MORTGAGE BANKING AND BPO call centers
Across the country, mortgage lenders have been seeing a reduction in profits due to a decrease in production volume and an overall reduction in origination fees. One question always remains, how to increase profit? The answer may be found in three simple letters, BPO, Offshore business process outsourcing is a tried and true strategy of lowering cost and increasing profit. This is nothing new, mortgage bankers have always focused on servicing profits as the antidote. The logic is simple, since servicing revenue is static, the solution is to reduce servicing expenses.
Technology was the theme during the last origination lull. The goal was to boost profit by installing technology that could lead to a reduction in staff. Now we see that moving human processes offshore can be far more effective than replacing humans with machines. The human element simply can not be taken out of mortgage banking. When automation first reared its head, the public had many concerns and misconceptions. Business process outsourcing is met with similar apprehension and deserves some clarification.
A common concern is that the practice is simply "un-American." There is a simple answer to this. Bankruptcy is not a part the American dream. If outsourcing secures a companies place in the American market place, it is very American. What is un-American about increasing profit and passing those gains down to share holders? Further, if a product costs less to produce, it will cost less for the American consumer to purchase. Cheap mortgage leads can be generated with higher quality like this. The truth is, all of the big dogs in the mortgage industry have been engaging in this practice for years. The idea that business process outsourcing is treason is simply ignorant and rooted in an ill-informed xenophobic ideology. If offering competitive rates and a solid return to investors is unpatriotic, just call me Benedict Arnold.
Mortgage Lead Generation
Another concern is that agents in foreign call centers are not equipped to deal with Americans, who we all know speak perfect and pure English. This notion is not total hog-wash. We have all experienced frustration while trying to trouble-shoot a complex networking issue with an agent who has a foreign accent. The root of the problem is often the nature of the call and not the linguistic ability of the customer service representative. Diffusing a nuclear bomb should not be dealt with in this manner weather the agent is from Lima, Nebraska or Lima, Peru. Customer service is intrinsically difficult in any language. That being said, there are a number of back-office processes that can be moved offshore that will not affect the consumer in the least.
Many foreign countries are notoriously unstable. One must wonder if the quality of service will be affected by the outbreak of civil war. While the people and food are superb, you might think twice about setting up a process in the Anbar province. The Lead Tree, LLC as well as other American firms have been doing business in India and The Philippines for a number of years. We are confident that the infrastructure is stable when it comes to power and telecom. In fact, companies as large Dell have even made the shift to the Philippines.
Even the need for extensive travel has been drastically reduced over the last few years. Weekly check-ups on foreign facilities are a thing of the past. As long as the company you are dealing with is competent and their infrastructure is up to date, most business can be dealt with remotely.
That being said, the advantages to BPO call centers are virtually endless. You can expect 20-40 percent savings on overall operating cost. Savings in capital output for direct staffing can easily be realized. There is no payout for benefits, taxes, square footage, telecom or IT. Further, Indian and Pilipino workers are well educated, notoriously dedicated, highly motivated and extremely ethical. Further, the differential time zones will allow you to work 24 hours a day and in many cased seven days a week.
Hands down, BPO call centers trumps technology when it comes to reducing operating costs in the mortgage business. Cheap mortgage leads can be produced for a fraction of the cost. Machines that reduced staff by over a quarter in the 1990’s simply can’t hack it in the new millennia. The downturn in the market can be easily offset by globalization and opportunities offered by offshore processing.
