For any Non-banking financial services institution, just as with any other long-term investment, they want to establish a relationship with a vendor who truly understands all the nuances of the lending cycle. One whose employees apply their experience in creating the loan origination system. A modern system should provide all the necessary functionality your organization needs and let you easily configure the system. Of course, they will be looking at the features and functions of the vendor’s loan origination system, but those are based on their industry understanding, technical proficiency, and corporate culture.
While many organizations understand which functionality would address their loan origination requirements, they are often less certain about which deployment model would best meet their needs.
They struggle to choose between the three primary options – public cloud, private cloud, or a hybrid deployment with multiple cloud and/or on-premise components. Private cloud deployment uses proprietary architecture dedicated to a single organization, which retains a level of control over both hardware and software. Public cloud deployment uses proprietary architecture to support multiple organizations and the hardware topography is managed by the cloud provider of choice, for example Azure, Amazon Web Services, Google Compute Engine.Some countries have regulatory requirements that make public cloud deployment challenging, because they prohibit storage of data outside of specific geographies or in multi-tenant scenarios where more than one organization is using the same application.Offerings in the public cloud therefore require stronger due diligence for data security and regulatory compliance.
A hybrid deployment distributes components of a single application across both public cloud and private cloud. For instance, a bank that deploys its loan origination application on public cloud could have instances of integrations with its legacy applications running on a private cloud. In this way, any country-specific regulatory concerns could be addressed by retaining sensitive data in the private cloud.
The vended product’s architectural support for data residency becomes critical in such situations. When the same data needs to be consumed by users in other geographies as well, the architecture needs to ensure appropriate data access and performance for those users.
Multi-cloud strategy is another option whereby vendors deploy their software to multiple public clouds to have a back-up and sufficient fail-safe capacity to keep services running reliably. Multi-cloud deployments are typically used to reduce downtime and satisfy client needs in multiple time zones.
Deployment selections need to take into consideration not just the initial application, but also any additional modules that will be subsequently added to the application. Before settling on a particular deployment option, lenders should ask how quickly and seamlessly new modules can be deployed if they are added after the initial application.
In a well-architected SaaS solution, this deployment occurs without disruption to either users or user-configurations. Lastly, on-premise deployments require IT staff to install, test and maintain the software, as well as implementing any additional modules that may be acquired after the initial application. For most lenders, on-premise deployments provide a high level of control,
but also incur the highest total cost of ownership. As a result, the industry is largely moving toward cloud deployments. Custom Build Cloud native Loan origination system is the way forward.