In a world of shiny objects, it’s tough to make a sensible choice. In the Fintech industry, this is especially true. There are countless companies out there promising to easily integrate into your tech stack and solve some niche problem that no one has ever thought to solve.
While the intent might be noble, the enterprise that adopts the product might find that it quickly becomes entangled in a tangled web of interdependent applications. Quickly, business leaders become disenfranchised with Fintechs altogether because of the costs they rack up and the operational stress they induce.
With so many Fintechs in the market today, regulators also feel anxious about their reach into all financial services sectors. In an article by National Mortgage News, Deputy Director of the Division of Conservatorship Oversight and Readiness at the Federal Housing Finance Agency, Jason Cave, warns how the mortgage industry should be cautious around so much Fintech innovation. The FHFA has even created an entire office (Office of Financial Technology) dedicated to “advance effective risk management as FHFA evaluates applications of Fintech in housing finance, as well as in compliance, and regulatory activities.”
The overall “tech stacking” model doesn’t align with mortgage servicing. That’s because the tech that the entire industry rests upon was not initially built for connectivity, let alone emerging Fintech tools.
Think of it as purchasing a historic home built in 1915. While the beauty of the original craftsmanship and design makes it appealing, the internal “bones” of the house (electrical, plumbing, etc.) are likely dangerously out of date. A new homeowner cannot simply transfer the appliances and amenities of a modern lifestyle into a historic home. Doing so could cause household fires and floods that could destroy everything.
The homeowner is left with two choices. They can make expensive structural updates to the home, ensuring everything is safe and secure. Or, they can forgo a modern lifestyle and work with what the house has to offer. While some enjoy the nostalgia the latter option provides, it’s not practical for the majority of people.
The hard-to-swallow pill for the mortgage servicing sector is that for it to be compatible with modern-day tech, it needs the same structural remodeling as a historic home does. An industry valued over $12 trillion cannot continue to Frankenstein together systems with limited functionality and have difficulty integrating with the quick-fix Fintech applications mentioned above.
The complex regulatory environment of mortgage servicing is a big reason for the lack of foundational progress in its core technology. This is why many Servicers have adapted to an “it is what it is” mentality.
However, when consumers are involved, “it is what it is” doesn’t withstand consumer demand. When consumers become educated, complacency isn’t an excuse for a poor experience. That’s why the CFPB has already fielded over 3 million complaints this year (2022).
To be fair, mortgage servicers are well aware of the shortcomings within the industry, and they’re working hard to resolve these issues. But, looking at it from their perspective, you can understand that finding solutions to decade-long problems (while remaining compliant) could seem daunting. However, unlike a historic home renovation, implementing a secure and stable digital mortgage servicing infrastructure can be faster and more affordable than you might think.
When conceptualizing the need for building Brace, we saw that mortgage servicers needed help and were committed to solving the problem. After years of research, planning, and securing investment, Brace started on its journey to create not just a connected digital infrastructure but the core architecture that would empower Servicers (and consumers) and break down legacy barriers.
To remain 100% scalable and secure, we maintain what we call the “vanilla rule.” Brace sticks to using default configurations as much as possible to avoid customization, reduce complexity, isolate change, and leave the bulk of the stack as vanilla as possible.
It’s common for most developers that use cloud computing services to repeatedly release updates to ephemeral virtual machines (like your desktop computer, but they can be created and destroyed remotely or on demand). Today, cloud computing is the standard but its best practices may be unintuitive for developers who have experience deploying services the old way. Their intuitions may run counter to how Amazon or Google want you to deploy your applications. When issues arise during deployment, developers must make complex hacks or pay for third-party services to do very little and take up more time than they save–because developers have to manage the service and the third-party relationships.
Building against this methodology, our Enterprise Architecture team started with AWS and Terraform. Taking the time to understand the process, technology and culture before hunting out cutting-edge open source and publicly available tools to create an automated solution.
Having a foundation of secure and stable tools, we can stand up and support a new single-tenant enterprise client environment in a day or two—instead of the typical months, which most vendors quote and then take even longer to deliver.
Our unique tech stack empowers software engineers to write and directly push their code live. Our system enables everyone involved to instantly see if there are any potential issues and how they should be resolved before we hit any downstream problems.
If we cannot resolve them quickly, we can instantly roll them back with no impact while being provided with a complete audit log of changes.
We are enabling our DevOps team to take the role of an observer rather than needing to schedule time to deploy and personally monitor; removing DevOps as a blocker allows us to scale our infrastructure securely.
To prove that they are in compliance, servicers must be able to report on every action accurately. Lack of trackability and transparency in this arena had been a primary challenge for years, as their systems simply were not built with that in mind. With Brace, every action performed within the system (whether it be Servicers, homeowners, or developers) is logged. This data is compiled into reports that can be pulled at any time.
Brace’s platform is designed to be a consumer-led solution. However, being consumer-led means your processes depend on the data and documents provided by external sources. Every developer knows that uploading external docs opens you up to introducing vulnerabilities through the data process layer.
We’ve created the ability to spin up flexible portals where homeowners and servicers can upload required documents securely. Everything that enters or leaves the platform is scanned for viruses or any other threats.
We understand that a secure mortgage servicing infrastructure isn’t the sexiest topic. You can’t pay for something with your face or invest in commercial real estate. What it can do is take some pressure off of homeowners and provide faster relief to homeowners. Brace’s vanilla yet stable infrastructure ensures that our proprietary Rules Engine can instantly make the most compliant loss mitigation workouts possible.
Check out our product feature in American Banker’s Advances in Tech webinar to see the Brace Platform in action. Also, please reach out to our sales team if you’re interested in scheduling a live demo.