A ‘Build the Plane While You Fly It’ Approach to Loan Modernization

By Kim Lindros

Many agencies are struggling to modernize their IT infrastructures and systems that have aged well beyond their expected lifespans. But take heart: There is a way out, as proven by the success of others.

Consider the example of a large federal agency that provides over $1.3 trillion in mortgage insurance for homes and other properties. Before modernizing, the agency used several mainframe systems, which created a complicated information architecture with niche integrations and siloed data repositories.

The insurance processes relied heavily on time-intensive and costly paper files and older batch electronic data interfaces. Delays could affect mutual customers – the homebuyers and homeowners.

The agency tried to modernize, but the big-bang approach was overwhelming. The slow-and-steady plan sounded good, but was going to take way too long due to increasing volumes in their insurance services.

The agency found the right solution to give it the flexibility to address urgent priorities and provide the foundation for sequential modernization: a cloud-based platform built on AWS with modules that corresponded to steps in the insuring process. Those steps include initial validation, insurance endorsement, account servicing, and insurance claim management. Each module has the capabilities and functionality of the legacy system it replaced, while including enhancements in the industry and ideas from stakeholders.

Designed for easy upgrades in the future, the platform handles increasing volumes while being available around the clock with real-time processing. Each new module augments the other modules by leveraging the common data architecture and internal microservices.

Customers can adopt each module quickly. Access permissions for new functionality are simply extended to their existing accounts, based on role and job functions. Additionally, they can easily update their system-to-system integration as new capabilities are added, via the single customer-facing application programming interface (or API).

This is a relevant approach to lots of modernization projects – sort of a “build the plane while you fly it” endeavor. At the heart of the cloud-based platform is a collection of ready-made services (or tools) that you can quickly leverage. These ready-made services become the basic ingredients for custom code. They also significantly decrease time to delivery and make the whole project quickly scalable.

Migrations can be tough on everyone, but small initial successes reduce skepticism and gain user buy-in. After a module goes live, users can view all current and historical data online instead of having to manually retrieve the information across multiple systems. This energizes them to look forward to the release of more modules, while coming up with additional enhancement ideas.

When done right, it’s a perpetuating cycle.

Having an adaptive and hands-on industry partner can help you deliver success, giving you the tools and techniques to equip your modernization efforts for fast adoption. Pyramid, partnering with AWS, is helping walk the large federal agency previously mentioned through modernization and the results of having accelerated processes for the transaction lifecycle. It’s getting the job done with the foundation of secure, scalable and reliable infrastructure.

Here are some best practices you can follow to replicate that success:

• To modernize quickly, avoid a custom build. Adopt a broad toolbox of ready-to-use services like those offered by AWS GovCloud to reduce up-front investment and risk.
• To prepare for the unexpected, build elasticity and resiliency into any modernization design. Allow for business rules to change, too.
• Remember that your customers, suppliers and stakeholders may have to make investments. Emphasize and demonstrate the potential value of the new system to keep them engaged.
•     (And) work with a solutions provider that is highly experienced in the technologies and processes to be implemented.

Don’t keep delaying your modernization journey. Instead, use a modular, cloud-based approach to keep your new and legacy systems working together.

This article is an excerpt from GovLoop Academy’s course, “A ‘How to Build the Plane While You Fly It’ Approach to Loan Modernization,” created in partnership with Pyramid and AWS. Access the full course here.