MANY brokers rarely find the time to consider their processes, but with the current challenging market now is a good time to take a step back and review your processes.
This is mostly down to the transitional, fast-moving and sometimes temporary nature of the business. As such, it can often be difficult to plan for the medium to long term in a frequently changing environment. The usual response to this is to up the running costs, but are problems being resolved by simply throwing resource at them?
For example, paperwork is often regarded as a necessary evil, and an integral part of the process that will always be required due to regulation such as the consumer credit act. There is no one tool that can take away all the pain of paperwork, but could the amount be reduced through technologies such as business process management tools and electronic document management (EDM)?
What benefits would that bring for brokers if some processes took place automatically and reliably, away from the normal working day and required only supervisory attention? It could free them up to sell, and provide more time to manage processes and documents, delivering a competitive advantage that is absolutely crucial when everybody is chasing the same, diminishing business.
Many brokers will read this and think to themselves that the last thing they need at the moment is a period of major office upheaval but that needn’t be the case. Process efficiency can be as small or as large as a brokerage needs it to be. It can be scaled so that costs and disruption to day-to-day work can be borne in mind.
When reviewing processes a business would need to start with some cost benefit analysis because process efficiencies and cost savings go hand in hand.
A good small-scale example would be postage and telephone costs. For example, when a customer applies for a loan, a broker may consider distributing documents by e-mail rather than post, or contact customers and third parties by SMS text message rather than telephone call. The adoption of electronic signatures could be considered an external factor that may drive brokerages to adapt their processes in this way. In addition, it would speed up the application process if applications were submitted online.
There are a number of similar processes that could be evaluated in order to make savings on both time and money. However, some brokers may see this as tinkering around the edges and would be looking to make more widespread changes that will give them more of a competitive edge and reduce their costs.
Increasingly, automated valuation models (AVMs), are being taken up by brokers who are seeing how it can save them money at the front end. Already in widespread use among lenders, this offers a degree of seamless interactivity with third parties, and has also been proved to bring benefits from reduced costs and timescales. As well as detecting fraudulent applications and identifying accurate loan to value, it will allow brokers to make application decisions as soon as possible, offering competitive advantage through point-of-sale (POS) offers.
These benefits are offered through a much faster application process. If an AVM is integrated into a broker’s IT system, it will allow the verification of customer valuations literally in seconds. That information is then automatically included in application data, and may well lead to a POS offer.
After the loans have been written, there are other areas of the business that could be considered. One of those could involve EDM. A computer system designed to store, track and retrieve electronic documents, many brokers are finding this kind of formalised system easier and more reliable than paper-based systems.
EDM provides a working system by employing data capture (electronically scanning paper documents) document retrieval (using metadata that includes date of storage and identity of storer, plus the attachment of additional data where necessary), integration (standardised access between EDM and other applications, such as Word and email), workflow (the automatic routing of documents to the appropriate person) and version control (the tracking and managing of multiple versions of the same information). By using EDM, many of the problems associated with a paper environment can be eradicated, leading to single versions of documents, reduced risk of loss, and reduced time spent finding and retrieving documents.
Efficiency among brokers could also be improved by a greater dissemination of arrears statistics from lenders. This would assist both parties, as lenders will be able to check their pipelines to ensure the quality of the introducer and manage brokers more effectively. Conversely, if the process were automated, those reports could be passed back to brokers so that they can monitor their own effectiveness.
Many financial businesses have in recent months sadly had to undergo staff reductions due to the impacts of the credit crunch. The economic climate is encouraging more and more brokers to seek out greater efficiencies, so now is the time to start improving processes and gaining the competitive edge.