In the digital age, every sort of business should offer its clients a digital experience, and lenders are absolutely no exception. Clients, including borrowers, expect to be able to interface with their lender online and at their convenience, and the elegance and ease-of-use of a digital lending experience may be what decides a borrower on where to take their business. With the market as competitive as it is, lenders must decide whether to work with a partner and buy a digital lending solution or to build one on their own.
At first blush, building one’s own solution can sound like the smarter call. After all, you can build exactly what you want, right? The reality is not that simple.
In fact, “Build vs. Buy” isn’t really even an accurate way to describe your options – it’s really Build vs. Partner. Adopting a digital lending solution isn’t like buying a widget, where you transact for a static commodity product and then you’re done. You’re paying your solution provider not just for their product, but for their expertise, support, advice, and singular focus.
Your digital lending solution provider isn’t just a vendor – it should be a true partner dedicated to helping you succeed in your business objectives. And there are a number of ways that a partner is uniquely able to accomplish that.
THE VOICE OF THE CUSTOMER
When people talk about the drawbacks of developing solutions internally, they usually bring up things like development costs and ongoing maintenance and areas of expertise. But there’s another disadvantage as well, one that every organization suffers from: the echo chamber.
Even with the best of intentions, it’s incredibly difficult to overcome internal idiosyncrasies when building internal solutions. By nature, everyone involved in development shares the perspective of the lender. A partner provides an external voice, and can represent the perspective of the end user, who might otherwise get unintentionally overlooked or underserved. The best partners are willing to challenge your internal status quo to provide a better experience for your customers – which ends up also benefitting you, in the form of stickier relationships and happier customers.
CONTINUOUS INNOVATION: FOCUS ON TIME TO MARKET NEVER ENDS
The market doesn’t stand still, and yesterday’s cutting edge is today’s table stakes. Without constant innovation and development, a digital experience quickly grows dated – which means that a successful experience is never really finished.
In practice, this means that lenders that build internally need to run a perpetual software shop to keep their solution current. Even if a lender is large enough that this is financially viable, it still represents a significant distraction from their core competency and purpose. For technology providers, on the other hand, it’s their raison d’etre.
Using a partner means that the lender benefits from a singular focus on product, innovation and iteration. Without the distraction of an entirely separate business to manage, the tech partner can be relentless in pursuit of innovation and bring that innovation to market far faster than the lender could. A tech partner also has the advantage of multiple perspectives from multiple clients, which translates into a shared experience benefit for all their clients. Want to try deploying a new workflow? If your partner has already done a similar deployment with another client, you’ll benefit from their experience by getting up and running that much smoother.
That’s not even counting the other benefits of partnering with a tech provider leveraging the public cloud – like fast deployment, easy scaling, and disaster recovery the lender doesn’t need to worry about.
BEHOLD THE NETWORK EFFECTS
The lender doesn’t just benefit from their partner’s architecture and development resources. They benefit from their partner’s biz dev as well. The solution provider has partners of their own, and brings in other players and services that benefit the lender – from CRM and LOS providers to services like appraisal and insurance.
This enables the lender to further innovate ways to connect with their customers, and further increase their own workflow efficiency, without having to invest the time and expense of individually researching, pursuing and implementing partnerships with each potential provider. Their digital lending solution provider does the hard work, and the lender is able to reap the benefits of the richer solution.
The network effect goes beyond the service provider landscape. Just like social networks, the more people are using a solution, the more it becomes the preferred platform for everyone else. Real estate agents, for example, play a vital role in the home-lending ecosystem, often pointing their clients toward preferred lenders when it comes time for a mortgage. As we have seen on our own platform, when a real estate agent gets used to working with lenders on a particular platform, they want their other lender partners to use it as well. When a lender adopts a solution that already has a user network, they also inherit that network.
Building a digital lending solution in-house may sound like a recipe for exactly what you want. But working with a partner confers significant advantages beyond the oft-cited costs and maintenance. With the right partner, you benefit from perspective, experience, and even their business relationships. Offering a digital experience is now a requirement for successful lenders – and a good partnership is the fastest, most sustainable way to get there.
