Panel: Embrace Innovation.(need for innovation by financial services)

Orlando, FL -- As the industry goes through this downturn, panelists at the 11th Annual SourceMedia Mortgage Technology Conference here stressed that this is not the time for the industry to shy away from technology innovation. In fact, all agreed that now is the time to re-evaluate processes and adopt a smart technology strategy to increase both efficiency and market share.

"There's an increased sense of urgency now," said Flagstar Bank's first vice president of lending support, Brian Boike. "People always ask when is the right time to innovate. I liken this to the question: When is the right time to eat well and exercise? The answer is all the time."

But Mr. Boike stressed that technology decisions shouldn't be made on a whim. "You have to use existing technology to measure overall performance. As a lender you have to know your pain points and go after that first."

Nonetheless IT budgets will surely be small this year as compared to years past. "IT spending equals somewhere between 8% and 10% of total volume," noted Jordan Brown, CEO of investment banking and consulting firm MarketWise Advisors LLC. "So, as we see the volume shrink and more consolidation, technology budgets will follow. I see this as an opportunity for lenders to spend in the right areas. Lenders have to be tactical vs. being strategic and look at technology spend as both a short-term and long-term investment to increase overall efficiency."

Despite the fact that IT budgets overall will be down in 2008, Flagstar will be bucking that trend, taking Mr. Brown's advice and will continue to heavily invest in technology this year. "If we see an opportunity we will go after it. Right now we're doing e-mortgages in Michigan and will expand to other states this year. We're also looking to pass our technology onto our partners to make them more efficient as well," he said. But what is the right technology investment to make in a down market? "When the return on investment is there it's the right time to ...