For years, customized integrations have been the sign of a healthy tech stack, seamlessly connecting the various technologies used by a particular title agency (mortgage lender, broker or appraisal management company, for that matter) to deliver optimal performance. After all, one of the challenges remaining to our industry – even after a wave of digitalization – takes place where two systems don’t connect perfectly, creating chokepoints where humans must move the transaction along manually. Any improved connection at any point in the mortgage process is a cause for celebration.
In fact, tailored integrations have long been the norm in this regard. They’ve been a point of differentiation and, at times, a competitive advantage for technology providers, and for their clients who recognize their need. However, customized integrations typically come at a significant cost. Once implemented, they’re also difficult to update again in an ever-changing market. And that’s not to mention the potential disruption to operational workflow while the integration is being put in place.
It’s against that background that a promising beacon of hope is emerging. We are on the verge of an impending era of technology that won’t necessitate cumbersome integrations. It will begin with the increasing use of Open APIs, and evolve into numerous platforms and apps using innovative new architectures that inherently empower users to seamlessly customize their technology without taking on additional time or expenses. Naturally, as is the case with nearly any form of change, this will impact both the mortgage and the settlement services industries. Here’s how.
The dawn of the open API
Traditional methods of integrating various systems have inevitably come with complexity and cost. Mortgage lenders and title agencies alike have historically grappled with the arduous task of synchronizing disparate systems, often requiring extensive customizations and time-consuming third-party interventions. Such integrations don’t just bring with them time and cost. They also tend to impose limitations on scalability and adaptability, especially at a time in the mortgage industry where agility is an unquestioned requirement for success, the constraints imposed by traditional integrations can even impede innovation and responsiveness to evolving demands.
Enter the Open Application Programming Interface (API), on which the next generation of FinTech will, at least initially, be built.
Open APIs represent a dramatic advance in software development, even at a time when the introduction of new ideas and concepts is only accelerating. An Open API, while built on a standardized interface, enables smooth interoperability between otherwise disparate systems (and users).
Unlike conventional integrations, Open APIs empower users to connect and configure diverse applications, eliminating the need for specialized or intricate customization and improving the integration process. By embracing Open APIs, businesses of any type create, essentially, a platform that fosters more agile and adaptive business processes.
Open APIs are already emerging throughout the real estate industry, a few of them with some of the most established and well-known tech developers. The appeal lies in their simplicity and versatility. At a time when the role and expectations of lenders and service providers are changing, Open API technologies can enable users to integrate emerging technologies and third-party services almost on the fly, without the time drag and expense of custom development.
Imagine being able to alter an origination or closing process in tune with a mini refinance boom lasting three or four months, then being able to quickly pivot to accommodate more default or HELOC business. Most indicators suggest that the coming few years could play out with just that kind of volatility in the market cycles. Unfortunately, many legacy systems in place now that don’t make use of Open API (or have other anticipatory flexibilities built in) will likely struggle during these quick market transitions, straining throughput and, eventually, even existing or new business.
A wealth of possibilities
Whether it’s incorporating advanced analytics tools, emerging and evolving technologies to provide enhanced cybersecurity, or AI-driven solutions for process automation, Open APIs offer mortgage and title businesses a wealth of possibilities. By harnessing the power of Open APIs, lenders and agents alike will be able to future-proof their operations, quickly pivoting to address emerging industry trends and client needs.
A new generation of technology
As is the case with any new technology, these solutions are only the beginning, rather than the apex. Open APIs can also encourage a culture of collaboration and innovation within the industry. Any platform or centralized source allowing for, essentially, unencumbered contribution and collaboration, is ripe for exciting new concepts and innovations. In an industry where the various segments (e.g. origination, title services, appraisal, realty) suffer from a lack of efficient interoperability, the opportunities abound for real estate businesses of any kind to finally find common ground on certain collaborative functions, rather than continuing the fruitless battle for app or portal supremacy.
As was the case with the first wave of mortgage and title automation, such a transformation will come with substantial challenges, starting with adoption (as always). Too many businesses in our industry are likely to rest on their recent tech investments as sufficient. From there, lenders and service providers, as they do with any other technology, will have to consider data security, privacy, and compliance at a time when cyberthreats are increasing as well as evolving, and new waves of federal and state requirements are appearing.
The benefit of using Open APIs or similar solutions may also be its weakness. For example, the seamless exchange of information facilitated by Open APIs will also demand robust security measures to safeguard sensitive information and ensure compliance with stringent regulatory requirements.
The days of proudly announcing a new integration are coming to a close. As the mortgage and title industry moves into a future where one can at least realistically envision a time to close much shorter than 50 days, the era of Open APIs and new, easily interconnected solutions will be the backdrop. By bringing once disparate platforms, apps and even users the chance to interact and collaborate with far fewer obstacles, the next generation of technology could pave the way for a more agile, adaptive, and interconnected real estate universe.
