Outsourcing and Offshoring in Mortgage

The United States mortgage industry is going through a technological transition. Mortgage have been on the low precedence in terms of automation and outsourcing in whole banking chain. But with increasing interest rates and competition, Mortgage banks are looking for ITO and BPO as long term strategic tools. Republic Of India is fast becoming a Mortgage manufacturing hub, with its strong competitory advantage over other economic systems like China, Canada, and Republic Of The Philippines etc.

Some reports suggest that the offshore “BPO market size for the United States Mortgage is in the range of $6 - $7.4 billion. The existent mortgage processing BPO market in Republic Of India is approximately $150 million and it uses about 7500 people. It is estimated that the United States mortgage banking BPO market in Republic Of India will turn to approximately $1 billion over the adjacent 5 years.”

The range of procedures is being outsourced by mortgage lenders in three countries of the mortgage processing life cycle, from acquisition to inception to servicing. However, today the most mature market in terms of outsourcing is mortgage servicing. The loan processing is another country which can bring in upto 50% of cost nest egg if offshored to finishes like India.

Acquisition is another country with potential, particularly in countries such as as analytics and lead generation. Companies like Equinox which have got developed their competences in Mortgage by running more than than 32 different mortgage procedures from their installation out of Republic Of India have come up up as leaders in Mortgage Procedure Outsourcing. Other subdivisions of Mortgage Industry which will widen chance to outsourcing organisations will be Brokers. We see batch of activities happening in country of lead generation and stop to end loan processing.

North American banking is going through a consolidation phase, it have thrown handbasket of chances in space of BPO. Biggest challenge in any consolidation is the integrating of procedures and functions. Success of consolidation also depends upon how fast organisations integrate. This is a very resource & cost intensive procedure and banks may look for external experts to assist them though their consolidation form by taking up outsourcable processes. Thus reducing the load on internal resources, this also assists the bank to concentrate on their core competencies.

Though Offshoring and outsourcing looks to be strategic cost optimization tool, but the cost benefit depends upon how successfully the outsourcing undertaking is executed. We have got seen broad spreads between outlook and the deliverables. Recent survey states 70% of participants had important negative experiences with outsourcing projects.

One of the discriminators for future participants will be strong domain expertness and solution based offerings which also assist the client in possessing best patterns into their procedures and systems.