Product and pricing, Capital markets

Cloud-enabled, -based and -native: why it’s important to know the difference

Cloud-enabled, -based and -native: why it’s important to know the difference

As technology becomes increasingly relied upon for lenders that seek to modernize and streamline internal operations, the term “cloud” is somewhat ubiquitous and can certainly be misleading. We are sure you have heard it, tossed around here and there. But simply operating in the cloud is not enough; it is important to recognize that there are clear distinctions between cloud-enabled, cloud-based, and cloud-native solutions. When it comes to the mortgage tech stack, the wrong choice could potentially hinder lenders’ ability to achieve operational goals and maximize profitability.

With our team of seasoned industry experts having been personally ingrained in the mortgage space for decades, we have experienced firsthand the challenges that exist in legacy solutions. And, we know that the decision to make the switch to a new PPE can oftentimes be the most difficult part. Change is sometimes perceived to come with many challenges, that's understandable. Historically, tech adoption has been complicated and cumbersome and it’s often rife with unanticipated workflow requirements and expenses. This is at no fault of the lender. Unfortunately, this scenario is what many have been forced to accept over time because there was not another choice in lieu of the legacy software tools available within the industry. At Polly, we believe this is a fundamental flaw in the way things have been done.

Selecting the right cloud technology can alleviate this painful transition. And selecting the right technology vendor… well, that can make all the difference.

Let’s look at the different cloud service labels and what they mean to an organization’s current and future lending strategies. We will not get into technical detail for the purpose of this article, but the implication of their importance should be clear even at the basic level.

'Cloud-what’ does it mean?

Cloud-enabled: Cloud-enabled services or applications are built by traditional means and then migrated onto the cloud. The infrastructure is typically dependent on hardware that sits in a physical location and carries with it a monolithic design. This arrangement still requires localized resources and has simply been refactored for a virtual environment, but the underlying architecture remains intact – restricting the ability to deliver the scale and resiliency lenders require. This approach is often the path taken by legacy applications to compete with modern, cloud-native solution providers.  

Cloud-based: Cloud-based solutions fall in between cloud-enabled and cloud-native. These are services that take advantage of some cloud capabilities, without overhauling an entire application in order to use them. Moving off a physical infrastructure and over to a larger, off-site cloud service provider, such as AWS, offloads the maintenance and back-up concerns of those resources. While cloud-based solutions do include the ability to scale, dependencies on an off-site cloud provider still exist if provisioning, reconfiguration, or setup changes are required.

Cloud-native: Cloud-native services or solutions are built natively within the cloud, and are the new, modern way to architect applications. This approach provides the ability for developers to rapidly deploy new innovations and more quickly and easily scale. Cloud-native solutions are incredibly resilient and flexible. Further, the architecture prevents disruption when feature enhancements are deployed, so say goodbye to downtime. New capabilities and releases are immediately accessible to the end user.

Why is it important, and what does this mean for the mortgage industry?

If you take a step back and look at our personal lives, we all live in an age where immediate answers or instant gratification is always within reach. We can pull up Google Maps and instantly know where to go; we can pull up the Favor app and have anything delivered to our door in a matter of minutes. Why should our professional expectations be any different?

The distinction in how these cloud technologies are designed and built can not only dictate the evolution of your PPE technology, but also the level of stability and performance that can be attained across the mortgage loan lifecycle. All around us, we see that technology is evolving and providers within the mortgage space that harness and offer cloud-native solutions should be the standout choice, as they are technologically better equipped to help lenders navigate the ebbs and flows of the market and grow their business effectively – while also providing the highest return on investment.

The next time you find yourself evaluating PPE providers, may we recommend you include IT/technical and system networking teams in those discussions early on. Ask the questions, because the slight difference between these terms can have a significant impact on your day-to-day mortgage operations.

For more information on how Polly is partnering with lenders to automate holistically with cloud-native applications, visit