TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/211920
Feature BPO in the Mortgage Marketplace Faced with increasing market and regulatory demands, lenders now more than ever must strive for greater efficiencies. Business process outsourcing is now front and center for evolving mortgage companies. By Brian A. Lee A decade or so ago, the quickest way for mortgage lenders to achieve greater efficiencies was to outsource across a whole ocean. The trend then was toward utilizing relatively new offshore arbitrage for scale and cost optimization. These days, the unprecedented capacity demand for home retention, loss mitigation, refinance fulfillment, and other services has brought about an "on-shoring" trend with regard to business process outsourcing (BPO) in the mortgage arena. "Increasingly, we see greater demand for flexible capacity, whereby lenders can keep operational costs steady and rely on qualified service providers to handle overflow," said Henry Santos, managing director of Accenture Credit Services. "That allows lenders to increase or decrease capacity based on changes in interest rates, housing supply, and other factors." Whether component processes—like loan package review, loan processing, expert underwriting, quality control, closing, post-closing, servicing data entry or loan servicing—or a more end-to-end mortgage service need, lenders' goals are clear: bigger, better, faster, and cheaper. Predominantly, mortgage companies are isolating component transactions and delegating them to lower-cost, higher-productivity global delivery centers. "Today, the discussion is less about onshore or offshore and more about 'right-sizing' and 'right-shoring,'" Santos said. "Sophisticated users focus on BPO as a format for collaboration and creativity, optimization of best practices, cost reduction, and an incubator for process innovation. They are expanding the use of BPO to create competitive advantages in quality, cost, service, and delivery. The guiding principle is that savings achieved from increased efficiency can be redirected toward innovation, particularly innovation affecting customer experience." BPO has evolved significantly over the years, going from a labor levee of sorts (i.e., a way to manage overflows) to a cost-saving strategy through the aforementioned arbitrage available by off-shoring certain operations to developing economies. "Quick scalability of operations based on resource availability and faster turnaround time based on around-the-clock operations were the other reasons for which the BPO concept become popular in the marketplace," said Ramachandran Ariyur, SVP-Head of Sales & Marketing at SLK Global. Now, large mortgage industry players leverage BPO for much more than cost savings, scalability, and resource availability. BPO innovations allow lenders increased control over their operations, better focus on process improvement across all company channels, and more effective management of fixed costs. Also, mortgage lenders, including more and more mid-market companies, benefit from the variable pricing models that are transaction-based so that business risks are minimized. BPO providers like Xerox Financial Services offer large-scale imaging and portfolio remediation, transaction processing (origination and servicing), systems operation, and default mitigation. Personal service offerings come out of global, multichannel call centers. Massive mortgage document processing and delivery require massively macro-oriented technologies that perform automated review and remediation of files, eliminating misfiled documents, validating document types, and extracting additional metadata from the document collection. "Robust analytics engines assist with large-scale mortgage document management and workflow, rapidly assessing knowledge of loans and borrowers," said Bill Haralampoudis, VP of financial sales at Xerox. "The service also reduces errors and personal financial information breach implications. We utilize a transformative workflow analysis process to streamline operations and report back to the business." The M Report | 21