as digital-lending platform Mortgage365, financial-software solutions platform Finastra and the financial-data solutions fintech BaseCap Analystics.

“BaseCap’s Mortgage Quality Control solution enables mortgage businesses to originate, service and invest loans quicker for significantly less cost,” said Steve Smith, CEO and co-founder of BaseCap. “In addition to dramatically reducing defects, our approach is transforming the industry by accelerating lending while reducing risk. By using Microsoft Cloud for Financial Services, BaseCap’s integration deploys immediately, delivering a complete, collaborative and secure solution with the click of a button.”

Given the increasingly competitive market for technologies that speed automation and digitization in the mortgage industry, HousingWire decided to interview — via email, appropriately — the executive spearheading Microsoft’s cloud-based specialization in the financial-services space.

Bill Borden, corporate vice president of worldwide financial services at Microsoft, previously worked in the banking industry for some two decades, holding senior leadership positions at Bank of America and Citigroup. Check out the interview, which has been lightly edited for length and clarity.

HousingWire: What is an industry cloud?

Bill Borden: Microsoft industry clouds are new extensions of existing Microsoft cloud services. Each of these offerings are designed to work as one, bringing together the breadth of our solutions along with new capabilities, customizations, and standards tailored specifically for each industry. Customers do not need to migrate any existing deployments to take advantage of these capabilities as these industry clouds do not have dedicated data centers. 

… The industry-specific cloud solutions include released and new industry capabilities that unlock the power of Microsoft 365, Azure, Dynamics 365, and Microsoft Power Platform. They make it easier to provide more efficient outcomes faster and help customers support their security, compliance, and interoperability of data. A robust partner ecosystem extends the value of the platform with additional solutions to address the most urgent challenges industries face today. 

HW: What is the focus of the company’s financial-services cloud?

BB: It is designed for the entire industry. We offer the cloud for enterprise businesses globally and support partner solutions for the financial-services market. … We see room for business growth in all sectors of the financial-services industry. Looking ahead, we expect to see banks, capital market firms, and insurance organizations continue to support a remote workforce, invest in customer experience, and add products and services to better service customers throughout the pandemic recovery period and into what becomes the next phases of the new normal. 

Microsoft Cloud for Financial services unlocks the power and value of the Microsoft cloud to help financial-service organizations innovate for responsible and sustainable growth. Our industry cloud has a foundation of privacy, security and regulatory compliance across Microsoft and our partner ecosystem, and it is built on an industry data model that enables interoperability and innovation 

HW: How will the financial-services cloud serve the secondary market?

BB: It supports capital markets, including secondary-market trading. Capital markets customers can use the Microsoft Cloud for Financial Services and leverage the compliance program and platform security that complies with industry regulations as well as the integration with the robust partner-solution ecosystem that supports capital markets. 

HW: What about its support for the agency and nonagency markets for residential mortgage-backed securities?

BB: We partner with established banking technology vendors for core banking, loan-origination, loan-processing/fulfillment and other core system areas. Our focus is on complementing those core systems by building a robust platform and complementary capabilities that help streamline key processes. 

In terms of first-party capabilities, as part of Microsoft Cloud for Financial Services, we have developed a new solution called Collaboration Manager that helps streamline key loan-related processes, reduces manual tasks and improves cross-group collaboration. Additionally, we offer a broad range of customer-experience management capabilities, including a unified customer view, onboarding capabilities and other customer-engagement features. We also offer a strong set of advanced analytics and machine-learning models that banks [and other lenders] can use to drive intelligence and insight across the organization, including areas specific to lending such as credit-risk and credit-scoring functions.

HW: What does the future hold?

BB: We will continue to enrich the Microsoft Cloud for Financial Services with new capabilities for each sector, including capital markets. Our partners will integrate to provide solutions for various parts of the business.

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