Indian IT and business process outsourcing companies are expected to double their revenues from mortgage process outsourcing to $316 million this year from $158 million in 2009, according to a report by HfS Research.
But this number seems low to Judy Wheatley, senior vice president of compliance for Indecomm Global Services, a consulting and outsourcing company. The bottom line is that outsourcing isn’t just expanding in India, she said, but also in Mexico and throughout Asia.
To control costs, many banks and financial institutions in the country are outsourcing a range of mortgage processing services including underwriting, loan verification, documentation for claims and counter claims and other foreclosure services.
“The mortgage industry is cyclical with ups and downs, so what outsourcing allows companies to do is to staff internally at a certain level, and utilize outsourced resources to flex up their volume and meet consumer demand faster,” Wheatley said.
The trend to move mortgage BPO offshore is largely driven by banks’ need to reduce costs, and the labor cost in India is, depending on skill level, approximately 50% less than in the U.S., Wheatley said. But that’s not all a business has to gain, as Wheatley said there is impressive talent in India.
“The skillsets for those working in India in support of the mortgage industry have matured and developed in the past few years,” she said, noting that BPO companies often poach talent from each other.
Another benefit is the advantage of a 24/7 workforce, as many BPO companies hire for two or three different shifts to cover the whole day.
What has been successful for Indecomm is a blended approach, Wheatley said. A client may choose to outsource 100% of a function, but Indecomm will separate that function into parts performed in the U.S. and those performed in India. Oftentimes communication with customers is kept in the U.S., while clerical functions are outsourced to their offices in Singapore, Malaysia and India.
“We have found that we can be most successful with back office functions, which allows our clients to focus on their customers,” Wheatley said.
As far as mortgage companies interested in seeking out an outsource company, Wheatley recommends they do their due diligence in researching stability, financials and IT security requirements. Looking for a long-term partnership, rather than a quick fix to solve an increase in volume, is also key, she said.
“A good outsourcing company can bring new ideas to make the process more efficient.”