In business, we mitigate risk by doing due diligence, getting financials, assurances, service contract, etc. But as we reflect this week on the tragedy of 9/11 we deal with the sobering fact that true tragedy can happen despite when fail safes are put into place. And it happens in various degrees. It’s not something we like to deal with until it we’re forced to but then recovery can be slowed or even lost.
What happens if tragedy struck your business like a fire or flood? Or you’re sold, or go out of business? I know. Pretty harsh. Not very likely but it can and has happened. Insurance will cover damages but what about irrecoverables — like customer files. There’s a lot you need to consider, but your loan origination system should not be one of them.
When you use a web-based loan origination system, your critical data is infinitely more secure then on your premises. Think of it this way: a priceless pocket watch is safer in a bank vault than a sock drawer and priceless data is more secure on servers in a data center than on your servers.
Natural disasters do happen, but what’s more likely are other changes your mortgage software company will make that won’t violate the contract but may cause great amounts of trouble. For instance, companies discontinue products or entire business lines. The women in my life tell me how their favorite shade of blush, or lipstick that they have used for years is just suddenly discontinued. Imagine if that was your mortgage banking software? Not pretty, so to speak.
Mergers usually mean product discontinuations. So ask those loan software companies what other businesses they are involved in. What’s their interest in other industries? Are they putting all their resources into their mortgage lending solutions or elsewhere? Where do they want to be five years from now?