What’s the real cost of building your own CRE tech?
In this video, Kent Waltman, Chief Administrative Officer at Rockport, outlines the long-term risks that come with internal systems - from hidden costs and limited perspective to outdated functionality and security concerns.
Kent shares why even well-intentioned internal builds can create “tech silos” that slow innovation and pull teams away from what matters most: lending, risk management, and business growth.
Learn why leading institutions are shifting away from DIY systems and partnering with providers who specialize in scalable, secure, and constantly evolving CRE solutions.
If institutions aren't careful, they can create an internal monopoly. When evaluating build versus buy, you must realize that if you build it internally, you don't enjoy the perspective that we have of getting feedback across the market from multiple stakeholders. Demands and competitive forces that require us to continue to innovate, refresh the functionality, to meet the needs of the marketplace. An internal system, you can almost create an internal monopoly where you don't have those market forces. You build a system and maintain it for one group or several groups internally, but it can become very siloed and stale.
Honestly, the other ignored reality is there are hidden costs to that. And I would encourage customers to really evaluate; do I want to be in the technology business? Or would I rather outsource that to others who are already in that business who have a track record of success in that business and who have demonstrated that they will in fact continue to innovate and deliver at a high level. Things that aren't accounted for are licensure of required technology and that can get underestimated on the front end.
And beyond the build cost, there's a cost of maintenance over time. That often is unseen or unaccounted for, especially as technology ages, there may be increased cost of maintenance that doesn't get accounted for when you're evaluating that. And when you compare those costs to an off-the-shelf product that you're able to purchase in the marketplace, it makes no sense to buy something when there's a commercial option out there that is more economical, will be more innovative over time meets all your needs and comes from a trusted provider like Rockport.
The real question is an Excel file, an Excel template. Is that your system that you're using for your lending operations, whether that's origination or whether that's asset management servicing? In my opinion, the lack of consistency, the lack of control in an age where data privacy and security are critical, those risks mean that leveraging a core system, you're going to be a more effective enterprise as opposed to having disparate Excel workbooks. Sitting across your footprint that you're not even aware of at times or have no control over the consistency of those outputs.
Really what you ought to be valuing is innovation and it frees your team up to focus on their day jobs. They're not focused on maintaining software. We'll do that for you, and we'll do it in a very, very highly competent fashion. You can focus on your day job of making decisions about lending, risk management and profitability as opposed to maintaining the tools that you use in order to achieve those outcomes.