From the Editor:

The headlines keep coming: “U.S. Home Sales Plummet in September,” “Existing Home Sales Clogged by Mortgage Morass.” But vendors of mortgage technology have found a silver lining in this cloud, even while acknowledging that the market’s current conditions are unlike anything they’ve seen in decades of working in the industry.

For one, a mortgage market like this certainly demands automation. With lending terms and conditions changing this dynamically, no one wants the task of distributing new rate information to brokers via the fax.

Then there’s the argument that one tool to combat the subprime default crisis is data. Various segments of the fi nancial services industry have long hungered for data – to gain an edge in trading, to target the right customers, to cross-sell. Now it’s time for the mortgage industry to ensure that they are on top of the data game as well – not only in terms of identifying the right potential borrowers in loan origination, but also in terms of spotting stumbles that might be plaguing borrowers that already have loans. By carefully tracking warning signs, lenders can spot problems early, and begin to become more proactive about keeping borrowers on track before they become derailed.

There is also the suggestion that this market off ers opportunity for the trusted regulated fi nancial institutions, like smaller regional and community banks. By improving their technology might they not position themselves to be able to step up and take a larger piece of the mortgage pie from some of the mortgage lenders that have faltered and in some cases shut down?

Finally, lenders that were once too busy churning out mortgages to focus on technology no longer have that excuse. Th ey now have the time, and if what goes down must come up again eventually, this period might be one that it would be best not to waste.

Meanwhile, in other facets of the fi nancial industry, the world keeps turning. Parlano’s MindAlign, Microsoft’s newly acquired persistent group chat technology, is looking forward to growing into more of an enterprise tool under the Microsoft banner.  As large financial institutions increasingly seek to ensure that their diff erent parts act more like a single fi rm, internal communication between areas like capital markets and wealth management must be strengthened.

In insurance, where contracts can be complex relationships over time, some firms are looking to improve the database management of temporal issues, for increased efficiency.

In capital markets, hedge funds are taking advantage of the decoupling between business functionality and user interface in Windows Presentation Foundation to allow them to shift and modify data views more quickly.

Elsewhere in retail banking, Windows-based disk partitioning software has proved to be an eff ective and economical way to address storage capacity issues.

With an eye to these developments among others, we are turning the page on 2007 and looking forward to what 2008 may bring.

 

- Renee Wijnen Caruthers