The Mortgage sector is a fast-evolving and dynamic sector in the broad gamut of financial services industry. Lately, a substantial input of technologies has begun transforming mortgage operations, delivery, customer experience standards, and other vital aspects; and the evolution is gathering momentum.
This situation offers vast growth opportunities for “tech-savvy” mortgage lenders despite challenges such as high costs, emergent regulations, upheavals in the housing domain, and financial crunch.
However, technology adoption alone is insufficient to harvest these opportunities while navigating the challenges. Mortgage lenders need to leverage a strategic mix of technology including automation solutions that augment their operational efficiency, productivity, and customer experience. Additionally, deep business intelligence and optimal resourcing are critical for steering the decisions and strategic efforts toward reaping the opportunities.
The right-shoring model can provide a viable solution, described later. Before that let’s overview some of the key focus areas for mortgage lenders.
Key Focus Areas for Lenders
Firstly, mortgage lenders need to make a strategic shift towards integrating their frontend and backend operations. This action is critical to synergize and align the resources to speed up closures and implement Digital Knowledge Operations (DKO).
Another imperative for lenders is to “stay in the know” and be aware of the borrowers’ demands and preferences amid the volatile market conditions and evolving regulations.
How Does Right-shoring Help Mortgage Businesses?
Right-shoring helps lenders optimize their people, processes, and technology to maximize the growth potential and address challenges with agility and flexibility. Here’s how
Right-shoring at a Glance
Right-shoring is the “next-level” offshoring model focused on driving cost-effectiveness and productivity. As a business solution, the right-shoring model aims to balance the in-house and outsourced teams, allowing lenders to choose their “preferred shore” and procure a service based on their business needs.
Right-shoring deployed via the Digital Knowledge Operations (DKO) framework delivers exhaustive “shoring” capabilities to serve critical business needs, namely –
- Scaling of talent based on business cycles – provisions the required “capacity” and “capabilities” to serve the business needs at all times
- “Follow-the-sun” delivery – allows mortgage businesses to deploy resources and deliver seamlessly across the service regions.
- Risk mitigation – availability of experienced, well-trained resources to ensure safe and compliant business operations
- Business continuity – uninterrupted and cost-effective business operations, leveraging a capable and reliable talent pool
Right-shoring for Mortgage Businesses – Key Benefits
1. Allows Faster Turnarounds
Mortgage services involve several “tightly coupled” processes that span onboarding, processing, underwriting, closing, funding, servicing, and closure stages. Executing these granular processes effectively is critical for operational efficiency while offering superior customer experiences.
A right-shored talent pool with in-depth expertise and experience can help mortgage lenders deliver best-in-class services to the borrowers with optimum efficiency, agility, cost, and scalability.
2. Brings Focus on Strategic Initiatives
Mortgage lenders need to deal with several complex tasks such as tax monitoring, MERS registration, credit risk assessment, TRID compliance review, etc. These processes need diligent execution to ensure safe and compliant operations, consuming significant time, costs, and manual resources.
The right-shoring model can help lenders free up valuable resources for strategic initiatives and achieve productivity using Robotic Process Automation (RPA), AI, and Business Process Management (BPM) solutions.
3. Access to the Latest Technologies
Digitization is critical to transforming the mortgage industry and preparing it for faster closing with superior customer experiences. However, the technology infrastructure for this digital transformation requires an upfront investment, which can be a cost barrier for lenders.
The right shoring approach offers a viable alternative by providing mortgage lenders affordable access to the latest tools and technologies, including RPA, document extraction, auto form fill-outs, etc. Also, the shoring partner can offer expertise for technology deployment and rejigging the individual processes to streamline the operations with compliance.
Finding the Right Partner is Key to Lenders’ Success
The fast-evolving mortgage landscape poses new challenges and opportunities. More than ever, operational excellence is crucial for mortgage lenders to have faster turnarounds while delivering customer delight.
This is not easy considering the vast, interconnected processes in the mortgage business, requiring ongoing manual intervention to service the loans with diligence, delight, and compliance. The high cost of doing business is another challenge, further aggravated due to broken and slow processes leading to inefficiencies and errors. In tandem, for many mortgage players, technology adoption can be a challenge due to high upfront costs and a lack of reliable counseling.
The “right-shoring” model offers a viable solution, considering how it can tackle these challenges and meet the business needs with affordability, scalability, and quality. A right-shoring partner can also act as the consultant for process design and refinements and provide affordable access to intelligent technologies such as RPA. Amid the volatile backdrop, forward-looking mortgage lenders can move past the challenges and make the best of the opportunities, provided they decide to leap towards “right-shore.”
Chief Delivery Officer
Atul is an executive leader with over 22 years of experience in strategic business planning, transformation, business development, operational excellence, and talent management in the BFSI domain. His expertise spans building business functions across geographies and domains, including Retail & Corporate Banking, Lending, and Compliance.